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Conducting Legal Background Checks on Employees

    Hiring the right employees is a critical aspect of any successful business. Legal background checks are a fundamental part of this process, ensuring that you make informed decisions while complying with relevant laws. In this guide, we’ll explore the steps and considerations employers need to take into account when conducting legal background checks on potential hires.

    1. Understanding the Legal Framework

    Before initiating a background check, it’s essential to comprehend the legal framework governing such checks. Familiarize yourself with federal and state laws, as well as regulations like the Fair Credit Reporting Act (FCRA) and the Equal Employment Opportunity Commission (EEOC) guidelines. These laws provide the foundation for conducting lawful background checks.

    Source: The Fair Credit Reporting Act, 15 U.S.C. § 1681 et seq. (2022), EEOC Enforcement Guidance on the Consideration of Arrest and Conviction Records in Employment Decisions Under Title VII (2012).

    2. Obtain Candidate Consent

    Employers must obtain written consent from job applicants before conducting any background checks. The consent form should be separate from the job application and explicitly state the intent to perform a background check. Transparency is crucial to ensuring compliance with legal requirements.

    Source: 16 CFR Part 698 – Procedures for the Handling of Consumer Report Information (2022).

    3. Choosing a Background Screening Vendor

    Selecting a reputable background screening vendor is vital. Ensure that your chosen vendor complies with the FCRA and is well-versed in the applicable laws and regulations. This vendor should provide accurate and up-to-date information while safeguarding data security.

    Source: The Fair Credit Reporting Act, 15 U.S.C. § 1681 et seq. (2022).

    4. Specific Checks to Consider

    Depending on the nature of the job, different types of background checks may be necessary. Some of the most common ones include:

    a. Criminal History Check

    • Verify criminal records at both the state and federal levels.
    • Ensure adherence to “ban the box” legislation where applicable.

    b. Credit History Check

    • This is relevant for positions involving financial responsibilities.
    • Ensure compliance with FCRA regulations for credit checks.

    c. Employment Verification

    • Confirm past employment history, positions held, and reasons for leaving.

    d. Education Verification

    • Validate educational credentials and degrees earned.

    e. Reference Checks

    • Contact provided references to gain insights into the candidate’s character and work ethic.

    Source: Fair Credit Reporting Act, 15 U.S.C. § 1681 et seq. (2022).

    5. Individualized Assessment

    The EEOC emphasizes the importance of individualized assessment when considering an applicant’s criminal history. Employers should evaluate each case individually, considering factors like the nature and gravity of the offense, the time that has passed, and the relevance to the job. Blanket bans on hiring individuals with a criminal record may lead to legal issues.

    Source: EEOC Enforcement Guidance on the Consideration of Arrest and Conviction Records in Employment Decisions Under Title VII (2012).

    6. Adverse Action Process

    When you decide not to hire an applicant based on the results of a background check, you must follow the adverse action process as outlined by the FCRA. This involves providing the applicant with a pre-adverse action notice, a copy of the background check report, and a summary of their rights under the FCRA. After allowing the applicant an opportunity to dispute the report, you can then issue a final adverse action notice.

    Source: The Fair Credit Reporting Act, 15 U.S.C. § 1681 et seq. (2022).

    7. Data Security and Retention

    Safeguarding the personal and sensitive information collected during background checks is crucial. Employers must establish secure data storage and retention policies, ensuring compliance with applicable data protection laws, such as the General Data Protection Regulation (GDPR) for EU residents.

    Source: General Data Protection Regulation (GDPR), Regulation (EU) 2016/679 (2018).

    8. Stay Current with Changing Laws

    Laws and regulations governing background checks are subject to change. Employers must stay informed about updates in legislation at both the federal and state levels. Ignorance of the law is not a valid defense in case of non-compliance.

    Source: Regularly review official government websites and consult with legal counsel to stay updated on changing laws and regulations.

    9. Addressing Discrimination and Bias

    Employers must remain vigilant against discrimination and bias when conducting background checks. The EEOC guidelines are clear that background checks should not disproportionately affect certain groups. Ensure that your hiring process is inclusive and does not unfairly exclude candidates based on their background.

    Source: EEOC Enforcement Guidance on the Consideration of Arrest and Conviction Records in Employment Decisions Under Title VII (2012).

    10. Record-Keeping Requirements

    It’s crucial to maintain detailed records of the entire background check process. This includes consent forms, communication with candidates, and copies of reports. In some cases, specific retention periods may apply, so ensure your record-keeping practices align with legal requirements.

    Source: Retention requirements may vary by jurisdiction, consult with legal counsel to determine the appropriate retention period.

    11. Confidentiality and Non-Disclosure

    Maintain strict confidentiality regarding the information obtained through background checks. Disclosing such information without proper consent or legal justification can lead to legal repercussions. Be aware of the information that can and cannot be shared.

    Source: Fair Credit Reporting Act, 15 U.S.C. § 1681 et seq. (2022).

    12. International Considerations

    If you are hiring internationally or working with candidates from outside your country, be aware of the specific regulations that apply. For instance, the GDPR imposes strict data protection requirements that must be adhered to when dealing with European candidates’ data.

    Source: General Data Protection Regulation (GDPR), Regulation (EU) 2016/679 (2018).

    13. Consult Legal Counsel

    When in doubt or dealing with complex situations, consult with legal counsel. An attorney experienced in employment law can provide invaluable guidance to ensure your background checks are legally compliant.

    Source: Seek advice from a qualified employment attorney to address specific legal concerns.

    14. Training and Awareness

    Ensure that your HR staff and hiring managers are well-informed and properly trained in conducting background checks. This includes understanding legal requirements, maintaining fairness and impartiality, and safeguarding sensitive information.

    Source: Develop a comprehensive training program for HR and hiring personnel to stay compliant with legal obligations.

    15. Ongoing Monitoring

    Background checks shouldn’t be a one-time event. Periodic re-evaluation of employees, especially those in sensitive positions, can help ensure ongoing suitability and compliance with company policies and legal requirements.

    Source: Develop policies and procedures for periodic rechecks of existing employees, especially those in high-risk roles.


    Conducting legal background checks on employees is a vital step in the hiring process. It helps ensure the quality of your workforce while mitigating legal risks. By adhering to the legal framework, obtaining proper consent, choosing reputable vendors, and following best practices, employers can make informed, lawful, and fair hiring decisions that benefit both their organization and their employees. Stay informed, consult legal experts when needed, and maintain a commitment to compliance throughout the employment lifecycle.

    Note: Information found on this site is information only and is not intended to be used as legal advice. Please consult your counsel for specific legal advice.