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Conducting background checks – the ins and outs

Here is what you need to realize when directing background checks as a component of your hiring process. The practice is standard in the banking and financial service industries, just as for the individuals who work with kids, the elderly, or individuals with disabilities. In the event that you are not currently running background checks and need to know where to begin or if you need to survey best practices, look at our outline of the cycle beneath. 

Identify the business reason behind conducting pre-employment background checks

Personal investigations add time and cost to the employment process. They can create risks, so in case you’re contemplating about directing them company-wide or for specific positions, you ought to have a business purpose behind doing so. To put it plainly, you should know why you need to direct them. 

As a rule, the goal is to protect the company and the individuals inside it. A business probably wouldn’t prefer a person indicted for theft or fraud handling large sums of money. A candidate with a history of abusing others probably should not be in the profession of supervising children

On the off chance that there’s no specific requirement for historical verifications, nonetheless, it very well might be ideal to renounce doing them. If you’re required or have valid justification to do them, at that point you can move to the following stage. 

Educate yourself on government and state laws relating to background checks 

Under the Fair Credit Reporting Act (FCRA), employment background checks are a type of consumer report and may incorporate credit history and criminal records. Prior to getting a customer report, you should tell the candidate or worker that you use data in their consumer report for decisions related to their employment, get written permission from the applicant or employee, and certify compliance with FCRA requirements to the company running the check.

The Equal Employment Opportunity Commission (EEOC), which enforces anti-discrimination laws, has guidance to acquire and utilize criminal records. That guidance says that employers should only inquire about felony convictions, inform the applicant that a criminal record does not automatically bar employment, and ensure a legitimate business reason for requesting this information. You can learn more about these EEOC guidelines here. 

Also, states have their own laws pertaining to background checks. 

Make the employment offer dependent upon passing the background check 

Whenever you’ve chosen a finalist for a position, you can give a work offer that is contingent upon passing a background check. Basically, you’re telling the potential employee that they’ll land the position if the background check doesn’t reveal anything that would make you revoke the proposition for employment. Making the job offer conditional protects your organization, and it tells the finalist what to expect so they’re not caught off guard.

Obtain consent from the candidate  

If the information you will be obtaining is considered a consumer report, be sure to get written permission from the applicant or employee before conducting the background check. However, suppose you’re merely running an investigative report based on personal interviews regarding the applicant’s character, general reputation, or personal characteristics. In that case, you should inform them in writing that you requested this report within three days of doing so.

Decide whether the outcome would preclude employment 

Before inspecting the report, you ought to have figured out what sorts of results would preclude employment. With these standards in mind, you can evaluate the report to conclude whether you should proceed with the hire or rescind the job offer.

The EEOC cautions employers not to discriminate when using background information. Employers, it says, should: 

  • Apply the same standards to everyone, regardless of their race, national origin, color, sex, religion, disability, genetic information (including family medical history), or age (40 or older);
  • Take special care when basing employment decisions on background problems that may be more common among people of a certain race, color, national origin, sex, or religion; among people who have a disability; or among people age 40 or older;
  • Be prepared to make exceptions for problems revealed during a background check that was caused by a disability.

Continue with the hire or revoke the job offer 

There are very specific notification steps required under the federal Fair Credit Reporting Act (FCRA) should you elect to rescind a job offer after receiving the background check results.

Before taking an adverse action based on information in a consumer report, you must provide the applicant with a notice that includes a copy of the consumer report you relied on to make your decision as well as a copy of A Summary of Your Rights Under the Fair Credit Reporting Act, which the company that gave you the report should have provided to you. There are online background check services you can use to offer a wide range of options based on your organization’s needs.

The next steps include the following:

  • Inform the applicant of the adverse action either orally or in writing.
  • Provide them with the name, address, and phone number of the consumer reporting company that supplied the report.
  • Provide a statement that the company that supplied the report did not make the decision to take the unfavorable action and cannot give specific reasons for it.
  • Inform the applicant of their right to dispute any inaccurate or incomplete information and get an additional free report from the company if the applicant asks for it within 60 days.

Save the report 

Businesses must preserve background check records for one year after the records were made or after a personnel action was taken, whichever comes later. If an applicant or employee were to file a charge of discrimination, you would have to maintain the records until the case is concluded.

After that time, you should securely dispose of the report and any information gathered from it. Securely disposing of the information means that it cannot be read or reconstructed. We recommend shredding these items.

Assist your workers with having an extraordinary onboarding experience beyond the background check

In the wake of investing a great deal of time and energy into enlisting and recruiting new employees, don’t blow it now! Get them going faster and keep them longer — and boost HR team efficiency — with a streamlined program that starts with this checklist.

About Alliance

For over 30 years, Alliance has worked with the unique needs of our clients to ensure we provide the highest quality solution and service.

Inspired by the American dream of business ownership (and also the need to eat!), Randy and Terri Norwood set up a dot-matrix printer on a folding table in their Houston living room and declared Alliance Payroll Services open for business in September, 1989. Trying to never lose sight of the fact that business should always be fun, Randy incessantly knocked on doors of businesses while Terri keyed, processed and delivered whatever payrolls Randy sold. Fast forward over three decades and, thanks to our hard working team of “Warriors,” Alliance has grown into one of the largest privately-held human capital management (HCM) software providers in the nation.

But many things have not changed. We still try to under-promise and over-deliver our products and services, not the other way around. We keep our pricing transparent and simple. We refer to our clients around the nation as our partners and friends. And we still think business should be fun!

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