Want help with your hiring? It’s easy. Enter your information below, and we’ll quickly reach out to discuss your hiring needs.
With the rise of remote and hybrid work, many employers now have a greater talent pool to choose from. They can hire from (almost) anywhere. While this is a massive win for recruiting efforts, it impacts the background screening process significantly because most employers must comply with layers of different regional regulations. For instance, if an employer is headquartered in Pennsylvania, but the candidate is based in California, the employer must consider the laws and regulations of both states. This caveat existed but wasn’t nearly as common a few years ago. In addition, there weren’t almost as many overlapping, yet often conflicting, state and local laws.
State, local, and other regional laws and regulations complicate the background check process. It can make it challenging for employers to keep up and follow all applicable rules. This raises the possibility that candidates might inadvertently get passed over due to layered requirements with which employers are not confident they can comply.
Additionally, when all appropriate laws are considered, this often increases the time it takes to complete the background check process and may result in employers moving on to other candidates to fill seats.
Now more than ever, employers must find the delicate balance between conducting background checks within the parameters of an array of laws and ensuring it’s done fairly, accurately, and timely to afford candidates opportunities to work. And this must be done amid numerous other obligations.
Increasing Demand for Background Checks
A 2021 Professional Background Screening Association (PBSA) survey found that 95% of companies with at least one location in the U.S. perform background checks. Many highly regulated industries must conduct background checks, while others want to protect their assets and employees and avoid litigation. Industries that deal with vulnerable populations, such as volunteer organizations that work with children, are also increasing their use of background checks. This practice’s increased adoption, speed, and scale mean a greater need for timely checks. Overlapping regional requirements, unfortunately, make this challenging.
Increased Complexity in the Global Regulatory Landscape
The increase in the need for background checks comes at a time when the privacy and regulatory space is becoming even more complex. Criminal justice reform has gained significant momentum over the last couple of years with “Ban the Box” policies and various “Fair Chance” Acts. These laws prevent employers from asking about an applicant’s criminal history before making a job offer to avoid employment discrimination, among other added obligations.
In addition to these types of criminal justice reforms, the Equal Employment Opportunity Commission (EEOC) guidance has also changed how employers conduct and evaluate background checks – and it’s also altered how consumers are treated during the process.
Another significant change in the industry is around rising privacy concerns. As new regulations are created to address these privacy regulations, this has created further complexity for employers regarding background checks. Conflicts often exist between state and local privacy and employment regulations, making it very difficult for employers and landlords to remain compliant. This can put employers in a Catch-22 position. For example, they’re not allowed to use specific data that surfaced in a background check, but if that person commits an aggravated assault on someone in their office, they could get hit with a negligent hiring claim.
Best Practices for Global Companies in Conducting Background Checks
With all the changes, employers must ensure they’re putting best practices to mitigate risk. A first and essential step is to bring in legal counsel early and often to ensure you abide by all applicable statutes – especially if you are hiring nationally. It’s necessary to navigate this carefully – you don’t want to take a blanket approach and run the same checks on everyone.
Consideration of where the candidate is located is essential. It’s also important to carefully decide which checks are relevant to each job and use those consistently for each role to avoid bias or discrimination.
For example, you might need to run a credit check on someone operating in a finance role but not on a laborer. Even still, the finance role in a particular state might not fall under an exemption within a state with credit report limitations. Where there are conflicts, in theory, as an employer, you may consider looking at both laws and going with the more conservative law. This is where your legal counsel can be of great help. It’s also helpful to join associations that help you stay in the know.
Screening Practices: Respectful and Fair
For businesses that operate at the national or international level, crossing state lines and borders often means different laws/requirements depending on the candidate’s residence and work location. There are particular challenges to background checks related to such considerations as “Ban the Box” laws, privacy laws, disclosures and authorizations, and, more recently, the legalization of marijuana.
Though this landscape continues to evolve and become more complex, businesses operating at this scope can still successfully conduct background screening with candidates across borders if working with an innovative screening company and their legal counsel. The best-practice principle here is to behave in a way that is respectful and fair to the candidate to make sure the background check process is a positive experience for everyone.
Katie Kulp is the Vice President of U.S. operations and compliance at Certn.
Get the top recruiting news and insights delivered to your inbox every week. Sign up for the Recruiter Today newsletter.