Background Screening Dangers

Jill Gengler, Vice President of Business Development, AccuSearch, Inc.

All successful enterprises understand the importance of maintaining sound working relationships with their vendors and service providers.  But when it comes to the company that handles your background screening, there are legal and regulatory factors that must also be understood and taken into consideration.  Consumer reports, such as those that provide informational data during the pre-screening process, fall under the Federal Credit Reporting Act; in order for your organization to protect itself and ensure that you and your vendor are in compliance with the Act’s rules and regulations, it is wise to consider the following points: 

• Completion of a job application form does not automatically give an employer a background screening authorization.

By law, an employer cannot conduct a background screen on a job applicant unless and until they have received a signed background screen authorization form from the applicant.  Your vendor should provide you with a template to use as your background screen authorization form that identifies them as the vendor, a FCRA Disclosure Notification, and instructions for the applicant should they want a copy of their background screen report or end up wanting to object to any of the report’s content. 

• If an applicant is rejected by your organization because of information in their background screen take advantage of your vendor’s Adverse Action notification service.
• The FCRA requires employers retain copies of signed authorization forms for no less than two (2) years. To assist customers, most vendors will provide you with a method of attaching signed authorization forms directly to the applicant’s profile within their online ordering and reporting system for storage and retrieval purposes.  If your vendor or your organization is audited by the Federal Trade Commission, they may ask for copies of applicant signed forms and there may be significant consequences for not having the forms on file.
• Once the screening is complete, it is not your responsibility to assist an applicant if they claim there are errors in their report.
• It is your responsibility to notify an applicant if your organization decides not to hire the applicant because of Adverse Information discovered within their background screen report.  A competent vendor will provide you with an Adverse Action Letter Template which you can print on your letterhead and provide to the applicant along with a copy of their background screen report.  Alternatively, many vendors will provide Adverse Action Letters and report mailing as a service on your behalf for a very small fee.

When Selecting A Vendor 

Your best insurance against adverse legal and regulatory issues is contracting with a reputable service provider who is current with, understands and complies with the Act. There are thousands of screening vendors across the country ranging from small to very large. Most are members of the National Association of Professional Background Screeners – ensure you select a member in good standing by checking their status on www.napbs.com.  Ensure your vendor is licensed and bonded and can respond satisfactorily to the following questions: 

1.   How do you ensure your company is compliant with individual state employment laws and adheres to Federal FCRA requirements?

A competent vendor should be able to demonstrate that they regularly monitor and proactively advise customers of changes to hiring laws; that their team members all have their FCRA certification; and be able to provide you with a detailed overview of their quality assurance procedures. 

2.   How do you protect my data?

Your vendor should provide you with technical and business process descriptions of the security protocols for the secure online system (https://) you will be using to order and review background reports and should have a policy in place that requires regularly scheduled password changes for Users. Your agreement with and training from your vendor should include specifications which cover Fair and Accurate Credit Transactions Act (FACTA) Disposal Rules in regard to your having appropriate measures in place to dispose of sensitive information derived from consumer reports. 

3.   Can you provide a service for any applicant who wants to obtain a copy of their complete background report and how will you respond if the applicant insists that the records are incorrect?

One in ten criminal background checks will generate a ‘hit’ and a reputable company will have an automated process in place to handle these outcomes, and can instruct applicants who wish to dispute their record. When this happens, the background screening company must react quickly and re-investigate to make sure that correct information has been reported.  The applicant has the right to work directly with the background screening company – not you – without cost to you or the applicant.    

Drug Testing Programs 

Although the federal 1988 Drug Free Workplace Act requires that those organizations that facilitate annual federal contracts in excess of $100,000 “make appropriate efforts to maintain a drug-free workplace,” this requirement does not make employee drug testing mandatory. And while any employer can implement a drug screening program which can include traditional urinalysis and or instant drug testing – it must be administered fairly, consistently and be in accordance with federal and your specific state laws.  Note that instant drug screening is not permissible in all states, and in those where it is permissible any positive result must be confirmed by a lab. In addition some states (among them, Iowa, Montana and Rhode Island) have restrictions on random drug testing.  Your vendor should be able to advise you on these where required. 

Should you decide to implement a drug screening program there are a couple of things to have on your checklist: 

1.   Draft and distribute an Employee Guide to all employees containing details of the company’s new drug screening program. Be sure that your drug screening program takes into consideration federal, state and local laws in regard to pre-employment, for-cause and/or on-going random drug testing. Have every employee sign an acknowledgement receipt of the new program information. HR should file the signed receipts or digitize and store the signed receipts for future reference if ever necessary. 

2.   Provide every employee (and include within the on-boarding process of new hires) an “evergreen” Drug Screen Request and Release Form which must be completed, signed and returned to HR. An evergreen Request and Release Form gives the company the right at any time to order a drug screen on an employee/new hire and also permits the company to re-run drug screens if an employee is being considered for a pay increase or new job role, without having to obtain a new Form each time a screen is to be conducted. Again, the program must be based upon your specific state laws. HR should file the signed R&R Forms or digitize and store the signed forms for future reference if ever necessary. 

3.   Ensure that HR conducts drug testing consistently across all job roles and employee levels to avoid any claims of unfair hiring or employment practices.  

Attention to the foregoing information and recommendations and their inclusion in the vendor selection process will go a long way to ensuring that your selected vendor will both provide satisfactory screening services, and work with you to remain fully in compliance with the services’ underlying rules and regulations. 

This information is not intended to constitute legal advice and should not be relied upon in lieu of consultation with your organization’s appropriate legal advisors.

Posted by Jill Gengler on June 14, 2010. Filed under Legal/Compliance, Thought Leadership. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry