As we acknowledge the anniversary of September 11th, 2001 I think we can all agree that the world has substantially changed. For employers, we have seen an increase in the use of background checks in the hiring process. As an outcome an increase in the perceived abuse of background checks occurred, resulting in a push-back on the part of governments. We have also seen changes in how workers view what they perceive as “intrusions” into their personal backgrounds. Let’s explore these changes in the almost two decades since 2001.
Greater use of background screening
According to SHRM, in the year 2000 only 50% of employers used the background checking process. It was considered a luxury by employers at that point. It was also an arduous, paper driven process that slowed down the hiring process. Then the terrorists attacks happened on September 11, 2001, and employers became more careful about who they hired. By 2010, the number of employers using background checks had increased to 76% of companies doing background checks, and 73% doing criminal checks. More recent research I conducted reveals that 95% of employers now use some aspect of the background checking process.
Prior to 2000, there was no national trade association, industry standards, or definitive publications on background screening. That has changed today as there is the National Association of Professional Background Screeners and an accreditation process.
Originally passed in 1970, the Fair Credit Reporting Act (FCRA), was originally intended to protect people in the process of having their credit reviewed by businesses. It was extended to the process of background checks under the coverage of Consumer Reporting. Today background checks are covered by both the Federal Trade Commission and the Equal Employment Opportunity Commission (EEOC). It is important to pay attention to the notification requirements of the FCRA if you are going to take action against a prospective employee, but the EEOC changed their position on using information, as I wrote in EEOC Issues New Restrictions On the Use of Background Checks. In the EEOC documents they said:
There are two ways in which an employer’s use of criminal history information may violate Title VII (“disparate treatment discrimination”). First, Title VII prohibits employers from treating job applicants with the same criminal records differently because of their race, color, religion, sex, or national origin.
Second, even where employers apply criminal record exclusions uniformly, the exclusions may still operate to disproportionately and unjustifiably exclude people of a particular race or national origin (“disparate impact discrimination”). If the employer does not show that such an exclusion is “job related and consistent with business necessity” for the position in question, the exclusion is unlawful under Title VII.
In addition to the EEOC provision on the use of criminal background checks, many states and municipalities have instituted “Ban the Box” legislation that prohibits even asking an applicant about any criminal conviction in their background, as I discussed in Should Employers “Ban the Box”?
There are a number of other trends that are occurring in the background checking business. One of the areas that many employers wanted information on in a background check has been salary history. Because of the current move to strive toward salary equality, there have been many jurisdictions on the state and local level to eliminate using someone’s salary history in the hiring process.
Rather than just checking backgrounds at the new hire stage, many companies are starting to institute periodic background checks at milestone dates or events in an employee’s tenure. As with any background check, permission must be granted by the employee.
The rise of contingent workers
As the nature of the world of work has changed to include many more contingent workers, such as part-timers, temporary workers, or even so-called “gig” workers, some companies are opting not to engage in the background process. I have come across companies making just such a decision, against my counsel. “Bad” people can come into your companies through any number of ways, and using the background check can prevent loss wherever it may come from.
Increased speed and reduced costs
One major change that has taken place since 2001 is that the technology used has increased substantially, and the speed of response on requests has dramatically been reduced, so response-time no longer stands in the way of making a hiring decision. Prices will vary and response-time may be dependent on the agency with whom the provider is checking, but generally today background screening providers are fast and dependable and well worth the peace of mind the employer gets about its new employee.
Despite the fact that you can use the Internet to try to find information on an employee or prospect, there are many potential liabilities to this approach. Think about all the problems with “truth” on the Internet and you will find you are better off using a professional service who can guide you through the in-and-outs of dealing with a multitude of legal landmines. Verified First is just that background screening firm to contact.
This blog was written by Mike Haberman of Omega HR Solutions in agreement with Verified First. For more information on background screening and compliance, reach out to Verified First.