Hiring Compliance: Strategy and Trends for Background Checks

September 19, 2017

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Hiring the best employees requires meticulous due diligence. This includes a proper background check to ensure the validity of all information provided. Some companies may feel that this step is overrated or unnecessary, but a partial or forgone screening process can lead to high costs for businesses.

The cost of not properly vetting a potential employee can be seen in potential lawsuits, wasted time in recruiting and training, unwanted brand damage and lost customers due to embarrassing terminations. Replacing an employee is estimated to be 2-3 times their actual salary, which means starting all over again at square one after losing valuable resources. Businesses can even incur the wrath of the EEOC and other regulatory bodies due to a negligent screening process.

The Fair Credit Reporting Act (FCRA) can also come into play even when background checks are conducted. Lawsuits against employers have resulted from not having a clear and conspicuous disclosure about the background check conducted, especially if they find applicant consent was deemed hidden from the public. Not disclosing the use of credit reports, non-compliant disclosure forms and other improper procedures have all resulted in litigation against businesses.

So what is the best plan of action when performing background checks? Let’s take a look.

  • Always perform a background check. Some surveys show up to 40% of resumes contain fraudulent material of some kind. It’s never worth the risk to let it slide.

  • When conducting a check, make sure your form is clear and conspicuous. Separate it from all other documents as a stand alone, with a only a detailed description of the nature of the screening as accompaniment.

  • Make sure the applicant gives written permission to perform the background screening. This makes any dispute down the road easier to resolve.

  • Always give the applicant a copy of the exact report received by the employer, plus a summary of rights applicable to dispute any information contained within.

As an industry leader, Paycor has been helping businesses of all sizes in this important step. Check out how we bring smart solutions to the hiring and onboarding process, as well as other facets of business that fit your needs.

To listen in to the entire recorded webinar on preparing for the changes, click here and be sure to check out a full list of Paycor’s upcoming Coffee Break webinar topics to stay current on regulations and industry trends.

This content is for educational purposes only and is not intended to serve as legal advice.

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