Hiring Practices: Compliance is Key

Pre-employment background checks are considered just as normal to the hiring process as filling out the initial application. In today’s workplace every potential candidate is put through a screening process, it’s just what we do. However, due to the number of growing class-action lawsuits, the ever-present threat of data breaches and focused regulatory oversight, employers and HR professionals need to keep compliance at the top of their list for 2016.

Regulators will focus a concerted effort on false matches. There are what we call “false positives” and “false negatives”.  A false positive is a misreported criminal record based on a database search or a name match where there is not sufficient evidence that the record is associated with the subject of the background check, or where a record has been expunged and should not have been reported. On the other hand, false negatives are missed criminal records that should have been reported. All firms screening applicants are obligated to utilize “reasonable procedures to obtain maximum possible accuracy” under the Fair Credit Reporting Act (FCRA). Accuracy is critical, both for the job applicant and the employer who relies on the information. Just in the last year, two of the nation’s largest employment background check firms have paid out a total of $13 million for failing to take the proper steps to ensure the accuracy of the information they reported regarding job applicants.

The Fair Credit Reporting Act has been used extensively for class-action lawsuits. Litigation involving technical violations – claims involving one or two words on a disclosure form – have been rising steadily. HR professionals and employers need to be aware of the disclosure and authorization form required by the FCRA. It informs the applicant that, as part of the hiring process, the employer may perform a background check for employment purposes. The employer must have the applicant’s written authorization or consent to do so. The main thing to remember is that this statute requires this disclosure in a completely stand-alone document, without extraneous information. In addition to the consent form, employers are obligated to to provide notice of intent to take adverse action form, a copy of the Summary of Your Rights under the FCRA and a copy of the background check to those applicants that are turned away due to the information found in the screen. If the final decision is not to hire the candidate, employers must also supply the candidate with a final notice of adverse action letter.

Les Rosen, an attorney and CEO of Employment Screening Resources, says that “lawsuits can include highly technical claims, even where there is no indication that anyone has actually been harmed, which means that legal compliance has become one of the most critical parts of background check services”.

Important information regarding criminal history, usually included on job applications, will be banned by more than 100 US cities and counties and 19 states as of January 2016. It’s called ban-the-box laws and there is currently legislation at the city, county and state levels. As more and more legislation is passed it makes it difficult for employers to keep up with the state and city ordinances.

Many employers currently use social media as an element of their recruiting. Some are shifting to using this online information as part of their screening process. However, there are clear risks to this approach when you consider the concerns surrounding privacy and data accuracy of social media profiles. There are several existing federal laws that protect workers against discrimination and privacy violations related to social media.

It is clearly evident that employers and HR professionals will have to remember that compliance for pre-employment screening should be a top priority in 2016 and going forward. As the compliance laws are constantly changing and becoming more and more complicated, companies may find that outsourcing this type of pre-employment check may be the wise choice.

 

Some excerpts from SHRM