Before making important personnel decisions, be it hiring, promotion, retention, or reassignment, most employers prefer background tests on potential candidates and employees. Basic checks include the candidate’s work history, financial history, criminal record, medical history, and social media use. However, while these checks are necessary, are they legal?
Except for specific restrictions relating to genetic and medical information, it is not illegal for employers to ask questions about a candidate’s or employee’s background. However, employers should comply with various federal and state laws that protect employees and applicants from discrimination when using this information. Outlined below are important things to know about the legality of employee background checks.
Which Background Check Laws Apply?
While federal laws apply equally to all businesses, state laws greatly vary. If you have multiple businesses across different states, knowing which laws apply to which business can be confusing. Below are important state and federal laws guiding background checks;
- The Fair Credit Recording Act – While the FCRRA doesn’t prohibit employers from conducting background checks on potential applicants, it provides crucial steps that employers should follow before and after conducting background checks. For instance, the employer should notify the candidates, provide candidates with a copy of the background check report, and more. Employers who don’t follow these guidelines are vulnerable to FCRA lawsuits.
- The Equal Employment Opportunity Commission – The EEOC also outlines guidelines that protect job applicants from discrimination. For starters, employers should treat all candidates with fairness. Background checks for all candidates eying the same job should also be the same.
- Prohibition on credit history checks – Initially, employers could freely check potential candidates’ credit history to evaluate financial responsibility and chances of committing fraud. However, several states, including California, Washington, and Illinois, have made laws limiting or banning reliance on credit history reports before employment.
That said, below are the legality status of various background checks.
- Online information – Employers can legally conduct online, and social media searches for potential employees. If this information is readily available publicly, businesses and potential employers can find it. However, some states have laws that protect employees’ privacy on social platforms.
- Medical records – Medical checks are illegal unless the candidate’s or employees’ medical history directly impacts the candidate’s ability to work, such as before joining the military. The ADA also limits medical history that employers can gather during background checks or interviews.
- Drug testing – Testing for drug and substance abuse is legal in some states; check out Brick drug testing in NJ as an example. Drug tests are critical in some industries, such as nuclear energy or manufacturing plants. However, employers should provide proof that drug use is a crucial safety concern before ordering employee testing.
- Salary checks – Candidates are not obligated to inform new employers about their previous salaries in some states. Salary checks should be avoided to promote pay equity.
- Protected information – It is illegal to inquire about potential candidates’ protected information, such as race, age, sex, color, national origin, pregnancy, marital status, and religion. These laws are listed under the Title VII of the Civil Rights Act.
Employers should comply with federal and state laws before conducting background checks on employees and new hires using TruthFinder. Note that the legality and illegality of these laws are subject to change according to new legislation.