background checks

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Q: Are there certain rules an employer must follow when conducting background checks on employees and prospective employees?

A: The Fair Credit Reporting Act (“FCRA”) is an often overlooked federal law that imposes stringent technical requirements on employers wishing to procure a “consumer report” from a third party “consumer reporting agency” for hiring or other employment purposes. Individual FCRA lawsuits and class actions are on the rise and failure to comply with the FCRA can result in harsh financial penalties.  This blog post provides a brief overview of the FCRA.
Continue Reading Employers Must Comply with Detailed Requirements When Having a Third Party Perform Background Checks

Q: What does it mean to “ban-the-box,” and how does it affect our hiring process?

 A: Ban-the-box legislation is quickly spreading throughout state and local jurisdictions.  Even if your jurisdiction has not adopted such legislation yet, it is likely that it will do so in the not-so-distant future. Therefore, it is vital to understand both the rationale behind the legislation and how it will affect your organization’s hiring processes.
Continue Reading Background Checks in the Era of Ban the Box

Over a year ago, our colleagues at the Information Intersection blog warned that employers should think twice before using websites such as Spokeo.com, which are aggregators of personal information collected from online sources, including social media.  They warned that:

…the information available through some of these sites might be incomplete, inaccurate or dated…The reality is that most online information brokers, in their current versions, are not designed to be used for employment screening purposes.  They typically do not meet or even purport to meet the strict rules that apply to pre-employment screening databases.
Continue Reading Is An Online Search A Background Check For FCRA?

The California legislature recently passed a bill prohibiting employers – with some specific exceptions – from obtaining and using credit reports to screen candidates and employees. Check out this report at Law360. California becomes not the first, but the sixth state to have passed similar legislation, joining Hawaii, Washington, Oregon, Illinois and Maryland. Even more states are considering similar restrictions, and there’s even a proposal before Congress that would do the same thing on a national level. What else? Oh, the EEOC takes the position that the use of credit reports may be biased against minorities and females. Here’s the EEOC’s official take. So, not only may using these reports be unlawful in many states, but you could also face charges of discrimination over the use of credit reports. Finally, don’t forget that the bankruptcy code, which applies nationwide, prohibits an employer from discriminating against an employee on the basis of bankruptcy – basically, you can’t fire someone solely because of a bankruptcy, whether your business is a financial institution or not.
Continue Reading Coming Soon . . . A Ban On Using Credit Reports in Employment