Complying With Background Check Laws While Screening Candidates

Two colleagues review an applicants background check on a mobile device

Complying with background check laws is critical to treating applicants fairly and minimizing legal risk. Here's how organizations can ensure they are compliant while performing this due diligence during the hiring process.

During the hiring process, candidates provide potential employers with extensive information about their background, qualifications, experience and suitability for the role. While most applicants provide accurate information, some may be less than forthcoming with the truth. To hire confidently and minimize legal risk, organizations should validate every applicant's information. Accordingly, background checks, drug tests and medical screening services can ensure that each candidate's application discloses correct, critical information.

While the hiring process can be resource-intensive, failing to screen candidates in compliance with relevant laws and regulations can exact a heavy toll in fines and penalties. Complying with background check laws makes good business sense. Proper compliance can also help minimize risk and ensure that your organization treats every application fairly — all while increasing the likelihood of hiring the right individual for the role.

Here's a brief overview of screening and background checks, their purpose and their legal implications.

Employment history and educational achievements

Since many employers focus on an individual's work experience to determine their suitability for a role, some candidates may falsify their employment history. Verifying an applicant's employment history — including how long they were employed, what titles they've held, what their responsibilities were and what their reasons for leaving were — is essential to selecting a suitably qualified candidate.

Similarly, an applicant might fabricate their educational achievements to appear more qualified. Some organizations ask candidates to submit academic transcripts, or may contact the schools and universities detailed in a candidate's application to verify their education.

Criminal history

Organizations can conduct criminal background checks on applicants to avoid negligent hiring claims. Additionally, some businesses perform criminal background checks for existing employees. To comply with the Equal Opportunity Commission's (EEOC) guidance and ensure the use of credible and defensible data sources, many organizations engage specialized firms to conduct criminal background checks.

Credit history

The way individuals manage their personal finances can indicate their suitability for a role with financial responsibilities. Organizations should develop clear and compelling reasons for focusing on an applicant's credit history during the application process.

Generally, credit checks should apply to roles that require interacting with an organization's funds or financial records, or with customer's funds or records. Keep in mind that the Fair Credit Reporting Act requires issuing an adverse action notice if an applicant is denied based on their credit history.

Driving record

It's critical to check the driving record of employees who would be required to operate a vehicle. In addition to detailing the status, class and validity of their license, a state driving record check can also reveal an individual's driving record, including any arrests and convictions.

Failure to scrutinize an individual's driving record can create significant legal risk in the event that they become involved in an accident while on company business.

Industry and role requirements

Certain industries and roles require organizations to conduct specific types of background checks. For example, jobs involving children, access to patient data or data related to national security require specific checks and a more rigorous analysis of candidates' backgrounds. State or federal law will apply, depending on the industry and type of check.

Your organization's legal counsel or an outside firm can provide guidance on how to comply with relevant background check laws. Furthermore, dedicated tools — such as My Policy Assistant, offered through ADP — can streamline the hiring process and ensure that your organization applies its policies consistently in screening candidates.

Some background checks are legally required, while others make good business sense to conduct. Nonetheless, the goal remains the same: to accurately assess an applicant and their background, and to verify the accuracy and integrity of the data they self-disclose.

Learn more

Get our guide: Maximizing recruitment results during and after labor market disruption