While commonplace, screening candidates and navigating the background check process can be daunting – you need to know what’s allowed in each jurisdiction, how you’re obligated to handle and store sensitive information, and more.
Understanding these legal frameworks isn’t merely a formality; it’s essential to protect your organization against potential liabilities and foster a fair and equitable workplace.
This US background check guide outlines critical laws and regulations that HR professionals must adhere to during the hiring process in the US, alongside best practices to maintain compliance.
Alright, let’s dive into what being compliant looks like in practice.
Employment Law in the US
Employment law in the US consists of federal, state, county, and city regulations. Federal law covers various rights, including, civil rights protections against discriminatory hiring and employment practices, minimum wage, and unpaid leave. Many states implement additional protections in a broad array of areas.
Immigration Reform and Control Act
The Immigration Reform and Control Act (IRCA) mandates that employers verify the eligibility of candidates to work in the US. This includes completing the I-9, Employment Verification Eligibility form, which requires documentation proving identity and employment authorization. You should be aware of the specific documentation requirements and ensure compliance with the law to avoid penalties. This can be done by establishing a systematic process for completing I-9 forms and regularly auditing documentation to ensure compliance.
Equal Employment Opportunity Laws
At the forefront of hiring regulations are the Equal Employment Opportunity (EEO) laws, enforced by the Equal Employment Opportunity Commission (EEOC). These laws prohibit discrimination in employment based on race, color, religion, sex, national origin, age, disability, and genetic information, meaning you must ensure that your recruitment practices are non-discriminatory. This includes crafting inclusive job descriptions, training interviewers to avoid bias, and establishing standardized evaluation criteria for candidates to promote a fair hiring process.
Under the EEOC’s guidance, US employers can ask about criminal history information, but how and when it happens varies by jurisdiction.
Americans with Disabilities Act
The Americans with Disabilities Act (ADA) prohibits discrimination against individuals with disabilities and requires employers to provide reasonable accommodations during the hiring process and throughout employment. You must be cautious when asking medical or disability-related questions and should ensure that any assessments used during the hiring process are job-related and necessary.
The Fair Credit Reporting Act
The Fair Credit Reporting Act (FCRA) governs how employers can use consumer reports, including background checks, in the hiring process. You must obtain written consent from candidates before conducting background checks and inform them if any adverse action is taken based on the report. More specifically, if you decide not to hire, promote, or retain an individual based on information found in their background check, you must provide the individual with an adverse action notice.
This notice informs the person of the adverse decision and provides them with specific details, such as the name and contact information of the consumer reporting agency that provided the report, as well as information about their rights under the FCRA. Many states have additional adverse action requirements.
This law emphasizes transparency and accountability, requiring employers to provide candidates with the opportunity to dispute inaccuracies. My colleagues have published more on this in the blog post FCRA Requirements for Employers.
State and Local Employment Laws
In addition to federal laws, you must stay informed about state and local employment laws, which can vary significantly. Some jurisdictions have additional protections against discrimination or unique requirements for background checks. Understanding these laws is critical for avoiding costly legal issues.
For example, many states and municipalities have enacted “ban the box” laws, which restrict when and how you can inquire about an applicant’s criminal history. Many states, including California, have fair chance laws like The Fair Chance Act that generally prohibit employers from asking job candidates about their criminal history on a job application or during an initial interview. There are other city and county-specific ordinances, and the list is constantly growing. Consult with legal counsel to ensure your hiring practices are compliant across jurisdictions and talk to us today about managing requirements where you live.
Background Check Mistakes to Avoid
Background checks are designed specifically for the purpose of making informed hiring decisions and ensuring workplace safety and integrity. You can’t use background checks for any other purposes, such as discriminating against applicants based on their race, gender, or any other non-job-related factors.
The use of background information must strictly adhere to legal and ethical standards, particularly those outlined by the EEOC and FCRA, as we mentioned above.
Don’t make these compliance-related background check mistakes:
- Skipping the background check – Background checks can seem overwhelming because of all the different rules and requirements, especially if you’re hiring in new markets. While it may be tempting to skip a background check, they’re an important way to protect your business. For more information, read about The Dangers of Not Doing Background Checks.
- Not getting consent – Privacy laws around the world require employers and other businesses to obtain a consent form from applicants and users before beginning the process. Vendors must also be upfront about what data they’re using to run their background check, who their personal information is being shared with, and why.
- Not getting the right identification – For certain types of background checks, like a criminal record check through the FBI’s National Crime Information Center, the candidate needs to sign a consent form and provide specific forms of ID – this is all baked into our processes. This is to ensure that information returned on the background check is about the right person.
- Assuming background checks are the same in every country – Even neighboring Canada has very different background check processes. In some countries, criminal record checks may be comprehensive, including any convictions, while in others, they may only reflect recent offenses or specific categories of crime. Additionally, some countries may not have accessible national databases, which can limit the scope of background checks.
- Collecting too much data – On that note, it’s important for employers to know privacy laws and how they impact data collection. Processing large volumes of information takes time. Sorting through excessive data to find pertinent details can delay the screening process. It’s essential to strike a balance between gathering sufficient data for thorough screening and avoiding unnecessary information that can hinder efficiency (and cause costs to balloon). This is where we can help.
One easy way to avoid these mistakes is to establish a background screening policy. A company-wide policy can streamline the screening process and help ensure that searches are conducted consistently and efficiently. You can use your policy to delineate the types of screening required for different positions so your HR team doesn’t have to make individual determinations each time you hire. Here’s our guide on How to Create a Background Screening Policy.
How is a background check done for employment in the US?
In the US, background checks for employment are typically conducted through a series of steps designed to verify a candidate’s identity, criminal history, employment history, and other relevant information. Though, before beginning, employers must first obtain written consent from the candidate before conducting a background check. This is required by the Fair Credit Reporting Act (FCRA), which governs the use of consumer reports for employment purposes.
How to Choose a Compliant US Background Check Vendor
To save time and money, without compromising compliance or the accuracy of the results, many companies partner with background check providers instead of running checks on their own. This also saves your team from playing customer support.
Here are some of the things we suggest you look for when choosing a background check provider in the US:
Expertise: Assess the vendor’s experience in the background screening industry. Look for how long they’ve been operating and the types of companies they partner with. A vendor with a proven track record in your specific industry can offer valuable insights and tailored solutions.
Compliance: Do they conduct checks in accordance with US law? A compliant background check vendor will minimize your organization’s legal risks and help maintain ethical hiring practices.
Customization: Check if the vendor allows you to select from a range of background checks tailored to your specific needs. This flexibility is crucial for addressing the unique requirements of different roles within your organization.
Scalability: Consider whether the provider can accommodate your needs as your organization grows. Can you order only the checks you need without being tied to a long-term contract? This adaptability is important for scaling your hiring process efficiently.
International Capability: If your organization operates globally, consider whether the provider offers international background checks. This capability is essential for ensuring comprehensive vetting of candidates from different countries.
Reporting and Analytics: Consider whether the vendor offers comprehensive reporting and analytics capabilities. These features can help you make informed hiring decisions and track the effectiveness of your background screening processes over time.
Automation: Are the checks 100% automated and able to integrate with your HR software? This is important because automation streamlines not only the checks but also the hiring process.
Finally, don’t forget about customer support. As much as possible, choose a vendor that offers 24/7 customer support to their clients and their clients’ candidates.
Background Screening Compliance Support Tools
While our clients are responsible for managing applicant and candidate communications in accordance with their company’s background screening policies, we have several tools to help.
- Compliance Library – Our Compliance Library contains resources to help you create and maintain a compliant background screening program.
- Templates and Checklists – We offer state-specific handbooks and tools that help guide the assessment, guide compliance efforts.
- US Background Check Support – Our teams can answer one-off questions to support compliance review and help you implement a background screening policy.
- Compliant Candidate Support – Our customer support teams are here to help candidates understand how screening works, why it’s performed, and what happens when adverse information is uncovered.
- Applicant Portal – Our Applicant Portal allows candidates to quickly and easily complete background checks more transparently – candidates can track progress and manage all applications, including historic ones. We find that demystifying the background check process helps alleviate stress and improve candidate experience, both of which improve your chances of attracting and hiring the best candidates.
As a leading vendor with the world’s easiest background checks, you can say that trust is at the heart of everything we do. This includes compliance. All our background checks have built-in compliance.
Certn: Leading US Background Check Compliance
At Certn, we work with over 20,000 clients to successfully facilitate their screening and verifications, and this is how we support background check compliance in the entire lifecycle of the process, from product and system design to service fulfillment.
Compliance isn’t just a checkbox — it’s a cornerstone of trust and reliability. As a leading background check vendor, we understand the importance of maintaining the highest standards of compliance to protect both our clients and the individuals being screened.
Book a demo to tour our purpose-built products with strong encryption and robust security practices. From there, we’ll be able to explain the complete process to you, answer any questions you may have about which products to choose for which purposes, and help you build your screening program.
Our Compliance team closely follows developments in law, regulation, guidance and best practices to share with Certn clients through direct meetings with customers, newsletter updates, and online content to ensure our clients consider the relevant compliance developments in their screening program.
This publication is for informational purposes only and nothing contained in it should be construed as legal advice. We encourage you to consult with legal counsel regarding your specific needs. We do not undertake any duty to update previously posted materials.
