Employment background checks are being conducted by employers more frequently than in the past. That's for several reasons. The increase in electronic data privacy requirements necessitates employers being more diligent when hiring workers who are accessing and managing personal data.
In addition, companies are concerned about negligent hiring lawsuits where employers can be held responsible for injuries caused by an employee, if they did not check the employee's background and suitability for the position.
Employers are also concerned about hiring responsible employees. Your credit history is important to employers because it an indication of how responsible you are. On a related note, while poor credit history may be considered when hiring, a decision not to hire cannot be based solely on whether you filed for bankruptcy.
Employment Background Check Law
If employers conduct a check of your background (credit, criminal, past employer) using a third party, the background check is covered by The Fair Credit Reporting Act (FCRA). The FCRA defines a background check as a consumer report. Before an employer can get a consumer report for employment purposes, they must notify you in writing and get your written consent. If the employer is simply conducting inquiries (rather than running reports) they should also ask for your consent.
What Employers Can Check
When conducting an employment background check, employers can check your credit, your criminal record (what can be checked varies from state to state), your work history, and your driving record. When you complete an employment application form, it should give you an idea of what's being checked.
From a work history perspective, keep in mind that when you sign the application you are giving the company permission to check your background. You are also giving your previous or current employer your consent to release the information. If you include references on the application, you can expect them to be contacted as well.
If you're not truthful on your application, it can disqualify you from employment and you could be terminated in the future - not necessarily because of what was found, but because you were dishonest when you applied.
The Best Strategies for Job Seekers
Zachary Hummel, Partner in the New York office of Bryan Cave LLP who represents employers in all aspects of labor and employment law, shares his perspective on the best strategies for job seekers when it comes to employment applications and background checks:
- Know your rights. Be a knowledgeable applicant. Visit your State Department of Labor web site and review what an employer can check.
- Get a credit report.Get a copy of your credit report, so you are aware of what's on it. If there are issues, try to clean it up or dispute it if there are errors.
- Read the job application. Read the application carefully, so you are informed as to what will be checked.
- Disclose only what is asked. Only disclose the information you need to, based on the employment application.
- Be honest. If you're asked about credit or your criminal record and have issues, explain the circumstances. The employer will value an explanation upfront, rather than discovering that there is a problem when they get your report.
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