There are certain federal laws in place that protect employees and job applicants from discrimination. They prohibit discrimination based on disability, religion, gender, national origin, color, race, age (40 or older), and genetic information (includes family medical history). The Equal Employment Opportunity Commission (EEOC) enforces these laws and ensures that employers comply with the EEOC.
When employers make personnel decisions such as reassignment, promotion, or hiring, they often conduct background checks on the employee or applicant. In most cases, an employer or prospective employer can legally ask questions about a person’s background including their employment history, education, credit or financial information, criminal data, and even use of social media. They may require a background check as one of the terms of employment or promotion.
Employers who conduct background checks using any company that compiles background data as a business is required to comply with the Fair Credit Reporting Act (FCRA). The FCRA is enforced by the Federal Trade Commission (FTC). Any employer who conducts a background check on an employee or applicant must do so within the limits of these laws.
Key areas of EEOC and FCRA compliance include:
- Equality – Employers must always ensure that they are treating all applicants or employees equally. It is illegal to conduct a background check only on applicants or employees who are of a specific race, gender, disability, or other specifications. The same process must be uniform across all applicants or employees. For more EEOC information, visit the website www.eeoc.gov.
- Before initiating a Background Check – Employers are bound to laws under the FCRA to:
- Inform the applicant or employee that the data may be used to make a decision about their employment
- Inform the applicant or employee of their right to obtain a description of the scope and nature of an investigation when an investigative report is requested
- Obtain the applicant’s or employee’s authorization in writing to allow the background check to be conducted
- Provide to the company conducting the background check that the applicant/employee has been notified, the request is in compliance with all FCRA requirements, and no discrimination has taken place or will take place (or other types of inappropriate use of the data)
- Disability Related Problem in Background Check – If the applicant or employee has a problem in their background check report that is related to a disability the employer should make exceptions if the person can adequately demonstrate their ability to do the job. Failure to do so could result in discrimination claims. There are also certain provisions for individuals who have a criminal report.
- When adverse action is taken – When an applicant is not hired or an employee is terminated due to information obtained in their background check, the employer must inform them in writing of the information in the report led to their rejection/termination. Information on the company that created the report, including name, address, and phone number must also be given to the individual. Additionally, they must be advised that the company that generated the report did not make the decision and that they have the right to dispute the completeness or accuracy of the report.
Regardless of the decision, employers must retain the all employment or personnel records, even applicants who were not hired, as well as background checks and other application related material for a minimum of one year after the personnel action was taken or the records were created, whichever is later. The retention timeframe is two years for local and state governments, educational institutions, and federal contractors with 150 or more employees and a government contract that is $150,000 or greater. In the event of a discrimination lawsuit, the employer is required to maintain all records pertaining to the individual until the case is completed and closed.