Conducting background checks on potential employees is a major part of the business process. Whether you're new to employment screening or already have a program in place to run background checks on candidates, it's our goal to provide helpful education so you create and implement a process that's right for your business and keeps you compliant. It's important to remember you don't have unlimited rights to dig into an employee's background or personal life, so you need to know what you can and can't do when conducting pre-employment background checks.

When hiring new employees, you want as much information as possible to make smart decisions.  But there's a caveat. Employees have privacy rights in certain areas, and it's a right they can enforce with legal charges if background checks are not conducted within the laws that govern employment screening.

Become familiar with the Fair Credit Reporting Act (FCRA). Regulated by the Federal Trade Commission (FTC), the FCRA gives the employer and applicant a fair method for processing reports for employment screening. All reports compiled and received by employers are subject to the laws of the FCRA. Prior to conducting a background check, you must supply the applicant with a “Summary of Your Rights Under the Fair Credit Reporting Act” (applicant's rights) and obtain their written permission using an Authorization and Release Form. If you decide not to hire or promote someone based on information in their report, you must provide a copy of the report and inform the individual of his or her rights to challenge the report under the FCRA by supplying an Adverse Action Form.

If information should surface that an employee is unfit for the job, your business can be held liable for negligent hiring. No business is immune from negligent hiring due to poor hiring practices. Negligent hiring is based on the premise that employers have an obligation to protect employees and clients from harm or injury (or “foreseeable” acts) caused by an employee. If a company fails to conduct a background check prior to hiring and an employee commits an unspeakable act, the employer assumes the liability for the employee's actions. This is why it's necessary for employers to perform due diligence and conduct background checks on every new hire, regardless of business size.

Therefore, it's important to know what's permitted (and what's not) when checking a potential employee's background and work history. It's a good idea to consult with an attorney and perform legal research to gain knowledge on the laws on federal, state and local levels (and the laws governing their access and use in the hiring decision making process – they can vary from state to state) prior to conducting pre-employment screening. When setting-up and implementing your background screening program, here are a few guidelines to remember:

• Create a written background check policy specifically for your business.
• Follow all FCRA guidelines and federal, state and local regulations.
• Use a combination of screening products and develop job-specific searches.
• Establish criteria to evaluate information – what will constitute disqualifying information.
• Eliminate subjective opinions to ensure consistency when reviewing results.

Employment screening is your first line of defense in protecting your employees and company assets. So what type of background checks best benefit your business? What types of background checks should you run? Not all “types” of background checks need performed for every job or position within your company. Most basic background checks involve criminal reports, Social Security number/address history and education/employment verification. The option always exists to expand a search beyond the basic screening components (most additional checks are usually determined by the job title or function). Depending on the position, you can add additional searches such as motor vehicle reports, professional licenses, credit history and drug testing.

Determining the types of background checks to run at your business is rather simple. First, categorize the different job positions in your company into levels like the first row in the sample chart below.

Start with basic background check components. Then add additional searches to a “package” based on your company's specific needs (reference types of searches in the chart above). For example, if you have positions where driving for business reasons is required, add a motor vehicle report for that specific job function. However, if you're screening for certain types of administrative roles, a basic background check may suffice.

In short, the best background check is a “comprehensive background check,” which consists of all the necessary screening components that are important to the job responsibilities, performance, qualifications, or level of involvement within your company. Make sure there is a job or business-related reason for the selection process utilized (i.e. motor vehicle records for drivers, credit checks for financial positions).

Your business wants to receive a return on your investment and mitigate potential legal and financial exposures. Done right, background screening helps protect your business from negligent hiring. Remember to make sure the information you use to hire or deny employment is based on facts and relevancy to the position. Your main concern in conducting employment screening is to stay in compliance with the Fair Credit Reporting Act and other federal, state and local laws. While the scope and method of employment screening can differ between businesses, the purpose remains the same, to hire the most qualified candidates. As the demand for background checks continues to increase, learning the legalities involved and implementing the right screening policies and procedures can set a benchmark for your business.