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Performing an Employee Background Check

Employee background checks are a vital way for an employer to learn more about the applicant, but can also be a source of potential liability. With the explosion of online information, information on individuals has become more and more available, but it pays to be careful about where you look for information and which questions you ask.

Make Your Employee Background Check Reasonable

Running an employee background check can not only be helpful in better understanding the applicant, but can also be useful in protecting a business from liability. Employers must still be very careful about what kind of information they ask for and look into, however. If an employer goes too far, he or she may face a lawsuit. Here are some things to keep in mind when performing an employee background check:

  • Be reasonable: The best advice for an employer running a background check is to keep such an investigation reasonable. Running a credit report and checking up on references makes a lot of sense, but combing court records, interviewing neighbors and requiring physicals for all of your applicants may not make much sense and may get you in trouble.
  • Make your investigation business-related: Part of being reasonable is ensuring that your background check is really business-related. If you are hiring a security guard, then digging heavily into a person's criminal background may be extremely relevant and justified. If you are hiring a part-time janitor, you may not need to go to such lengths. In order to avoid being sued, make sure to tie what you're asking for directly to the job at hand.
  • Get the applicant's consent: Another way to avoid liability in general is to get the applicant's consent before accessing potentially sensitive information. Some things, like credit checks, expressly require you to get the applicant's consent, but even if you might otherwise have access to sensitive information, it pays to be careful and get the applicant's consent in writing. The easiest way to do this is to simply ask for the consent on a job application.

Records an Employer Can Likely Consider when Performing an Employee Background Check

Some of the records below, such as credit reports, drug tests and driving records, require the consent of the applicant, but are still considered routine records to be used when performing a background check. As discussed above, regardless of the record type, always make sure that such an inquiry is related to the job. Asking a pizza delivery man for his driving record makes sense, but asking a software engineer for his or her driving record may not be as relevant.

Here's a list of the types of records routinely involved in an employee background check:

  • Credit reports
  • Drug tests
  • Driving records
  • Social Security number
  • Court records
  • Character references
  • Property ownership records
  • State licensing records
  • Past employers
  • Personal references
  • Sex offender lists

Finally, if you decide not to hire someone based on his or her credit report, you must provide the applicant with a copy of the report and advise the applicant of his or her right to challenge it. Also be aware that several states have even stricter rules limiting the use of credit reports, so check your state's laws before turning down an applicant based on their credit.

Records You May Not be Able to Consider when Performing an Employee Background Check

  • Criminal records: Whether employers can access criminal records varies greatly between states, but in many states such records can only be used by certain employers such as public utilities, law enforcement, security guard firms, and child care facilities. Even if employers cannot access criminal records, whether employers can ask about past criminal activity also varies greatly between states, but some states allow employers to ask about a criminal past even if they won't allow employers to access criminal records. This is probably a potential employer's biggest area of liability and it is highly recommended that you consult a lawyer to find out the rules applicable in your particular state.
  • Bankruptcies: Although bankruptcies are a matter of public record, employers generally cannot discriminate against applicants because they have filed for bankruptcy.
  • Worker's compensation: When a person files a worker's compensation claim, the case becomes a public record. An employer may usually only use this information if the injury might interfere with the applicant's ability to perform the work required by the job, however.
  • Medical Records: Medical records are confidential and generally cannot be released without an applicant's knowledge or authorization. Employers can require a physical examination for the job if it makes sense, however, in which case the employer will have access to those results.
  • Military Records: Under the federal Privacy Act, military records are confidential and can only be released in very limited circumstances
  • Educational Records: Generally, transcripts, recommendations, discipline records, and financial information are confidential and cannot be released without consent. If the applicant gives their consent and it makes sense for the job, however, transcripts can be, and often are, requested.
Next Steps
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