But what information are you allowed to have?
The need for good employees is something that small business owners recognize, but finding them can be difficult. Large corporations have entire departments devoted to ensuring that all information on a resume or application is correct, but small businesses don’t have that capacity. They are also less able to absorb the risks that come with hiring poor employees.
As awareness of the number of people that stretch the truth or outright lie on a resume grows and business are more dedicated to getting quality employees, small business owners need to find ways of getting the necessary information without violating an employees right to privacy. A certified background check can provide all the necessary information, but there are specific limitations on how the information can be used, and which information a prospective employer is allowed to consider as part of a hiring decision.
In most instances, certified background checks fall under the same heading as a credit report. If an employer requests a copy of the prospective employee’s credit report they must be in compliance with the Federal Fair Credit Reporting Act (FCRA). There are two types of reports specifically mentioned as part of the FCRA, consumer report and investigative consumer report. A consumer report is defined as a communication that provides information on a person’s “credit standing, credit capacity, character, general reputation, personal characteristics, or mode of living.” Investigative consumer reports are considered part of a consumer report. When a certified background check is performed for an employment related reason, hiring, promotion, retention or any other assignment decision, there are regulations about the type of information that can be used and the method used to obtain it. Health information is highly restricted for example, and can only be used to make an employment decision if it directly impacts the vacancy.
Many people confuse the scope of the FCRA and fail to realize that it covers all of the above types of information. A certified background check, regardless of whether a credit check is performed, falls under the FCRA as a consumer report. Large corporations avoid FCRA regulations in some states by performing all certified background checks internally. The FCRA specifically refers to third party company reports.
However, it is a good idea to hire a reputable third party company to perform your certified background checks. When a reputable company performs the checks, they are responsible for verifying all information shown. Internet resources are not always accurate, and working with a third-party company can give the small business owner peace of mind.