Background Checks and Remote Employees
Background check laws are not one size fits all. What’s acceptable in one state might not work in another. What’s allowed in one city might land you in court if that employee lives 20 miles down the interstate. That’s why background checks should be on every company’s radar, especially with class actions involving improper background checks creating millions of dollars of liability for companies.
If you hire employees who will work remotely, you’re giving them access to a company computer and your network. If you’re doing that, you’re probably putting your remote employees in a position where they can skim bank records, credit cards, social security numbers, medical information, and all kinds of other personally identifiable information (PII) your company must keep safe. Because of this, you likely need some sort of background check.
When it comes to background checks, the first law you should keep in mind is the Fair Credit Reporting Act (FCRA). Violations of the FCRA are an all too common source of class action liability. Before your company runs a background check on an applicant, you must, among other things, disclose to the applicant that your company may obtain a background check or consumer credit report for employment purposes and get the employee’s written permission to do so. The notice and consent must be carefully written to comply with the law.
If the background report shows something that may cause you not to hire the applicant, you must notify the employee of the results. When you do, you must provide the employee with a copy of the report and give the applicant enough time to review and challenge it if anything needs to be corrected. This helps make sure that employees are not mistaken for someone else with a criminal record. Finally, if you decide not to hire the person based in part on what’s included in a background check, you have to provide proper notice.
The process and notices, which are even more elaborate than I have described here, can be overwhelming. Because of that, your company may be well-served by outsourcing background checks to avoid some of the headaches. If you take this route, check the contract language with the vendor coordinating background checks. You’ll want to confirm the company will cover FCRA claims. Better to have another company foot the bill for FCRA violations than your own.
Another issue you should remember in the context of background checks is ban-the-box legislation. Ban the box laws limit when employers can look into criminal history or conduct a background check. Some cities and states have these laws in place. For instance, if you decide not to hire someone from California because of what shows up in the background check, you better be cautious about following the strict process mandated by California law regarding timing and notification.
You’ll probably never be able to keep track of every law in every jurisdiction impacting background checks. But do your best to make a good faith effort, outsource these background checks where possible, and if you outsource your background checks, look over your contract with the company doing the background checks to make sure it will cover your legal costs if things go wrong.
Finally, if you decide not to hire based on what you find in a background check, pause, take a look at the applicable federal, state, and local law, and make sure you’re on a solid legal footing. California is not the only place you’ll run into trouble. You cannot know every nuance of the law off the top of your head. So know when to slow down, take an extra careful look, and talk with an attorney. This will save you a lot of heartache in the long run.
