Background Checks

Background checks for new hires have historically been one of the administrative maintenance items that are relegated to the HR department. More recently, much of this task has been outsourced to third-party background check firms, due mainly to (1) lack of internal resources to devote to this task and (2) complexity of the compliance issues that have developed in the applicable laws.

According to a CareerBuilder survey from 2016, 72% of employers run some type of background check on every new employee. Of the employers using background checks, 82% are vetting new hires for criminal history as well as employment history.

Why do them? What happens if I don’t do them?  Potentially a lot of bad stuff.  Background checks improve the chances of not making a bad hire.  They can be a very valuable tool in your selection process toolbox if done properly.  But there are rules that you need to follow to avoid landmines that can be stepped on.

The first landmine is the requirements under the Fair Credit Reporting Act (FCRA).  This Act was intended to provide protection to individuals from overly aggressive debtors/collection agencies. These protections have spilled over into the employment arena, creating rules to be followed by employers when a third party is used for background checks, and not just for financial credit checks.

Employers using consumer reports to screen job applicants must follow specific procedures:

  • Get the applicants written permission;
  • Tell the applicant how you intend to use the report;
  • Not misuse the information;
  • Give the applicant a copy of the report if you decide not to hire the applicant; and,
  • Give the applicant an opportunity to dispute the information contained within your credit report before rejecting the applicant from consideration.

The notice requirements can be met by including specific language in the employment application to be completed by each applicant (see post on Employment Applications). Your outside background check provider can assist you with this.

Next landmine…. EEOC  Enforcement Guidance on the Consideration of Arrest and Conviction Records in Employment Decisions (released in April 2012).  Due to the adverse impact on certain minority groups in the application process, the EEOC has taken the position that safeguards are needed in the background check process to avoid discrimination against those groups. Although these safeguards are not legally required, they are highly recommended by the EEOC (which means that you should pay attention to the guidance).

The following are examples of best practices for employers in considering criminal record information when making employment decisions:


  • Eliminate policies or practices that exclude people from employment based on any criminal record.
  • Train managers, hiring officials, and decisionmakers about Title VII and its prohibition on employment discrimination.

Develop a Policy

  • Develop a narrowly tailored written policy and procedure for screening applicants and employees for criminal conduct.
    • Identify essential job requirements and the actual circumstances under which the jobs are performed.
    • Determine the specific offenses that may demonstrate unfitness for performing such jobs.
    • Determine the duration of exclusions for criminal conduct based on all available evidence.
  • Train managers, hiring officials, and decisionmakers on how to implement the policy and procedures consistent with Title VII.

Questions about Criminal Records

  • When asking questions about criminal records, limit inquiries to records for which exclusion would be job-related for the position in question and consistent with business necessity.


  • Keep information about applicants’ and employees’ criminal records confidential. Only use it for the purpose for which it was intended.

See for further information.

In summary, background checks are valuable in the selection process but must be performed correctly and the information obtained must be used properly.

Published by Dave Waldorf

Former Human Resource and legal professional specializing in HR compliance advisory services. Finding my new life in Arizona with my wife of 43 years and our two shelties.

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