Respecting Privacy While Obtaining Necessary Info

Hiring outside vendors to conduct pre-employment background checks into any criminal record, bad credit history and/or other matters is a common tool for an employer’s informed hiring decisions.

Federal and California laws cover the procedures for such checks, designed to balance a company’s right to research and obtain relevant information about job applicants and applicants’ rights of privacy on information unrelated to a hiring decision.  By applying for work, a person in effect consents to some degree of scrutiny.   The required forms and written notices are to make sure the process is fair. Among key points:

1. Conduct background checks even-handedly – While it is usually not sensible to have to run checks on every single applicant off the street, an employer should establish a definite point in the process at which any and all applicants would be checked.  It is up to the employer to set that point and to make it known, perhaps checking on those in the final group of candidates or only on the person tentatively chosen for the job.  Arbitrarily deciding who should be checked and when unnecessarily exposes the company to possible discrimination allegations;
2. Notify candidates of background checks in advance – Under the federal and California laws, an employer must let a candidate know ahead of time if the company is going to conduct a check.  An employer must also provide the candidate a written summary of the applicable procedures, including the prospect’s right to see the resulting report and to challenge any aspect of the report he/she contends are inaccurate.  The California law requires an employer to supply a candidate a form with “yes” and “no” boxes on whether that prospect chooses to obtain a copy of the report; and
3. Understand the limitations of background checks – It is important to be able identify personal information not considered relevant to the hiring process and thus protected from disclosure.  (For a related topic, see “Pre-Employment Testing: Inquiries are Limited to Job-Related Skills and Qualities”)

The legally required procedures, notifications and forms only apply when a company utilizes an outside vendor in the business of conducting such checks.  Most reputable vendors are able to supply the necessary forms and notifications although it is the employer’s ultimate responsibility to ensure compliance.

Thus, an employer’s direct check of a candidate’s references is not covered by these laws. However, it is a good idea to include on a company’s standard job application a statement that the applicant should expect the employer to contact references to obtain job-related information.

For more extensive discussion, see Pre-Employment Background Checks, Bowles Law Report, Vol. 9, Issue 3

For a business to determine or confirm whether its particular use of pre-employment background checks and other hiring practices are in compliance, management should utilize an experienced labor law attorney for the applicable state jurisdiction.