Pre-Employment Background Checks

When you are hiring new employees, you might need a bit more information to make your decision. However, you do not have unlimited rights to dig into an applicant's background and personal life. Employees have a right to privacy in certain areas, a right they can enforce by suing you. Therefore, it's important to know what's permitted when following up on potential employee's background and work history.

The following are types of information that employers often consult as part of a pre-employment check, and the laws governing their access and use in making hiring decisions:

Credit Reports

Under the Fair Credit Reporting Act (FCRA) employers must get an employee's written consent before seeking an employee's credit report. If you decide not to hire or promote someone based on information in the credit report, you must provide a copy of the report and let the applicant know of his or her right to challenge the report under the FCRA. Some states have more stringent rules limiting the use of credit reports. Using Consumer Credit Reports : What Employers Need to Know details the Fair Credit Reporting Act's impact on pre-employment checks.

Criminal Records

To what extent, a private employer may consider an applicant's criminal history in making hiring decisions varies from state to state. Because of this variation, you should consult with a lawyer or do further legal research on the law of your state before digging into an applicant's criminal past.

For FBI checks consult the following resources:

• FBI Services for Businesses
  The Federal Bureau of Investigation offers assistance to businesses in the areas of employee background investigation, antitrust investigation, trade secret and intellectual property protection, cyberspace patrol, economic espionage, and anti-terrorism.
• FBI Criminal History Checks for Employment and Licensing
  Advises employers to contact the agency requiring the background check or the appropriate state identification bureau (or state police) for the correct procedures to follow for obtaining an FBI fingerprint background check for employment or licensing purposes.
• FBI Checks on Employees of Banks and Related Entities
  Information on conducting criminal history background checks on employees of banking-related institutions.

Lie Detector Tests

The Employee Polygraph Protection Act prohibits most private employers from using lie detector tests, either for pre-employment screening or during the course of employment. The law includes a list of exceptions that apply to businesses that provide armored car services, alarm or guard services, or manufacture, distribute, or dispense pharmaceuticals. Even though there is no federal law specifically prohibiting you from using a written honesty test on job applicants, these tests frequently violate federal and state laws that protect against discrimination and violations of privacy. The test are rarely reliable, so unless a business is one of the exceptions, most employers do not use lie detectors in the hiring process.

Medical Records

Under the Americans with Disabilities Act employers may inquire only about an applicant's ability to perform specific job duties and cannot request an employee's medical records. As long as the employee can do the job, with or without reasonable accomodation, an employer may not make a job decision (on hiring or promotion, for example) based on an employee's disability. Some states also have laws protecting the confidentiality of medical records.

Bankruptcies

Bankruptcies are a matter of public record, and my appear on an individual's credit report. The fedreal Bankruptcy Act prohibits employers from discriminating against applicants because they have filed for bankruptcy.

Military Service

Military service records may be released only under limited circumstances, and consent is generally required. The military may, however, disclose name, rank, salary, duty assignments, awards, and duty status without the member's consent.

School Records

Under the Family Educational Rights and Privacy Act and similar state laws, educational records (e.g., transcripts, recommendations, and financial information) are confidential, and will not be released by the school with a student's consent.

Workers' Compensation Records

Workers' compensation appeals are part of the public record. Information from a workers' compensation appeal may be used in a hiring decision if the employer can show the applicant's injury might interfere with his ability perform required duties.

More Information

• Pre-Employment Background Screening Guide for Financial Institutions
  FDIC guidance on developing an effective pre-employment background screening process.