Comply with State Laws – Screening Potential Employees

by Joe Killinger
CEO, theRRD.com

Federal law requires compliance when obtaining background checks. Failure to get the applicant’s authorization or following the proper disclosures can result in legal consequences including lawsuits against you in both state and federal court. Every state has different laws and guidelines for background screening. If you use a third-party or CRA they are required to abide by the FCRA. The different Laws pertain to getting consent, how many years back one can look and how one must report information found.  Understanding the laws and regulations surrounding background checks is the most important part of employment background screening. You might find out a candidate lied on their application or that they have a criminal past that excludes them from employment at your business. However, if you don’t follow the FCRA rules and state regulations you can’t use that information to influence your decision. If you do, you’re opening yourself up to costly lawsuits.

A background check is a powerful tool that allows companies to ensure they hire only the best most qualified candidates. These reports act as a deterrent for bad employees as well. Candidates who know their past work experience will be checked out are less likely to mislead your company and if they know they could be screened, they won’t even apply with incorrect information. The job market is definitely competitive and unfortunately that means some candidates will mislead you to get ahead. More than that, some candidates may have past that excludes them from employment at your company. Employment screenings are a great way to perform your due diligence when hiring and can protect your company but only if you follow the rules.

The various rules and regulations are determined by state agencies, lawmakers and regulations within the Federal Credit Reporting Act. There are many laws that govern the way background information can be used, or requested:

Below are some of the Fair Credit Reporting Act (FCRA) vendor and employer requirements.

  • Fair and Accurate Credit Transaction (FACT) Act
  • Federal Trade Commission regulations
  • State laws and regulations requiring specific documents
  • State and federal report limitations
  • The Driver’s Privacy Protection Act (DPPA)
  • The Gramm-Leach-Bliley Act (GLBA)
  • Department of Transportation regulations
  • State consumer privacy laws
  • Drug testing requirements
  • Federal Trade Commission regulations
  • Case law, including cases that interpret the FCRA compliance and state privacy laws

Check out some of these requirements and confirm that you are complying with your state law.

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