4 Common Background Check Restrictions to Watch for When Placing Contractors

When it comes to background check compliance, the Fair Credit Reporting Act (FCRA) gets most of the attention. However, there is more than just federal law to consider. More and more states and localities are creating their own criminal background checks laws that you must make sure are followed when checks are run on your contractors. Even if you outsource this task to a third party background screening service or a contract staffing back-office, you still want to be sure your contractor background checks are being handled properly.

Here are some common restrictions that are applied at the state and local levels:

  • Ban the Box – Do you ask about contract candidates' criminal history on your application? If so, you will want to check for any Ban the Box legislation where you are placing contractors. These laws make it illegal for employers to ask applicants about criminal records. Some laws only apply to public employers. Others include private businesses. They also have different rules about when in the process you CAN ask the question. Remember that even if you are not bound by a specific law with regards to this issue, it is generally considered best practice to wait until a contingent job offer has been made.
  • Arrest records – Just because someone has been arrested in suspicion of a crime doesn't mean they will be convicted. Therefore, a number of areas restrict or prohibit the use of arrest records to make employment decisions.
  • Length of Time – You may also be restricted in how far back you can look. The Fair Credit Reporting Act (FCRA), already prohibits the use of many non-conviction records that are older than seven years old. Certain areas may also apply time limits to conviction records, but some laws waive this restriction if the salary will exceed a certain amount or if the person will be working in specific positions. For example, credit reporting agencies in California generally can't disclose records that are seven years old or older. However, older records CAN be used if the person is underwriting life insurance involving $250,000 or more. In Colorado, the 7-year restriction on records can be lifted if the person will be making $75,000 or more per year.
  • Taking adverse action - In some areas, you can't take adverse action based solely on a conviction. You must take other factors into account - relationship of the conviction to the specific position, how long it is has been since the candidate was convicted or released, whether or not they have been formally rehabilitated, etc.

This is not a comprehensive list but rather some of the most common examples. The point is to be sure to watch out for laws that may be stricter than federal law. Keep in mind also that even if two states have a similar law, the level of restrictions within those laws may vary. The Ban the Box laws in one state may allow you to ask about a candidate's criminal background after the first interview, but in another state, you may have to wait until you have made a job offer. You can see how complicated this can be. Using a background check screening service can make it easier, but be sure to choose a reputable one that stays up on the ever-changing laws. Also, be aware that these varying laws may cause delays in running background checks. You will want to make sure your clients know how long it could take. If they require that contractors clear a background check before they can start, this could impact the start date.

And as always, you want to be sure that the FCRA and the EEOC’s guidelines are always followed. By staying in compliance with ALL applicable laws, you can make sure that your contractor background checks protect your firm and clients rather than causing harm.

This general summary of law should not be used to solve individual problems since changes in fact situation may require a material variance as to the applicable law.  This article is for information purposes only and should not be construed as legal advice.

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