According to The Society for Human Resource Management, “Less than a decade ago, only 51% of employers conducted background checks on applicants… Today, 96% of employers do so, and the practice is as prevalent among small and medium-sized companies as it is among large companies.” Some of the reasons to conduct criminal background checks include: reducing theft, limiting legal exposure for negligent hiring and retention, checking for potential discipline problems, verifying application information, decreasing insurance costs and mitigating some of the uncertainty in the selection process.
Employers must consider process issues in order to avoid liability when using criminal background checks as part of their selection process. Criminal background checks are subject to the Fair Credit Reporting Act (FCRA) and similar state laws. The Federal Trade Commission, which enforces the FCRA, treats criminal background checks as investigative consumer reports. Thus, employers are required to disclose to all applicants (or employees) on a form separate from the employment application, that an investigative consumer report will be obtained and that the report will only be used for employment purposes. The applicant must give written authorization before the employer may proceed. The employer must also inform the applicants of their rights under the FCRA in writing. Employers must provide a copy of the consumer report to any applicants that are not hired or to any current employee against which it will take adverse employment action as a result of information obtained via a consumer report.
When managed properly, the rewards far outweigh the risks associated with conducting Background Checks. The rewards include increasing the number of productive and engaged employees while reducing potential employment liability.