New Background Check Laws in 2024: Update for Employers

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As important as background checks are to ensure that companies are hiring the best talent, employers must make sure that they are conducting them in accordance with the relevant laws and regulations. Here’s what you need to know about new background check laws in 2023. 

Importance of Compliance with the Background Check Laws

Before we discuss the principal laws on background checks as well as the updates, let's first highlight why compliance is important. In general, conducting background screening per the rules and regulations helps:

Protect the candidates, existing employees, clients, company, and the public

The most important reason why compliance is crucial is because the laws are enacted to protect concerned parties. For example:

  • Data Privacy Acts are there to safeguard the applicant’s personal information. 
  • Conducting Credit History Checks for a company in the financial industry helps safeguard client and business finances. 
  • It may be mandatory to run a more comprehensive Criminal History Check if the role deals with children. 

Ensure you can use the information you gathered for decision-making

It’s essential to follow the laws because it allows you to use the information you gathered for hiring decisions. 

Let's say you operate your business in the United States and find out that an applicant had a breach of contract filed against them about 8 years ago. If the position they are applying for has a salary of less than $75,000, then your findings must not influence your decision to hire them because the law states that you cannot look beyond 7 years for civil judgments. 

Reduce risks

Finally, compliance with the old and new background check laws for the rest of 2023 and beyond mitigates the risks of running into legal consequences.  Note that some legal problems not only result in the payment of huge fines - they may also lead to jail time. 

New Background Check Laws in 2023 (Or in Recent Years)

Some countries do not have laws specifically made for background screening alone. However, they most likely have federal/national or state/local laws governing aspects related to it.  

Be sure to follow these principal laws relevant to background checks and see if there are updates:

Laws to Avoid Discrimination

Regardless of where your business is, there is most likely at least one law that protects people, including job applicants, from discrimination. Check, too, if there are new background check laws in 2023 or recent years concerning this. 

The Philippine Labor Code, for instance, already stipulates that “it shall be unlawful for any employer to discriminate against any woman employee with respect to terms and conditions of employment solely on account of her sex.” In 2022, House Bill 4479 seeks to amend this by adding “or characteristics of her sex, whether actual or presumed”

Data Privacy Acts 

Another law that’s closely tied to background screening protects applicant information. Laws surrounding data protection often differentiate between personal information and sensitive personal information, with the latter being subject to a higher level of protection. They also dictate how an entity should handle, store, and discard the information, and the consequences of not following the guidelines. 

The United Kingdom has the General Data Protection Regulation (GDPR). New background check laws in 2023 adopt updated regulations to ensure stronger enforcement of the GDPR in cross-border cases. The latest regulation set up stronger procedures for authorities when applying GDPR. 

Singapore has the Personal Data Protection Act (PDPA), and in 2022, some changes were made to this. One is the increase in penalties for organisations who have breached PDPA: "from the previously fixed S$ 1 million to 10% of the organisation’s annual turnover in Singapore, whichever is higher.” This is specifically for organisations with annual local turnover exceeding S$10 million. 

Australia has also passed Privacy Legislation Amendment (Enforcement and Other Measures) Act 2022. Among the updates included is increased fines for serious breach of privacy. 

Learn more about the updates on Philippine Data Privacy Act here

Right to Work Checks

Every employer is obliged to check if the person they are hiring has the legal right to work in the country and concerned industry. It pays to know if there are updates on the methods and consequences of non-compliance. 

For example, conducting a Right to Work Check is already mandatory in Australia.  Breaches result in fines, but in recent years, companies have also been wary of damage to their reputation. The Department of Home Affairs has been publishing non-compliant companies on a webpage since 2015 and the media can monitor it to break stories of non-compliance. 

Are you operating your business in the United Kingdom? Here’s what you need to know about UK Right to Work Checks

Laws on Criminal Checks 

It’s a common practice to check someone's criminal history before officially hiring them. If someone has a pattern of criminality and the employer believes it might put employees, clients, and the public at risk, then it’s in the best interest of everyone involved not to hire the applicant. 

However, many laws also recognise the need to give ex-offenders a chance to get the job they are qualified for. Hence, it's best to check if your country has enacted new background check laws in 2023 or recent years. 

The United States, for example, has the Fair Chance to Compete for Jobs Act in 2019. This is the federal-level Ban the Box Law where employers cannot inquire about arrests and convictions until after a conditional offer has been made. 

Learn more about the UK DBS Check 2023 Updates here

Drug Screen Laws

If you include drug testing in your background screening, you might want to check if there are new laws about it, too. 

In 2021, New Zealand passed the Drug and Substance Checking Legislation (No 2) Bill that amends Misuse of Drugs Act 1975, Psychoactive Substances Act 2013, and Medicines Act 1981. 

Generally, the aim of the bill is “to try to minimise drug and substance harm by allowing drug and substance checking services to operate legally in New Zealand.”

For instance, Section 70(1) of The Psychoactive Substance Act of 2013 states that without reasonable excuse, a person should not sell or supply, offer to sell or supply, or even possess a non-approved psychoactive substance. In the amendment, it’s added that Section 70(1) does not apply to drug and substance checking providers if they are checking or returning a non-approved psychoactive substance to the person who submitted the substance for checking or disposal.  

Salary History Ban

As part of your background screening,  you may want to inquire about the candidate’s salary history to better decide on their salary package. However, please proceed with caution. While most countries do not have a law banning inquiries on salary history, there’s likewise no regulation that requires candidates to disclose it. 

Still, it’s best to check if a new law on salary history ban has been passed. The Philippines, for example, already filed a senate bill which would be called the Salary Transparency Act of 2022 once approved. In this bill, it would be illegal for employers to ask about an applicant’s salary history unless the candidate themselves volunteered the information.

Best Practices To Improve Compliance With Relevant Laws 

To improve compliance with the new background check laws in 2023 and beyond, it's best to:

  • Familiarise yourself with the current laws, so it’ll be easier for you to identify which ones may have an update in the future. 
  • Always get the candidate’s consent when collecting their information. This is a principal requirement in data protection policies. Also, don’t forget to inform the applicant how you’ll store and discard their information. 
  • Work with your legal team. If you’re having difficulties consolidating all the relevant laws to background screening, it’s best to work with your legal team. 
  • Partner with a reliable background screening company. Background screening platforms have a system to conduct checks while staying compliant with the relevant rules and regulations. 

Stay Compliant, Reduce Risk with Veremark

Trusted by the World’s best workplaces, Veremark can conduct checks under the applicable laws and regulations, significantly improving compliance and reducing risks. 

With Veremark, all you need to do is provide applicant details and customise the requirements for the checks you need. We’ll conduct the checks and deliver results with insights into your candidates, making it easier for you to choose the best talent. 

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FAQs

Are there laws surrounding background screening specifically?

Most countries do not have a single law governing background checks. However, they may have rules and regulations that may affect certain aspects of the screening process. 

What are the principal laws to look into when you conduct pre-hire checks?

Some of the principal laws closely related to pre-employment background checks include data protection acts, laws aiming to avoid discrimination, and laws that govern criminal checks.

How can you best improve compliance with the applicable rules and regulations?

One of the best ways to improve compliance is to familiarise yourself with the laws and work with your legal team to see if there are updates. You may also partner with a reliable background screening platform like Veremark since we have the compliance framework in running different background checks.

FAQs

What background check do I need?

This depends on the industry and type of role you are recruiting for. To determine whether you need reference checks, identity checks, bankruptcy checks, civil background checks, credit checks for employment or any of the other background checks we offer, chat to our team of dedicated account managers.

Why should employers check the background of potential employees?

Many industries have compliance-related employment check requirements. And even if your industry doesn’t, remember that your staff have access to assets and data that must be protected. When you employ a new staff member you need to be certain that they have the best interests of your business at heart. Carrying out comprehensive background checking helps mitigate risk and ensures a safer hiring decision.

How long do background checks take?

Again, this depends on the type of checks you need. Simple identity checks can be carried out in as little as a few hours but a worldwide criminal background check for instance might take several weeks. A simple pre-employment check package takes around a week. Our account managers are specialists and can provide detailed information into which checks you need and how long they will take.

Can you do a background check online?

All Veremark checks are carried out online and digitally. This eliminates the need to collect, store and manage paper documents and information making the process faster, more efficient and ensures complete safety of candidate data and documents.

What are the benefits of a background check?

In a competitive marketplace, making the right hiring decisions is key to the success of your company. Employment background checks enables you to understand more about your candidates before making crucial decisions which can have either beneficial or catastrophic effects on your business.

What does a background check show?

Background checks not only provide useful insights into a candidate’s work history, skills and education, but they can also offer richer detail into someone’s personality and character traits. This gives you a huge advantage when considering who to hire. Background checking also ensures that candidates are legally allowed to carry out certain roles, failed criminal and credit checks could prevent them from working with vulnerable people or in a financial function.

Transform your hiring process

Request a discovery session with one of our background screening experts today.

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