Three Proactive Ways to Compliant Background Screening

By Michael Jaskulsky

In a game where the rules are constantly changing and there is no way to officially declare victory, the processes of developing, executing and maintaining an employee background screening process can seem daunting. Still, a well-run background screening program promises a lot of upside, including organizational protection, reduced turnover, strengthened compliance and decreased legal risk. Here are three basic strategies for kick-starting a screening program that does the job.

1. Keep disclosures and authorizations separate

Last October, a major supermarket chain agreed to pay $6.8 million to settle a punitive class-action case alleging it failed to properly disclose that it would perform background checks on more than 90,000 applicants. Specifically, the plaintiffs alleged that including a liability waiver in the company’s disclosure form violated the Fair Credit Reporting Act because the form included a number of disclosures and was not “solely” a disclosure that a consumer report may be obtained for employment purposes.

Quite simply, the problem could have been avoided if the background check notice was on a separate page and the company had received written consent by the applicants. Companies should provide a clear and conspicuous disclosure in writing in a document that consists solely to inform that a consumer report may be obtained for employment purposes.

2. Do your work, show your work

When a background check turns up something from a candidate’s past, the Equal Employment Opportunity Commission urges companies to conduct an individualized assessment of the situation. Consider the circumstances surrounding the offense or conduct, the number of offenses and how much time has passed since the conviction or completion of a sentence. Evaluate any rehabilitation efforts that may have occurred following a conviction, including more education or training. And of course, the assessment should include a review of the specific duties, essential functions and environment of the position, and whether this individual’s history should remove them from consideration for hire. The EEOC also suggests that hiring managers speak with employment or character references as part of a thorough evaluation.

When an adverse action is taken as a result of a candidate’s background information, the FCRA has additional requirements. Prior to any action being taken, companies must provide the candidate with a copy of the background check and a written copy of the candidate’s rights. This gives the candidate opportunity to review the report and provide their own explanation. Following an adverse action, the hiring manager must then tell the applicant, in writing or verbally, that he or she was rejected because of information of the report. They should also share details on where the report came from and that he or she has a right to dispute it.

3. Ban the box

In 2012, the EEOC issued guidance suggesting that the practice of asking about prior criminal convictions on an employment application has a disparate impact on minorities such as Hispanic and African-American individuals, and creates a barrier to employment for these individuals. Since that time a growing number of states have opted to “ban the box” on job applications that ask questions about prior convictions. Instead, the question about previous convictions comes during the interview phase of the hiring process. Fourteen states currently have some form of “ban the box” law in place, along with nearly 100 cities. Supporters claim that these policies help people with criminal records reintegrate into society. Of course, it is still possible to reject candidates with criminal records, as these rules are meant only to give the candidate an opportunity to get a foot in the door.

For financial institutions, especially those with locations across multiple states where “ban the box” laws may not uniformly apply, it is wise to adopt a standardized application, one that does not include a question about criminal convictions, across all locations. Doing so eliminates subjectivity and promotes a more consistent and compliant hiring process. Avoid using “bright line” rules that automatically exclude certain demographics, such as a declarative statement that says felons will not be hired for any positions.

Interpretation and implementation

According to research by First Advantage, the vast majority of companies (75 percent of those polled) do not reject candidates when a “hit” occurs during the background check. A previous conviction should not be automatic cause for disqualification, and most companies seem to embrace this notion. Ultimately, companies should determine their risk tolerance based on a few critical factors, such as the position’s interaction with the public or at-risk populations, the positions access to sensitive information and the unique circumstances surrounding any offense.

There is no shortage of reasons for implementing a proactive criminal background screening program—and there is no shortage of costly and highly public examples of ineffective and poorly constructed ones. With the stakes as high as they are, it pays to ensure that the right, proactive measures are taken to keep your organization safe.

Michael Jaskulsky is the fingerprinting product manager at First Advantage, which is endorsed by the Corporation for American Banking, an ABA subsidiary, for employment background checks and fingerprinting services.