SmartRecruiters Blog

Fair and Legal: A Recruiters Guide to Background Checks

Best practice for avoiding the wrong side of the law when it comes to vetting your candidates.

*Needless to say – but I’ll say it anyway  –the following is NOT legal advice. Let ’s call it: introductory information for the purpose of mulling. This article deals with the US, and it should be noted that laws vary state to state.*

When you hear the term ‘Background check’ the first association that springs to mind is an inquiry regarding criminal history. However, there are actually a multitude of screenings that this umbrella term denotes, including – educational transcripts, driving record, military service record, credit report, licensing checks, workers compensation claims, and more. For the sake of this article, reference checks and employment verifications are a different category than background checks.

A background check, including one or more of the above screenings, is often critical to assessing candidates fit and competency for a role. To conduct these checks, it’s important to follow certain protocols to ensure a fair and legal process for employers and candidates. The laws surrounding background checks are, in general, a codification of best practice, and not tedious hoops through which to jump. Most of the advice here will strike a common sense chord, but never hesitate to talk to legal counsel, and note that initiating a background check program should be done under the guidance of a lawyer.

Let’s explore the different types of background checks…

Educational – Academic transcripts and financial loan information are generally confidential and you will need consent from the applicant in order to access these documents, it’s possible to request the candidate to provide this information to save time and energy.

Criminal – To investigate criminal history legally, written consent from the candidate is required. Sealed or expunged items may not appear on the applicant’s record and only in some states can an employer request this information.

Credit –To access a candidate’s credit report, an employer must first obtain written consent. If said credit report is the basis for disqualifying that candidate from consideration for the role, the employer must provide a copy of the report to the candidate and give them the opportunity to contest the findings.

Driving – Driving records require written consent of the applicant, and should be viewed for positions that require operating a motor vehicle.

Military – Basic military service records like name/rank/assignments are available without the consent of the applicant, but not always. For complete records, an employer must have written consent from the candidate.

Investigative consumer report – This is a detailed background check that usually includes interviews with colleagues, former supervisors, friends, and family regarding the applicant’s character. Such a report may not be compiled by the employer without the applicant’s written consent.

Licensing – Confirm the candidate’s accreditation for tasks like food handling, serving alcohol, commercial driving, or operating a forklift through obtaining written consent from the candidate. It is often easier to ask the candidate to present a copy of their license in the application. 

( Reference Checks/employment verification: Reference checking and employment validation are used to verify the information that the candidate provided on their resume. While written consent from the candidate is not generally a legal requirement, it is considered best practice to notify them prior. In order to avoid unfair or discriminatory hiring practices stick to questions that have to do with the candidate’s ability to perform the role well. Avoid delving into character and personality questions as then the reference check /employment verification verges on an investigative consumer report. Reference checking and employment verification work best when you have a structured system, like a set list of questions that are the same for all candidates.)

Here are some notes for best practice and legal behavior for conducting a background check…

Run a background check if permitted. 

Background check protects the employer from being liable for an unfit employee’s job conduct. Background checks become especially relevant if the position requires handling sensitive financial data or personal information.

Know which roles allow background checks and which require them.

Background checks become especially relevant if the position requires handling sensitive financial data or personal information. There are many “positions of trust” for which a company would require a background check. In some states, an employer can only request background checks for certain types of employment, so be sure to check with your regional laws.

Understand what type/s of background check is/are pertinent.

Use your best judgment about which type of background check is relevant to the job at hand. Is a criminal history pertinent, or do you just need employment verification or transcripts? The answer will vary by role, never hesitate to seek legal counsel for guidance.

Be sure the background check policy is consistent.

Consistency means that the employer runs a background check based on the role, not on the candidate. For example, if HR performs a background/credit check for one CFO application, it should then perform one for all the CFO applicants to ensure a fair evaluation of the candidate pool.

Obtain written permission from an applicant before performing a background check.

Notify the applicant before performing a background or credit check. If the request has a reasonable basis and the candidate refuses it’s usually permitted for you to drop them from consideration at that point. Remember, in most states, notifying applicants and receiving written permission isn’t a courtesy, it’s a legal requirement. So check your regional laws, and don’t pass over this step!

Give the candidate an opportunity to explain the results.

The information surfaced in background checks can often be outdated or wrong. If a candidate is dropped from consideration due to the findings obtained in their background check, notify them and give them an opportunity to contest or explain.

Find third-party background check providers in the SmartRecruiters’ marketplace!

Author’s note on criminal history discrimination…

Performing a reasonable set of background checks is always a good idea on the part of the employer. These screenings should always correlate to the job function and should steer clear of discrimination. On one blog I came across in researching this article – that shall remain anonymous – the author suggested that an employer could screen for criminal history based on the candidate’s address… this suggestion is at the least discriminatory, and – in most cases – illegal. As stated above, make sure to screen according to the role, not according to the candidate.

Another issue that often arises in background checks is whether or not to hire a candidate with a criminal history. Many businesses will say ‘no hires with a criminal history whatsoever”, however, increasingly, this hardline stance is viewed as a bit antiquated and many companies today will take into consideration the nature of the offense, how long ago this offense occurred, and if those things affect the performance of the role for which the candidate is being considered.

Safety is often a concern for employers considering candidates with a criminal history, and this may be where the nature of the crime and the time since committing the crime are considered to provide context for the hiring committee. Seventy-million people in the US alone have criminal histories – that’s one in three adults –  and about 75 percent are still unemployed a year after their release. Excluding people with criminal records from the economy seems to detrimental to their re-entry into society, and of those who re-offend 89 percent are unemployed at the time of their arrest.

At the end of the day, whether or not to hire a candidate with a criminal record is up to the company and may vary by case. For more information on hiring someone with a criminal record, please explore “Once Incarcerated, This CEO Now Helps Americans with Criminal Records Find Work” and “Unlocking America’s Incarcerated Workforce”.

Kaya Payseno