What Constitutes a Legal Background Check & Is it Necessary?
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[fa icon="calendar"] Oct 15, 2020 7:30:00 AM / by Michelle Nystrom

Michelle Nystrom

Is Conducting A Legal Background Check On Employees Necessary? 

double exposure of businessman or salesman handing over a contract on wooden desk-1Is it essential to run a legal background check on your employees before you hire them? Specific industries make background checks necessary. These industries include those that involve handling money, coming into contact with people, entering customer's homes, or dealing with sensitive information. Every business can benefit from conducting at least a minimal background check on possible employees when it is legally necessary.

What Is A Background Check?

A background check is merely finding out any information from a person's past that may have an impact on their ability to perform the job for which they apply. You can find a great deal of information on a full background check including, but not limited to:

  • driving records 

  • credit records

  • criminal records

  • social security number

  • education history

  • employment history

  • work history

The information can give you an idea of what kind of person the applicant is. This information is necessary for understanding their work habits, determining if they will fit with the company culture, and whether or not employing the person is a smart move for your company.

Is A Background Check Necessary?

There are three primary reasons behind background checks: to determine public safety, to protect you and your company from liability issues, and to prevent the loss of business. Let's look at some examples.

Public safety is one of the biggest reasons for conducting background checks. Childcare and elderly care are two areas that immediately come to mind. Any business that deals with the public will need to know if a candidate has a history of violence or is a known thief who may steal from a client, among other things.

When you have an employee who commits a crime, you will need answers. As the one who made the hiring decision, you must know if they have previously been violent or done something resembling the nature of the current issue. Should a record of such misconduct exist, you can face being sued by the victim. The courts would likely find you guilty of, at the very least, making a negligent hire because the information was readily available, and you either did not check for it, or you checked but hired the employee anyway.

Social media is something that reveals a lot about a person. Today, with all the civil unrest, checking on things like personal beliefs is essential. Should it become clear that one of your employees is firmly against a particular race or is mean-spirited and unaccepting of the LGBTQ+ community, you could find yourself boycotted by these groups. Avoiding the controversy could be necessary to keep your clients.

Information You Can Acquire Legally

People deserve a certain measure of privacy. The law allows you to find information that is pertinent to the job for which you are hiring. You are also legally authorized to use any information that is in the public eye, such as social media accounts because they are not protected if posted on a public forum. The knowledge you can acquire legally can be extensive.

Online Information

Online information is readily available. A background check might include such things as personal websites and social media accounts. You can do a search of these on your own, but having someone else do it saves you time and makes sure you don't miss any. Perusing this online information can tell you a lot about a person's beliefs and general activity.

Employment Eligibility Verification

People can claim to have worked anywhere. People can also claim they have any degree or certification. A background check will allow an employer to verify this information. This information is critical in fields that require licensing or accreditation.

Credit Report (with Limits) 

Credit report information is limited and varies by state. In most cases, you can only obtain an overall credit score. Credit reports aren't generally conducted unless the person is to work directly with a significant amount of money, such as in a bank or as a controller or bookkeeper within a company. 

Criminal Records (depends on the state)

Criminal records offer different amounts of information depending on the state in question. In many cases, the information given will only be whether or not a person has a record that would prevent them from working in the position for which they apply. For example, an individual with a history of fraud or misuse of company funds might not be your best choice in a bank or as a bookkeeper. Another example would be a person who had done time for assault with a deadly weapon would not be considered suitable in a position working directly with the public. You will also be notified of anyone on the sexual abuse registry if contact with children would be involved.

Information You Can’t Use Against Employees 

There are certain pieces of information that an employer is not allowed to use when determining who to hire for a position. A decision based on any of the following could lead to a lawsuit if proven.  

  • Race/Color - The only case where a decision based on skin color is allowable is for a movie or stage play, and the original script already calls for a specific look.

  • National Origin - Some educational qualifications are allowed to be tested in cases where certification or licensing is in question, but an overall decision based only on national origin is forbidden.

  • Sexual Orientation - Sexual orientation is not to be a reason for exclusion from hiring. 

  • Religion - You are not even allowed to ask for a person's faith, as it is considered a non-factor in regards to being able to perform a job. If a job directly involves an act that may be forbidden by religion, such as abortion, you may ask whether the individual feels comfortable participating in that act. Still, it is unlikely that a person will apply for a position they do not feel fits with spiritual affiliation.

  • Disability - You can't deny someone employment based upon a disability. If you are concerned about the disability interfering with the job that needs performing, you may ask what kind of accommodations the person will require to perform their duties. You would then need to decide if the company can reasonably accommodate their disability.

  • Gender - This is never considered an appropriate reason for not hiring someone. This also includes cases where a transgender individual is applying. 

  • Age - Age is only allowed to be a factor in hiring if the individual in question is under the legal working age.

What To Do Before Performing A Background Check?

There are a few things you should do before performing a background check. This act is one of the first places where transparency begins between an employer and a candidate. These steps are also crucial in complying with the legal requirements of doing a background check.

Notify The Employee 

Giving the potential or hired employee written notification of your intent to conduct a background check is necessary. Include what information you are looking into and make it clear what the results will be under certain conditions, such as a failed drug test. The employee must sign the document allowing you to conduct this search.

Provide A Copy Of The Report 

Provide a copy of the background check to the employee. Some people will say they don't need a copy but provide one anyway. Sometimes these reports will include inaccurate information, and the person has the right to contest that information. Other times, the report may contain information that the candidate can explain sufficiently to prevent skipping over the candidate. You owe both yourself and the prospective employee that opportunity.

Check Your State’s Policy 

Each state has its policies regarding what information you can obtain and when you can obtain it. You must check into the particular rules within your state to make sure you are following legal guidelines in your search.

California Requirements

California has specific guidelines that employers need to be aware of before proceeding. In California, you are no longer allowed to ask a candidate about criminal convictions until after a job offer has been made. After a job offer has been made, you can only run a background or credit check if it applies to the specific position and job duties.

  1. Financial information is only pertinent in certain professions. These include financial institutions and the like. Need to know also pertains to a person's credit report. Asking for financial information when it is not necessary for understanding the employee's relationship to money is illegal.

  2. There is a 7-year statute in place regarding criminal records, including felonies. This seven-year limit includes convictions, probation, and parole. Once that period has passed, the information is no longer considered relevant. As with the financial information, you will need to provide an adequate reason for requiring this information.

  3. Certain legal information is not considered open for disclosure. Any arrests that did not lead to conviction are off-limits. Any sealed records also can't be disclosed. If a case is pending, however, that information can be obtained. 

  4. You may ask past employers information about a person's general character and work ethic, but asking for the exact reason they are no longer there is against the law. 

As with anything dealing with the law, it is crucial to check on current restrictions if you have not gone through a background check procedure lately. Requirements are continually updated.

What To Do With The Obtained Record?

Once you have obtained the necessary information from the background check, there is no need to keep it. The search results should never go into the employee's file. Destroy the report in the same manner as you do other sensitive information. The information on the background check should not be made public knowledge to anyone other than the ones responsible for making hiring decisions and the applicant.

Always Abide By The Laws And Restrictions

Obtaining a background check on a potential employee can help you make the important decision of hiring. You should always make sure you follow legal restrictions completely to avoid problems. Also, keep in mind that the background check is only one piece of the picture. People do change. People go through shaky periods financially. Basing your decision solely on a background check is unfair to both your potential employee and your company. Use the information as one of many tools, but don't rely exclusively on what you find.


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This blog post is intended for informational purposes only and does not constitute legal advice.  No attorney-client relationship is created between the author and reader of this blog post, and its content should not be relied upon as legal advice.  Readers are urged to consult legal counsel when seeking legal advice.

Topics: background check