An Easy Guide to Background Checks for Small Businesses 19 Oct 2017
If you’re a small-business owner, your work is your passion. You’ve built your business through long hours and dedication, and you only want the best for the future. That’s why hiring the right staff is essential. With the right people, you know your business will thrive, whether you’re hiring one, 10, or 100 employees.
Applications, interviews, and online searches are all essential parts of the hiring process. But if you’re tempted to skip an official background check for small businesses, you could be making a big mistake. You can give yourself peace of mind and know your future will be bright when you can confidently extend an offer to a candidate who has passed a trusted background check.
Legal Background Checks for Small Businesses
According to the U.S. Equal Employment Opportunity Commission (EEOC), except for certain restrictions related to medical and genetic information, it’s not illegal for an employer to ask questions about an applicant’s background, or to require a background check. However, any time you use background information to make an employment decision, you must comply with federal laws that protect potential employees from discrimination.
The most important thing to keep in mind is to treat everyone equally. If you don’t have a standard policy for background checks, now is the perfect time to establish one. This provides your business a baseline to follow during hiring procedures for all applicants. Plus, it means you aren’t selectively requesting background checks only from certain individuals, which is against the law.
Discrimination laws are enforced by the EEOC. You are not allowed to discriminate based on:
Genetic information or family medical history
To find out more about federal anti-discrimination laws, visit www.eeoc.gov or call 800-669-4000.
FCRA Background Check
It can be difficult to reliably and legally uncover the necessary information for an employee background check, which is why many small-business owners hire companies like Trusted Employees that specialize in these types of reports. Any time you use a company to get a background check, you must follow the Fair Credit Reporting Act (FCRA), which is enforced by the Federal Trade Commission (FTC).
For an FCRA background check, you must follow a few important steps. A reputable background check company should be able to provide you personalized guidance so you can feel confident you are compliant with FCRA regulations. If you have questions, feel free to ask your Trusted Employees’ account manager.
Here are some of the primary steps you must take for a compliant FCRA background check:
Notify the applicant: As the employer, you must notify the applicant in writing that you will be running a background check. This notification needs to be separate from the employment application.
Provide explanation: You must tell applicants that you may use the information found in the background check to inform your hiring decisions. They need to understand that what you uncover could affect whether they are offered a job.
Get permission: You cannot run a background check for hiring decisions without the applicant’s written consent. Many employers provide a form with the notification document that must be signed before proceeding.
Notify the vendor: Relay all this information to the background check company you hired so they can begin the search and verification process in a lawful manner that follows all federal or state regulations.
Components of Background Checks for Small Businesses
Laws regarding background checks for employment purposes are always changing. What’s more, these regulations can vary from state to state and city to city. For example, in some places you are able to freely check a candidate’s credit history for hiring purposes, while in others that is in violation of the law. Working with a reputable background check company can help ensure you always follow ever-evolving legislation.
Once you receive your report, you can use the information to make the best hiring decision for your company. If you decide to eliminate a candidate because of information uncovered on the report, you must follow a few specific steps.
Action Based on Background Report Information
If you decide you’re not hiring a candidate because of something you found on a report, the FCRA requires you to follow standard procedures.
First, you must supply the applicant with a copy of the report you used. Additionally, you must include a copy of “A Summary of Your Rights Under the Fair Credit Reporting Act.” The background check company you purchased the report through should supply you with this document.
At this point, the applicant has the opportunity to respond to the report and explain any of the findings. You may then weigh your hiring decision further, and if you continue with the decision to dismiss the candidate based on the report, you must tell the applicant verbally, in writing or electronically.
Make sure that you note he or she is being rejected based on the report information. Include the contact information for the background check company and note that the candidate has a right to dispute the accuracy or completeness of the report, and can get an additional free report from the reporting company within 60 days.
Protect Your Future by Taking Action Today
You can help ensure a bright future for your organization by making background checks for small businesses a standard part of your hiring procedures. When you consider what’s at stake, it’s a small investment for the peace of mind that what you’ve built from the ground up will continue to prosper.
Robyn Kunz is the Chief Compliance Officer at Trusted Employees. She has worked in the background screening industry for over 15 years and holds Advanced Certification in the Fair Credit Reporting Act from the National Association of Professional Background.
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