On the right side of the law: Is your background screening helping you stay compliant?

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Your background screening partner may provide fast, reliable results, but how sure are that it's helping you remain compliant?

As an employer, conducting background checks on potential employees is a crucial part of the hiring process. It helps to ensure that you maintain a safe, professional work environment while mitigating the risk of hiring unsuitable candidates. However, it is equally important to ensure that your background screening process is compliant with the law, as non-compliant practices can lead to legal repercussions and damage to your company's reputation.

In this comprehensive guide, we will explore the legal aspects of employee background screening and provide you with essential information to help you stay on the right side of the law. We will cover the following key areas:

  • Types of background checks and their compliance requirements
  • Ensuring compliance in your background screening process
  • Best practices for background screening
  • Monitoring and updating your background screening policies
  • The legal framework

Understanding the legal framework governing background screening is crucial to ensure compliance. In the United States, for example, the Fair Credit Reporting Act (FCRA) and Title VII of the Civil Rights Act of 1964 are the primary federal laws governing background checks. Additionally, many states have their own laws regulating background screening, so it's essential to be familiar with the applicable laws in your jurisdiction.

Fair Credit Reporting Act (FCRA)

The FCRA regulates the collection, use, and disclosure of consumer report information, which includes background check data. Under the FCRA, employers must:

Obtain written consent from the applicant before conducting a background check.

Provide a clear and conspicuous disclosure that a background check will be conducted.

Notify the applicant if the information obtained from the background check may lead to adverse employment action (i.e., not hiring them).

Provide the applicant with a copy of their consumer report and a summary of their rights under the FCRA before taking any adverse action.

Title VII of the Civil Rights Act of 1964

Title VII prohibits employment discrimination based on race, color, religion, sex, or national origin. To avoid discriminatory practices, employers should not use background checks to disproportionately exclude certain groups of applicants. The Equal Employment Opportunity Commission (EEOC) has issued guidelines on how to conduct background checks in a way that is consistent with Title VII.

Types of Background Checks and Their Compliance Requirements

Different types of background checks require different compliance measures. Here are some common background checks and their compliance requirements:

Criminal Background Checks

Criminal background checks are subject to both FCRA and Title VII regulations. Employers should consider the nature and gravity of the offense, the time elapsed since the offense, and the nature of the job when evaluating criminal records to avoid discrimination claims.

Credit History Checks

Credit history checks are regulated by the FCRA. Employers must obtain written consent from applicants and provide them with a copy of their credit report if the information may result in an adverse employment decision.

Education and Employment History Checks

Employers must obtain written consent from applicants before verifying their education and employment history. False claims of education or employment history can be grounds for not hiring an applicant, but employers must ensure they treat all applicants fairly and consistently.

Ensuring Compliance in Your Background Screening Process

To maintain compliance in your background screening process, you should:

  • Develop clear, written policies outlining your background screening process.
  • Train HR staff and hiring managers on FCRA, Title VII, and any applicable state laws.
  • Document each step of the background screening process, including obtaining consent, providing disclosures, and giving notice of potential adverse actions.
  • Engage a reputable, FCRA-compliant background screening company to conduct your checks.

Best Practices for Background Screening

Adopting best practices in your background screening process can help you maintain compliance and avoid legal issues. Some best practices include:

  • Implement a consistent screening process for all applicants, regardless of their race, color, religion, sex, or national origin, to avoid discrimination claims.
  • Tailor your background screening requirements to the specific position being filled, considering only the information that is relevant to the job responsibilities.
  • Establish a decision matrix that outlines the criteria for evaluating background check results, providing clear guidelines for hiring managers to follow.
  • Conduct background checks only after making a conditional job offer to avoid potential discrimination claims based on background check results.
  • Allow applicants the opportunity to dispute or provide context for any negative information found in their background check before making a final decision.
  • Regularly review and update your background screening policies to ensure compliance with evolving laws and regulations.

Monitoring and Updating Your Background Screening Policies

Laws governing background screening are constantly evolving, and employers must stay up-to-date with these changes to maintain compliance. Regularly reviewing and updating your background screening policies can help you stay on the right side of the law. Here are some steps you can take:

  • Monitor federal, state, and local legislation related to background checks to stay informed about any changes or updates.
  • Consult with legal counsel or a compliance expert to ensure your policies are in line with current laws and regulations.
  • Regularly audit your background screening processes, looking for areas that may be outdated or non-compliant.
  • Train HR staff and hiring managers on any updates to your background screening policies, ensuring they are aware of and understand the changes.


Employee background screening is a critical aspect of the hiring process that helps employers maintain a safe and professional work environment. However, it's equally important to ensure that your background screening process is compliant with the law to avoid legal issues and protect your company's reputation. By understanding the legal framework, adopting best practices, and regularly monitoring and updating your policies, you can stay on the right side of the law while making informed hiring decisions.

Veremark helps business across the globe with their hiring decisions. If you need background screening software that helps your business hire right, and stay compliant, get in touch with us today.


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.

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