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The Complexities of Background Checking

August 29, 2020

By Susan Chance, courtesy of SBAM Approved Partner ASE

There has been a lot of press in the last few years about the steps employers must follow before obtaining a background check on an employee or applicant. While there is no doubt that it is very important for employers to obtain completed FCRA compliant Authorization and Disclosure forms, the employer obligations do not stop there.

It is vital that employers stay abreast of background checking requirements in all locations where they do business and hire employees. Even before the COVID lock down, many jobs were remote. An employer in Michigan may hire someone who works from home in California, or Ohio, or any other state. In those cases, employers must follow all background checking laws in the location where the applicant resides.

For example, in Michigan, there are no restrictions on running credit checks for employment purposes, although it is wise to make sure there is a bona fide occupational qualification for running said check. However, California has very tight restrictions on using credit checks for employment purposes. If your applicant resides in California, even if they plan to eventually relocate, you must follow the laws for California.

Ban-the-box laws almost seem to be old news as they have been around so long now, but those laws are being enacted in new locations all the time. The laws, although they have the same goal in mind, can differ from place to place, and it is important to follow those laws correctly in each location.

Many cities and states have also put laws into place to govern when and how employers can use criminal records. The least of these is to consider how the offense relates to the position and how long ago it was committed. The most stringent laws have forms that have to be completed which detail how and why the criminal records were considered. Those processes are very detailed and very specific on what has to be done and when.

The obligations for employers do not stop there. Once a background report is complete, and before the employer can take any adverse action, they must follow the two step Pre-Adverse/Adverse Action process which gives the applicant the opportunity to dispute the information contained in the background report.

Criminal records are entered into various databases by court clerks, police department employees, etc., and therefore are subject to human error. Updates to the information can be delayed, or sometimes a record is updated at the county level but does not get updated at the state level. This is why it is so important to follow the Pre-adverse Action process.

Records can be incorrect for a number of reasons such as a record being listed as a felony, but an update made in court to knock the charge down to a misdemeanor was not updated on the record. Perhaps a charge that was dismissed is still showing as pending. For people with common names, it is not unusual for the records of others with the same name to show up on a report. There are too many reasons to list all of them here.

Starbucks learned the hard way just how serious it is to follow the 2-step process. There are two class action lawsuits pending against the coffee giant for rescinding job offers based on background checks without giving the applicants the opportunity to dispute the information.

From the first step to the last, employers must follow all laws and regulations for running background checks.

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