What You Need to Know About Background Checks: Best Practices and Legal Standards

Verifying a prospective candidate’s background should be a routine part of your hiring process. There are standards and ethics in doing so, and at times, the terminology can be confusing. Let us clarify some common questions and talk about a best-practice approach.

What is involved in a background check?

KEES is often asked about background checks, and we find that many people have different understandings. Some employers have policies concerning what will or won’t be checked.

• – Background Check reviews a person’s past and can confirm various aspects of employment, criminal records, education, licenses, driving records, etc.
• – Employment Verification is a process that contacts past employers and confirms dates of employment and title. Historically, it may have also confirmed salary/compensation and any commentary on whether a person could be rehired. However, in recent years, the focus has been on confirmation of dates and titles.
• – Reference Checks are often 1:1 direct conversations (or can be completed by survey or written letter) that engage with relationships surrounding the applicants and seek subjective (or objective) input on a person’s skill, abilities, knowledge, and character.

All three of these items are typically completed in Phase 3 of KEES’ 4-Phase Search Process.

Legal Framework: What are the rules, and are checks regulated?

The Fair Credit Reporting Act (FCRA) is the primary federal law governing employment background checks conducted by third-party screening providers. Its purpose is to ensure fairness, accuracy, and privacy in the process, and it provides several key requirements. KEES uses Checkr to support formal Background Checks and ensure that all are conducted in accordance with state and federal laws.

• – Disclosure & Authorization: Employers must provide a clear, standalone written disclosure and obtain written consent from the candidate before initiating a background check.
• – Adverse Action Procedures: If an employment decision might be affected by the results, employers must issue a pre-adverse action notice along with a copy of the background report and a summary of rights. After a waiting period, a final adverse action notice is required if the decision is not reversed.
• – Right to Accuracy and Correction: Candidates have the right to review their report and dispute any inaccuracies.
• – Recordkeeping: Documentation of the entire process, disclosures, consents, and adverse action notices should be maintained in compliance with applicable laws.
• – Criminal Records Reporting: Convictions may typically be reported indefinitely, while non-convictions are often limited to a seven-year period. However, state laws may further restrict reporting timeframes or mandate “Ban the Box” policies.

Employers are also expected to comply with EEOC guidelines, which prohibit discrimination based on race, gender, age, disability, and other protected characteristics during the hiring and background screening process.

Ethical Practices in Due Diligence

Beyond legal compliance, ethical considerations play a significant role in conducting Due Diligence that dives into the background of an individual. One common concern is how information is gathered, and another is the confidentiality of that information.

• – No “Back Door” Checks: Secretive or informal background checks conducted without a candidate’s knowledge or consent are not only unethical, they can also be illegal under FCRA and state privacy laws.
• – Respect for Candidate Privacy: Candidates may request that certain references not be contacted, and employers should respect these preferences where possible.
• – Going Beyond the Candidate’s List: Should an employer want to or find need to go beyond the information the candidate provided for verification, it must be done transparently and respectfully, always adhering to consent requirements for third-party checks.

When it comes to making hiring and staffing decisions, including promotion, reassignment, or retention, employers should understand the background of applicants or employees. While it’s generally legal to ask questions about someone’s background, doing so must be handled with care, transparency, and full compliance with applicable laws.

KEES believes in responsible hiring practices that uphold ethical standards and legal guidelines to protect both organizations and candidates. We are proud of conducting thorough processes and screening that often result in smooth sailing in the Due Diligence process for new hires.