Background Check Process

Steven Cesare, Ph.D.

An Illinois-based company contacted me the other day to request some procedural information about conducting background checks. This topic was once very straightforward and useful, but, like a lot of human resources topics, it is now very delicate, bureaucratic, and litigious. An overarching focus is to rely solely on the process conducted by the vendor who must assure your company that their procedures are legal in your home state and in accordance with the federal Fair Credit Reporting Act (FCRA). By relying on their procedures, you can hold them accountable for any potential legal implications arising from discrimination.

1.) First things, first: Treat everyone equally.

It is illegal to check the background of applicants and employees when that decision is based on a person’s race, national origin, color, sex, religion, disability, genetic information (including family medical history), age (40 or older), etc. For example, asking only people of a certain race about their financial histories or criminal records is evidence of discrimination.

2.) Before conducting the background check…

The employer must tell the applicant or employee it might use background information for decisions about his/her employment. This notice must be in writing and in a stand-alone format. The notice can’t be in an employment application. The company can include some minor additional information in the notice (like a brief description of the nature of consumer reports), but only if it doesn’t confuse the employee. The vendor should provide this verbiage to the company. Companies can only conduct a background check if the applicant or employee provides written consent.

3.) If you ask a vendor to provide an “investigative report”…

…(i.e., a report based on personal interviews concerning a person’s character, reputation, personal characteristics, and lifestyle) the company must also tell the applicant or employee of his/her right to a description of the nature and scope of the investigation.

4.) Certify to the vendor that your company has:

  • notified the applicant/employee and got his/her permission to get a background report;
  • complied with all of the FCRA requirements, and
  • won’t discriminate against the applicant or employee, or otherwise, misuse the information in violation of federal or state equal opportunity laws or regulations.

5.) If or when it happens…

…”before” you take adverse action against an applicant (i.e., not hiring him/her) or employee (i.e., termination) based on background information obtained through the vendor, you must give the applicant or employee:

  • a notice that includes a copy of the consumer report you relied on in making the decision; and
  • a copy of “A Summary of Your Rights Under the Fair Credit Reporting Act,” which your company should have received from the vendor that conducted the background check and compiled the applicant/employee summary report.

This prior notice allows the applicant/employee to review the report and explain any negative information.

6.) After taking an adverse employment action, the company must inform the applicant or employee:

  • that s/he was rejected because of information in the report;
  • the name, address, and phone number of the vendor that compiled the background check report;
  • that the vendor who compiled the summary report didn’t make the hiring decision, and can’t give specific reasons for it; and
  • that s/he has a right to dispute the accuracy or completeness of the report, and to get an additional free report from the vendor within 60 days.

7.) Any employment records the company keeps…

…(including all application forms, regardless of whether the applicant was hired, and other records related to hiring) must be preserved for one year after the records were made, or after a personnel action was taken, whichever comes later. If the applicant or employee files a charge of discrimination, the company must maintain the records until the case is concluded.

If you have any questions or comments about this topic or anything else related to human resources, simply call me at (760) 685-3800.

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Steve Cesare Ph.D.

has more than 25 years of Human Resources experience. Prior to joining The Harvest Group, Steve worked with Bemus Landscape, Jack in the Box, the County of San Diego, Citicorp, and NASA. Steve earned his Ph.D. in Industrial/Organizational Psychology from Old Dominion University, and has authored 68 human resources journal articles. As a member of The Harvest Group, Steve’s areas of expertise include: staffing, legal compliance, wage and hour issues, training, and employee safety.  Read Steve's full bio.