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Background Checks for New Start-Up Employees

February 10, 2013

The prime objective of a start-up is to get work done quickly. In doing that, most of the time they do not execute an appropriate background verification and criminal check before hiring the resources. This could be extremely hazardous and might lead to various legal issues. This acts as a blemish to the reputation of the company and might lead to a cancellation of the business license. But at the same time, companies must be incredibly careful about how they go about this process.

Understanding the Law

Perhaps most importantly, local companies should be aware that the Equal Employment Opportunity Commission recently released guidance on businesses using arrest and conviction records in the hiring process. This is a common practice, and many startups may have assumptions about how the law does or does not apply to these matters. At the very least it is critical to be aware of the basics of the law and how they might apply to you.

For example, per the new EEOC guidance, an employer may be treading on thing ice when a criminal background check treats an employee differently due to his or her protected status. This may occur mistakenly, and there may be situations where a protected group is screened out because of the criminal background check regardless of the business necessity.

It gets even more complex. For example, the EEOC guidelines make clear that arrests and convictions are different and must be treated as such. To be clear, an applicant may be denied because the conduct underlying their arrest make them unfit for the position. But a mere arrest, without a conviction, should not be relied upon as strongly. There may not be a black and white rule that always works, and startups should be careful about how they approach the issue. Alternatively, if an applicant was convicted of any crime, it may be a more acceptable reason to deny employment. But even then, it is best practices to have individual assessments, even among those who were convicted previously. Ensuring that the specifics of any applicant are considered in every case is an important way to assure that the law is followed and you are not setting yourself up for potential legal challenge down the road.

What about Credit Checks?

Beyond one's criminal background, there are also clear rules regarding use of credit checks to determine possible employment. Per the Fair Credit Reporting Act an employer must make a written disclose, in writing, that the background check may include in-depth information about his or her "character, general reputation, personal characteristics, mode of living, criminal history, driving history and work history." On top of that the employer must also be timely in their actions-disclosing the intention to obtain the report within three days. Of course, it also goes without saying that employers must be vigilant about protecting an applicant's personal information against unauthorized access or use.

Act Prudently to Protect Your Business

The above offers only a cursory look at the issues related to background checks for employment purposes. It is intended only to reinforce the idea that employers must be careful about how they use background checks, when they do so, and why. In all cases, employers should discuss the matter with a business attorney before taking any actions so that no improper information is included in the background check. Limiting the information available will help ensure that no improper information is considered during the hiring process.

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