What Employers Can See in a Background Check
Just a few decades ago, employee background checks were reserved for only the highest clearance and most safety-centric job positions. However, the proliferation of web-based screening services and the relative ease and cost-efficiency they have afforded has led to near-universal implementation of pre-employment background checks. In fact, according to a recent study by HR.com and the National Association of Professional Background Screeners, an incredible 96% of employers now put prospective hires through at least one type of background screening before making a job offer1.
While the spread of this practice has led to safer workplaces, it has also led to more than a few employers hiring ineffective third-party background check contractors who overstep their bounds when it comes to what kind of information they are legally allowed to consider. This is why, as an employee, it is vital to be aware of the legal standards when it comes to undergoing a pre-employment background screening.
The reality is that most job candidates don’t know what employers can see in a background check. It is important to know your rights under the Fair Credit Reporting Act (FCRA).2 If you’re turned down for a job based on information in your background check and you know you are clean, a number of scenarios could be at play. For example, it could be that the employer received criminal history for another person with a similar name. It could also be that the employer reviewed facts beyond those that are legally allowed to review. It could be that old or expunged records were still showing up in the databases that they searched, but their third party background check agency did not scrub the report to protect them from seeing this information to ensure that they didn’t erroneously take it into account.
It’s not just small companies that have difficulties traversing this complex arena. The news has recently been awash with stories of major corporations such as Amazon, Home Depot, Whole Foods and more having to pay out major settlements for lawsuits resulting from negligent background screening.
Job-seeker’s Rights During Background Screening
Providing Proper Consent for a Background Screening
According to FCRA, job candidates must provide their written consent (their signature on a waiver) for reports to be released to employers2. Plus, a background check agency only has the right to provide information to companies with a valid need, for example, in conjunction with a job application. And, of course, it’s illegal to run a background check to determine someone’s race, national origin, sex, religion, or other protected category.
As an applicant, you should be asked to sign a consent form to allow the company to perform a background check. Employers put themselves at legal risk by not disclosing that they will run a background check on an employee or independent contractor or doing so without your permission.
Obtaining a copy of the report
Under FCRA, employers are required to provide a copy of the background check report to the candidate upon request. The applicant can check the report for inaccuracies. If the report is correct but is flagged by the employer, applicants have the right to understand what information was used to justify denying them the job. Or, they can take the opportunity to explain their employment history gaps, convictions or criminal offenses.
What Employers Can Legally Screen For
Typical background checks involve verifying information provided on the candidate’s application, including employment and education history, certifications, professional licensing and references, as well as checking criminal history through various databases and court record repositories.
What Employers Cannot Consider
Information outside the legal purview of background checks includes medical records, disabilities, and genetic information. Social media may be looked at, but if information is seen that is protected, and an adverse determination is reached, the employer may have to substantiate that they did not utilize protected information to reach that non-hire determination. Credit checks are allowed in some states and off-limits in others; eleven states have passed laws that ban the use of credit checks for pre-employment screenings3.
Arrest records are always out of bounds, since we are all innocent until proven guilty, which means only convictions are fair game. Juvenile records and sealed records are also inappropriate to consider. Yet just because there are laws about what companies can use to evaluate your background, it doesn’t mean that the prohibited data isn’t available – in fact, it is easily obtainable. The companies just aren’t supposed to consider anything that is defined by law as inappropriate.
State-Specific Background Check Laws
As more states are working to pass fair hiring legislation which adds to the federal requirements, the complexity for companies to remain in compliance nationally is growing. Many states have “ban the box” rules which prohibit employers from even asking about past criminal convictions. In California, employers can’t look at marijuana misdemeanors that are more than 2 years old<sup>4</sup>.
The Cost of Bad Background Checks
Getting turned down for a job because of a botched background screening is costly on all sides. As an applicant, of course, you lost the job that was already in the bag. For the employers, they can and do get sued. In the past decade alone, employers and ineffective background check companies have paid $326 million in settlements.
If you’re an applicant and you’ve been turned down for a job due to a background check, the first thing to do is ask for the report and read it. If there is anything inaccurate, or if there is anything in there that the employer should not have been able to use to make an adverse determination, speak up quickly. In most places, you have a week to contest it.
If you’re an employer, it’s not that hard to comply with the law. First, learn why background screening can lead to lawsuits. And second, don’t just purchase a background check based solely on price. Remember the old adage: “you get what you pay for.” Work with a trusted credit reporting agency and be sure they are protecting both you and your applicants.