How To Get Your Background Check Right…the First Time

Document created by 1002074 on Dec 18, 2014
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Making critical hiring decisions for your company is a huge responsibility. Not only is it critical to the success of the company, but also the safety of your employees.

Getting it right isn’t easy.

Last year, approximately 90% of businesses in the US did some sort of background check on prospective employees to help protect their companies against the significant liabilities of negligent hiring lawsuits.

Unfortunately, the number of businesses out of compliance with the latest background checking standards grows every year and regrettably, most hiring professionals do not realize it until they are named in ever more frequent class action lawsuits.

Chances are that you are ordering background checks, but are you compliant?

Background checks compiled by third parties, such as CAI’s detective agency*, are covered by the federal Fair Credit Reporting Act (FCRA).  The FCRA covers more than financial records; it also includes reports that research criminal records, employment records, education information, driving records and even something as simple as an address history.  The FCRA was broadened in scope in 1997, and is designed to provide a safeguard for the applicant who has an adverse action taken against them based upon the results reported in the background investigation.  That is, if the applicant is denied an employment opportunity in whole or part by information contained in a background check, he or she has the right to view the information and dispute the record.

 

How do you comply?

  1. Have a permissible purpose (employment).
  2. Obtain written consent from the applicant.
  3. Run the check through a reputable third party Consumer Reporting Agency (CRA), like CAI.
  4. Look at the results and decide if the applicant fits the needs of your company:  
    1. If the record is clean, keep the authorization form in a secure place.

    2. If the applicant is not hired due to something uncovered in the background check, then you should do the following:

      1. Mail a copy of the report, and
      2. a summary of the applicant’s rights under the FCRA, and
      3. a pre-adverse action letter [that includes the third party’s (CRA’s) name and contact info to the applicant].
      4. If your company is in NC, you also want to send a copy of the NC Security Freeze to the applicant.
      5. After a reasonable amount of time (around five business days) you want to mail the declination letter to your applicant. During this time you should hold the position to give the applicant a chance to respond.
      6. After the “reasonable time” you may hire the appropriate applicant, thus filling the position.
      7. Store the rejected applicant’s signed written consent for six years.  SHRM recommends that you store the negative report for two years.

 

Hiring can be very stressful and CAI knows that it is better to get it right the first time. If you have any questions about becoming compliant with the FCRA or have general question regarding CAI’s background checking services please contact Kevin von der Lippe at 336-899-1150 or kevin.vonderlippe@capital.org.

 

*Capital Associated Industries Services Corporation is a licensed investigative agency, specializing in corporate pre-employment background screening. Our corporate agency license is BPN 001473P11.

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