Educational Guide to Background Screening
We at Global HR Research (or “GHRR” for short) are pleased that you have chosen us as your background screening provider. We developed this educational guide to provide our clients with important information about several aspects of the background screening process.
Part One: The Basics
When reading this guide, it is important that you know and understand the following terms:
Consumer: any person who is the subject of a background report. Examples may include applicants, employees, or prospective tenants.
Consumer Report: any report that contains information about someone’s credit worthiness, character, general reputation, personal characteristics, or mode of living and lifestyle for the purpose of evaluating the person’s eligibility for credit or insurance, employment purposes, or any other purpose authorized under the FCRA (aka “permissible purposes”).
Consumer Reporting Agency (“CRA”): any person or company that regularly engages in the business of assembling or evaluating information for the purpose of furnishing consumer reports to third parties. GHRR is a consumer reporting agency.
End User: An end user is any third party who receives a consumer report from a CRA. You, as an employer that orders and receives consumer reports from GHRR, are an End User. If you are a staffing agency, your customer may be a secondary End User if you supply the background check to them too.
Part Two: Compliance
The Fair Credit Reporting Act (or the “FCRA”) is a federal law that was primarily designed to protect the privacy of consumer information and to require consumer reporting agencies to adopt reasonable procedures for meeting the needs of commerce in a manner that is fair to consumers regarding the confidentiality, accuracy, relevancy, and proper utilization of their information. It is a common misconception that the FCRA only applies to the use of credit reports; however, the law applies to the use of all types of consumer reports, including those containing criminal records. The FCRA also regulates end user activities involving the procurement and use of consumer reports, especially those who do so for employment purposes.
Basic Steps for Complying with the FCRA
Certify Compliance with the Law
The FCRA requires end users to certify that they will comply with the FCRA as well as state and local consumer reporting laws. As we must obtain this certification before allowing customers to begin ordering consumer reports, GHRR requires customers to execute a “Consumer Report User’s Agreement.” Employers must also promise that they will not use the reports to violate federal or state equal employment opportunity laws. Any company that orders or receives consumer reports on your company’s behalf, such as a human resources administration organization or administrative service organization, must likewise promise to comply with these laws.
Every end user must have a permissible purpose to obtain a consumer report. Permissible purposes are prescribed by the FCRA and include reasons such as making employment decisions or for use in legitimate business transactions, such as tenancy screening.
Use of Consumer Reports
End users may only request reports for an exclusive one-time use. Consumer reports must be held in strict confidence and not disclosed to any party who is not involved in the employment, tenancy, or business decision giving rise to the need for the report.
Disclosure and Authorization
Before ordering a report for employment purposes, you must provide a disclosure to the consumer and receive the consumer’s authorization (aka “consent”). The FCRA disclosure must be provided to the consumer in writing and must inform the consumer that a consumer report about him or her may be obtained for employment purposes.
Disclosures must also be clear, conspicuous, and in a document that consists solely of the disclosure. In the past, employers frequently combined other information with the FCRA disclosure, such as liability waivers or terms of employment. However, it is essential that the disclosure be in a stand-alone document, as extraneous information could potentially confuse or mislead the consumer and invalidate the consumer’s consent to participate in the background check process.
The Adverse Action Process
If you plan to take adverse action based on the contents of a consumer report, you must follow the FCRA’s prescribed adverse action process. These are the key steps of the adverse action process:
- First, you should provide a pre-adverse action notice before deciding to take an adverse action against the consumer. Include a copy of the consumer report and a copy of “A Summary of Your Rights Under the FCRA” with the pre-adverse action notice.
- Next, you must wait a reasonable amount of time before taking the adverse employment action.
- Upon taking adverse action, you must provide the consumer with an adverse action notice.
Employers may contract with third parties to deliver adverse action notices, but they can’t outsource their liability to consumers. This means that the employer remains responsible to consumers, even if the third party fails to provide the notices.
Additional Compliance Considerations
Equal Employment Opportunity Laws
The Equal Employment Opportunity Commission (or the “EEOC”) advises employers to take special care when basing employment decisions on criminal records that are more common among individuals of a protected class, such as race, sex, or religion. Policies that consistently prevent these individuals from gaining employment may be considered by the EEOC to disproportionately affect those in a protected class and could become the basis of a claim of discrimination, especially if the policy is not “job related and consistent with business necessity.”
Employers can typically show “job relatedness and consistency with business necessity” by showing that they consistently consider the following:
- The nature and gravity of the offense or conduct.
- The time that has passed since the offense or conduct and/or completion of the sentence.
- The nature of the job held or sought.
The EEOC typically warns against taking adverse action against someone based on an arrest record alone and suggests that an arrest should instead trigger an inquiry into whether the conduct underlying the arrest justifies an adverse employment action. Additionally, some states such as California, forbid GHRR from providing you with information about arrests not leading to convictions.
Ban the Box & Salary History Inquiry Bans
Employers should be aware that several states and municipalities have laws that prohibit employers from asking prospective employees about criminal history information on the job application and instead require them to wait to investigate until after the interview stage or after a conditional offer of employment has been made. California, Massachusetts, and New Mexico are a few examples of states with stringent Ban-the-Box laws.
More than a dozen states also have laws known as salary history inquiry bans, which forbid employers from asking applicants about their wage history unless an offer of employment has been made and the individual’s salary has been agreed upon.
Part Three: Criminal History Reports
Standard Search Procedures
GHRR uses proprietary procedures designed to discover information relating to a Consumer. When searching for criminal history information located at the county level, GHRR searches the Predominantly Used Index of the Central Court. When searching state records, GHRR uses public record resources that are both readily accessible and reasonably complete. Some statewide criminal searches will be conducted with the state law enforcement (executive) agency, while others will be conducted with the state (judicial) administrative office of courts.
GHRR does not offer a statewide search in some states because there is no reliable, readily accessible statewide search available to the public. Not all statewide judicial or executive agency systems report criminal history information to the same extent as county-level judicial courthouse searches, so we always recommend ordering both statewide and county criminal searches for optimum search results.
If a statewide agency returns a “no disposition” or inconclusive information, we will automatically order a county judicial search to confirm the record. Though state repositories often contain information also available at the county level, searching both will not always return identical results. GHRR does not report duplicative criminal record information located when searching both locations.
Supplying accurate personal identifying information (“PII”) for consumers when ordering background checks is essential to enabling GHRR to conduct an accurate and complete search for information. We will not always catch typographical or clerical errors made by our customer or its applicants or employees when reports are ordered. It is the Customer’s responsibility to review and confirm the accuracy of the PII provided to GHRR to use when performing the background check.
Use of Commercial Databases
Commercial databases (e.g., the Multi-Jurisdictional Search, National Criminal Search, SSN Search, and other “instant” searches) are only used for the purpose of identifying residential address history and criminal history information that may potentially be related to the consumer. GHRR will not report this information to our customer. Instead, we go directly to the source of any potentially relevant criminal history information, such as a county courthouse.
A consumer may have been convicted under a different legal name or may have been known by another name at the time of his arrest and conviction. Many customers choose to search alias or “also known as” names in an effort to discover these types of criminal records. Customers should be aware that adding alias names to a criminal search or similar order will result in additional charges being incurred, as each name or alias is independently searched by our researchers.
Standard Reporting Procedures
The FCRA allows GHRR to report any criminal conviction, regardless of its age. However, pursuant to industry standard, we typically report pending criminal cases and felony and misdemeanor convictions for the seven years preceding the date of the request for a report, even though the Consumer may have convictions which are older than seven years, unless you expressly request otherwise.
Some states limit the number of years that we may report criminal convictions, so any agreement to extend our standard scope will be subject to the restrictions of those state laws.
GHRR typically calculates the reportability of convictions from the date of disposition, end of the sentencing term, or end of the probation term, whichever event occurs last. Some states prohibit reporting convictions older than seven years, and in these cases we disregard sentencing and probation and calculates reportability based upon the disposition date alone. Certain low-level convictions, such as ordinance violations, infractions, and traffic violations, may not be reported, even though they may be technically classified as misdemeanor-level offenses under a given state’s law.
The FCRA generally prohibits GHRR from reporting non-conviction adverse events that are criminal in nature that occurred more than seven years ago.Examples of non-conviction adverse events include records of arrest not leading to conviction, dismissed criminal charges, completed deferred adjudications, dismissed and vacated convictions, etc.
GHRR does not ordinarily report non-conviction adverse events, regardless of their age, unless you expressly request us to do so (provided that federal and state consumer reporting laws do not prohibit the reporting of said information). When reporting non-conviction information, we calculate reportability from the date of arrest or from the date the case was filed, rather than from the final disposition or dismissal.
Evolving Reporting Standards
Due to the continuing evolution of the law with regard to what is, and is not, legally reportable under federal and state consumer reporting statutes, our reporting procedures may change from time to time.
Consumer reporting laws require GHRR to establish a match of identity between the record containing adverse information and the Consumer. If GHRR cannot establish this identity match we will not report the adverse information, even though it may, in fact, belong to the particular consumer in question. This is also why it is imperative that customers provide GHRR with the correct information for consumers when ordering a background check report.
Part Four: Motor Vehicle Reports
When providing Motor Vehicle Reports, GHRR searches state motor vehicle record repositories and reports the driving history and status of a driver’s license. States typically provide 3 years of driving history. Generally, GHRR oﬀers both individual and commercial MVRs for all 50 states plus the District of Columbia and Puerto Rico. Information reported varies by state, but can include driving history information, such as insurance lapses, license suspensions, revocations, accidents, traffic violations, and outstanding warrants. Some states require special consent forms. State-imposed fees will be charged to the customer.
Part Five: Verification Services
GHRR independently verifies the employment information disclosed by the consumer, such as identity of present and past employers, dates of employment, titles, reason for leaving, eligibility for rehire, etc. When performing employment verification services, GHRR will make at least one solid attempt each day to contact the employer. A “solid attempt” is defined as an act that is reasonably likely to lead to the completion of the assignment of the order. All contacts are documented by the Verification Specialist in the notes which are time and date stamped automatically through the system. After a certain number of days, the verification order will be closed as incomplete.
The standard question format for employment verifications includes the applicant’s:
- position or responsibilities;
- start date of employment; and
- end date of employment.
When our Verification Department receives a customer’s order, we will contact the Human Resource Department of the employer or a third-party employment verification vendor contracted by the employer to obtain the verification. Applicants may provide incorrect contact information for past employers (either mistakenly or fraudulently), so GHRR uses a propriety method to authenticate the sources of verification information independently.
Some employers require that a signed release be mailed or faxed before employment will be verified. In these situations, we contact the client to obtain the applicant’s signed release and sends it to the employer via its required method of receipt. In instances when the information provided by the employer differs from the information provided by the employee, the employer’s information is entered onto the report and the results are flagged noting a discrepancy. If the employer will not verify the information, we close the request as “Unable to Verify” and flags the search. Third-party services may be required to complete verifications, and any resulting access fee will be passed along to the customer.
GHRR independently verifies education information disclosed by the consumer, such as schools attended, dates of attendance and graduation, the type of diplomas/degrees received, etc. When performing education verification services, we will make at least one solid attempt each day to contact the verification source. A “solid attempt” is defined as an act that is reasonably likely to lead to the completion of the assignment of the order. All contacts are documented by the Verification Specialist in the notes which are time and date stamped automatically through the system. After a certain number of days, the verification order will be closed as incomplete.
The standard question format for education verifications includes the applicant’s:
- type of degree obtained;
- academic major;
- dates of enrollment; and
- graduation date, if applicable.
When our Verification Department receives the client’s order, we will contact the educational institution or third-party educational verification vendor by telephone, e-mail or fax to obtain the verification. Some educational institutions require that a signed release be mailed or faxed before the educational information will be verified. In these situations, GHRR contacts the client to obtain the applicant’s signed release and sends it to the educational institution via its required method of receipt.
If the information cannot be verified by the educational institution, we contact the applicant to obtain a copy of the diploma or certification and attempts to have the institution verify the validity of the document. In instances where the education cannot be verified or where there is suspicion that the school is a diploma mill, we close the request as “Unable to Verify,” documents its investigation, and flags the search to notify the client that there is a discrepancy. Third-party services, such as the National Student Clearinghouse, may be required to complete verifications, and any resulting access will be passed down to the customer.
Personal and Professional Reference Verifications
Personal/Professional references are contacted to gather additional information about an applicant concerning competence and fitness for the job in question. Personal references can help determine the true qualifications of an applicant for a job by comparing how the traits identified relate to the job opening. When GHRR’s Verification Department receives the client’s order, GHRR will contact the individual listed by the applicant as the personal or professional reference.
Professional Licensure Verifications
Finally, GHRR verifies professional license statuses with various state licensing boards. Information verified may include license numbers, dates obtained, expiration dates, current standing, disciplinary actions, etc.
This publication is provided only for educational purposes; it should not be relied upon as legal advice, and it should not be used, in whole or in part, as a basis for establishing employment practices or policies, nor should it be used for resolving disputes or managing risk. Every reader’s circumstances are unique and legal advice should be obtained only from a lawyer with whom the reader has established an attorney-client relationship. Copyright 2021 © Global HR Research. All material contained within this publication is protected by copyright law and may not be reproduced without the express written consent of GHRR.