Many small businesses, which either don’t have the time and resources to conduct their own employee background checks or want to be certain they are in full compliance with the Fair Credit Reporting Act (FCRA), work with third party companies in order to get information on the people they are considering hiring.
Did you know that there is a national association that represents professional background screening companies? Working with organizations that are members of this association can assure you that you’re working with credible and trustworthy companies that will research history about your candidates safely and within FCRA guidelines.
BackgroundsOnline.com is one of those companies. We spoke with Jennifer Wiehl, the company’s Director of Operations, about the benefits of working with a third party company, and what kind of mistakes you, as a small business owner, can avoid when conducting an employee background check.
Tell us about BackgroundsOnline.com. How long have you been in business and what kind of companies do you work with?
BackgroundsOnline.com is a privately-owned employment screening company based in Sacramento, California. We have offered innovative, technology-enhanced employment screening solutions since May of 1997. We are a member, in good standing, of the National Association of Professional Background Screeners (NAPBS). We specifically specialize in pre-employment screening and background checks in order to focus on providing that particular service in an exceptional manner. In addition, our company’s flexible nature enables us to work with and suit the needs of small businesses and large enterprises alike.
What is the Fair Credit Reporting Act and why is it important?
The federal FCRA is a United States law first drafted in 1970. It is enforced by the Federal Trade Commission (FTC). In the beginning it regulated the dissemination of consumer’s credit information, but it has grown to encompass enforcement of the collection and dissemination of consumer information, including employment background checks, granting of insurance, and even tenant screening.
Compliance with the FCRA is incredibly important, not only to protect the entities conducting the background checks, but also to protect the consumers (or the subjects of background checks). The FCRA allows for consumers to dispute the information reported on their background checks as well as putting in place measures to ensure the information being reported is accurate and as up to date as possible.
The FCRA also states:
- Employers must have applicants give permission to run the background check by signing a standalone document consisting of only the release and disclosure.
- The release form must disclose the nature of the background check: for instance, what is going to be searched.
- Employers must follow the pre-adverse and adverse action procedures when they decide not to hire someone based on information on the background check.
- Employers must also provide applicants a copy of the Summary of Rights Under the FCRA when denying an applicant a position.
Backgrounds Online provides its clients with online templates of all the forms listed above.
Why might small businesses in particular run background checks on prospective employees?
An unscreened applicant can cause a small business substantial harm if he or she is brought on without a background check first being conducted. Small businesses may not have the financial ability to fend off a potential lawsuit, nor may they be able to survive the media attention that may come out of something going wrong. Recently, a café owner in North Carolina hired a cook and didn’t complete a background check. What he did not know was that the cook had just been released from prison for robbery as well as breaking and entering at his previous place of employment. Sadly, he ended up stealing $2400 from his new employer and killed his supervisor, who was pregnant with her first child. While this may be an extreme example, it drives home the importance of running criminal background checks.
What kind of information can a small business owner gather about a job candidate? How should they use this information?
A small business owner can gather information about criminal records, motor vehicle records, previous employment verification, degree verifications, address history, pre-employment credit reports and other information. We recommend employers meet with their legal counsel to draft out a background check policy and stick to it. In light of the Equal Employment Opportunity Commission’s recently-published guidance regarding the use of criminal records in employment screening, it is even more important for companies to have a policy in place. The EEOC recommends that no business have a blanket “no hire” policy. For instance, they should never say, “Anyone with a felony will not be considered.” Rather, each criminal charge should be looked at and individually assessed. An employer’s legal counsel will be best suited to help the company stay within the EEOC’s guidance.
What are some of the biggest mistakes small businesses make when running background checks?
One of the biggest mistakes we see employers make is trying to shortcut the background check process. Some may be attracted by inexpensive, instant public record websites. However, if you look closely at the terms of service on those sites, you’ll find that the vast majority of them are not compliant with the FCRA. What does that mean? They can’t be used for pre-employment screening. On top of that, the databases are known to have errors and misinformation. While it’s tempting to get a product that is “quick and cheap,” it’s also dangerous.
Another mistake employers make is not having the release form signed or not following the adverse action procedures. As mentioned above, these are requirements of the FCRA and are enforceable by the FTC. We have seen employers get hit with class action lawsuits for not following these simple requirements.
What are the benefits of working with your company vs. conducting an employee screening on your own?
We know how to keep our clients compliant with state and federal laws. Furthermore, employers who run background checks on their own may not always know how to interpret the information they get, and they may not know where to go or how to navigate the courts. We specialize in pre-employment screening to be able to be the best help for our customers. One of our clients, Lisa Sinizer, the Director of Human Resources for Printroom, Inc., recently said, “I really enjoy using Backgrounds Online because whenever I have a question or may not understand what I’m reading, all it takes is a phone call to your company to get the answers I’m looking for.”
Backgrounds Online’s staff seeks to help every client’s individual needs with an attitude of “we’ll do what it takes.” We do not support a “call center” environment and never outsource our client support staff. Every member of our team is fully trained to assist clients quickly and efficiently, and they are willing to bring a unique problem-solving approach when required. Each member of our Client Support Team has completed and achieved the FCRA Basic Certification awarded by the National Association of Professional Background Screeners (NABPS). Our office is staffed from 5:00 am to 5:00 pm (PST) in order to provide support to all areas of the country. All of our employees undergo a complete background check and are bonded.
Please note: background checks on prospective employees must comply with the Fair Credit Reporting Act. More info here.
Photo source: BackgroundsOnline Facebook