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Is That Legal? Dos and Don'ts for Employee Background Checks

Is That Legal? Dos and Don'ts for Employee Background Checks
Credit: RawPixel/Shutterstock

With all the information available online – some of it public and the rest easily accessible for a fee – the process of looking into an employee's background can be confusing for both businesses and workers.

Are social media profiles fair game? What about credit reports? Can a business require drug testing before making a hiring decision?

It depends, Tricia Meyer, the founder and managing attorney at Meyer Law, told Business News Daily.

"Pre-employment checks may consider information such as drug testing, court records, credit records, character references, driving records, education records, etc.," said Meyer. Businesses may periodically check on this information for current employees as well.

The information that is legal for employers to access, however, depends on a number of factors, including the industry, whether the business is in the public or private sector, and what state the business is located in. Here's what you need to know about the legality of certain elements of vetting an employee's background.

Before receiving or using a background report, such as a criminal background check, an employer must follow several procedures outlined by the United States Equal Employment Opportunity Commission.

  • The employee must be notified in a written, stand-alone document (not part of an employment application) that the background check is being conducted and may impact their eligibility for employment.
  • The employee must provide written consent to the background check.
  • If ongoing background checks are a condition of employment, a business must say so explicitly in its written policies.
  • If any personal interviews are conducted to learn about an employee's reputation, lifestyle or character, the employee has a right – and must be notified of that right – to a description of the nature and extent of these interviews.

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Between social media and online search, employers can access a great deal of information about potential or current employees without needing to employ a traditional background check. If information is publicly available online or easily found with a search engine, employees should expect that businesses can and will find it.

However, many states have rules in place to protect employees' privacy on social media sites.

"Employers are no longer allowed to request an employee's login information for social media accounts," Meyer said, adding that trying to bypass privacy settings is also not allowed. In the past, employers would often try to view accounts by creating a fake profile themselves or asking the social media company for access. "If a candidate has an account set to private, it's important that the employer doesn't try to bypass privacy rights."

Under the Fair Credit Reporting Act, an employer must obtain written consent before requesting a worker's credit report. Because the FCRA is a federal law, consent is required in all 50 states. Some states, including Illinois, California and Colorado, place limits on whether an employer can access credit information. There are also some industries with exemptions, such as the trucking industry.

The FCRA requires that employees be informed if their files are used against them. If a business refuses to offer employment based on a credit report, it must give that reason explicitly, along with the name, phone number and address of the credit reporting bureau that provided the information

Some employers are legally required to test for drugs, though most are not. Industries where drug testing is a condition of employment may include manufacturing and nuclear energy. Most public sector jobs also require drug testing. Some states limit drug testing to industries where it is required by law, while others require businesses to prove that drug use is a legitimate safety concern before requiring employee testing.

"Drug testing is typically up to the discretion of the employer and may be part of a comprehensive background check," said Meyer.

Potential employees do have the right to refuse a drug test as part of a background check. Depending on state laws, however, they can be denied employment for that refusal. Current employees can also refuse drug tests, but they can be fired for that refusal if drug testing requirements are spelled out in the employer's written policies.

In order to be valid in court, drug testing policies must be written down, accessible to employees, and applied equally and consistently to all current or potential workers.

Many state laws limit whether an employer can check previous salary. This is to improve pay equity. If an employer asks about previous salary – which is currently or soon will be illegal in New York City, New Orleans, Philadelphia and all of Massachusetts – a potential employee is not obligated to reply.

Under Title VII of the Civil Rights Act, certain protected information is always illegal for an employer to consider when making the decision to hire or fire an employee.

Protected information includes age, race, ethnicity, color, sex, religion, national origin, disability, marital status and pregnancy. It is illegal for an employer to ask about these characteristics during a background check, interview or performance review.

It is possible for a business to accidentally find out about protected characteristics during other parts of a background check, but it is always illegal for this information to influence any employment decisions.

Though federal laws apply to all businesses in the United States, what is legal can vary greatly between states. If you are involved in employee background checks, either as an employer or a worker, consult a legal professional to understand the rules and regulations that apply in your situation.

Katharine Paljug

Katharine Paljug is a freelance content creator and editor who writes for and about small businesses. In addition to Business News Daily, her articles can be found on Your Care Everywhere, She Knows, and YFS Magazine. Visit her website to access her free library of resources for small business owners, or follow her on Twitter as @kpaljug.