Employment Screening Adverse Action

As an employer, navigating employment laws can be a tricky endeavor. Compliance with the Fair Credit Reporting Act adds to the headache inducing, pain staking chances of making mistakes that opens your company up to litigation. The FCRA has specific guidelines that must be followed when you are considering not hiring an applicant called Adversepre employment checks Action that applies when you have utilized a background screening company. Adverse Action is defined by the FCRA as “A denial of employment or any other decision for employment purposes based in whole or in part on a consumer report that adversely affects any current or prospective employee.” -FCRA §603(k)(1)(B)(ii) and FCRA §615.  Adverse Action not being properly followed is the top reason for class action lawsuits for FCRA violations.

So how do you keep your company out of the cross hairs for this type of litigation? Follow these simple steps:
If you think you might not hire the candidate:

  • Send the candidate a letter (the pre-adverse notice) that explains that the background check results are under review and a decision is pending
  • Include a copy of the candidate’s background check results
  • Include a copy of “A Summary of Your Rights Under The Fair Credit Reporting Act”
  • Keep a copy of the letter and attachments, and document the date sent. (send by certified mail if you’re sending the notices yourself)
  • Consider sending by certified mail if you’re sending the notices yourself
  • Wait no less than five (5) business days before taking any additional actions so the candidate has time to dispute inaccuracies.

If you decide to not hire:

  • Send a denial of employment adverse action letter to the applicant informing them of decision, and that the decision was based on, at least in part, of the background check results.
  • Include the name, address, and phone number for the CRA that performed the background check and a statement explaining the CRA wasn’t the decision maker and can’t explain why adverse action was taken.
  • Inform the job candidate of the right to request a free copy of the background check within 60 days and the right to dispute inaccurate information.
  • Keep a copy of the letter and attachments, and document the date sent (send by certified mail if sending them yourself)

You are able to view and print the pre-adverse and adverse action letters by logging into your Instascreen account. You will select the applicant you would like to send the adverse action letter to, then on the reports results page scroll down to the “Disclosures and Forms” section and use the drop down box to select the appropriate document. Your choices at that time are to view, print, or email to applicant.

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Key Differences between In-House and Outsourced Background Checks

If you or your company perform background checks on tenant or employment applicants, it is important to decide whether in-house or outsourced background checks are right for you.

First, what is the difference between in-house versus outsourced background screening?

In-house background screening is when a landlord, realtor, or employer individually searches sources for background screening. A common example of this would be a landlord calling a tenant applicant’s employer to verify the applicant’s position and wage/salary. Another instance of in-house background screening would be a hiring manager visiting a county courthouse’s databases to search for records under an employee applicant’s name.

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Outsourced background screening is when a landlord, realtor, or employer hires a third-party background screening company to take care of their background checks. Typically this third-party is either a Consumer Reporting Agency (CRA) such as AAA Credit Screening Services, or a “Reseller” that purchases its background reports from a CRA. Processes vary from company to company, but in the case of AAA Credit Screening Services, the landlord, realtor, or employer (“client”) sends in a request along with the individual’s application and/or authorization form(s), specifying the scope and type of background check that they would like, such as a Nationwide Criminal Search or a Worker’s Compensation Report. From there, AAA Credit Screening Services procures the report information and returns it to the client requestor.

The main arguments for and against in-house and outsourcing background checks are as follows:

In-house Background Screening Pros:

  • Background checks do not have to conform to the Fair Credit Reporting Act (FCRA), meaning they can include searches for information going beyond seven (7) years of history
  • No service fee, other than those charged by the sources (e.g. courthouse record clerks, high school registrar’s offices)

In-house Background Screening Cons:

  • Scope is limited to what the landlord/realtor/employer can do on their own, without the use of CRAs or Resellers. Usually this means visiting county courthouses and police departments for criminal records or contacting the applicant’s references left on their resume or application. Some counties do not have online or phone access to court or police records.
  • Background screening is a time-consuming process, especially for those who are not in the background screening industry. A single applicant’s background check can take hours of work; for a human resources worker paid the industry average of $62,960/annually, in-house background screening can be a waste of company time and resources.

Outsourced Background Screening Pros:

  • Third-party background screening companies typically have a wide scope of searches. AAA Credit Screening Services, for example, is able to perform criminal background checks at the county, state, or nationwide level. Additionally, AAA Credit Screening can obtain criminal records from foreign countries, something that is simply impossible for most individual landlords, realtors, or employers performing in-house background screening. AAA Credit Screening also has access to certain searches that are not available to most individuals, such as Social Security Number Verifications or Business Credit Reports.
  • Time and resources used on background screening are limited to the amount of time spent ordering the report and the cost of the report as purchased from the third-party background screening company. A client can purchase a Statewide Criminal Report from AAA Credit Screening and have the report turnaround in one business hour, or spend weeks of time and hundreds of dollars on court access fees, trying to search the county courthouses within the state for criminal records.

Outsourced Background Screening Cons:

  • Individuals must careful with the company they chose to perform their background checks. CRAs and Resellers who do not hold a membership with the National Association of Professional Background Screeners (NAPBS) may be unreliable, or not conforming to industry standards, leaving clients with low-quality, unfinished, or falsified reports.
  • Third-party background screening companies must conform to the guidelines set forth by the Fair Credit Reporting Act (FCRA). This means that on most searches, CRAs and Resellers can only return 7 years’ worth of history. The FCRA also requires that the client’s permissible purpose (such as tenancy, employment, extension of credit, or insurance underwriting) for background screening be determined by the CRA or Reseller before any background screening can occur. Additionally, the FCRA mandates that all consumer reports (that is, credit or background screening reports on individuals) must be authorized by the consumer, that is, the individual whose background is being reported, in writing.

AAA Credit Screening Services is not only a member with the NAPBS, but also an accredited business with the Better Business Bureau (BBB), and a partner of the Society for Human Resource Management (SHRM) and the National Association of Residential Property Managers (NARPM). AAA Credit Screening Services has a global reach for background checks, able to perform searches in many locations that other companies are not. AAA Credit Screening also stays up-to-date on tenant, credit, and employment background screening laws so that its clients can be protected from undesired litigation.

To start outsourcing your background checks today, complete AAA Credit Screening Service’s new customer sign up form or call our friendly customer service staff toll free at 1-888-282-0447 to speak to a live representative during business hours.

Why do background screening companies use court documents instead of social media or Google to perform their screens?

Using entities like Facebook and Google can result in discrepancies between a person’s factual history and the information provided online.  Online records can also confuse those who are background screening as they may have common names or even have relatives in which they share a name with.  What does that mean for employers and landlords?  It means that the information found online has no promise of accuracy and can hinder and harm the selection psocial mediarocess.  In addition to these concerns, there have been cases where information presented online can be taken out of context such as the case with Sherry Sherrod, the former Georgia State Director of Rural Development for the US Department of Agriculture.  A blogger posted excerpts that were taken from an event of the National Association for the Advancement of Colored People which were misconstrued as racist.  The result?  Sherry Sherrod was met with demands by government officials to resign.  In short, Mrs. Sherrod turned around and sued the blogger and a co-defendant.  She was offered a higher position by the USDA but declined.

What should employers look for on background checks?

Employers should have specific goals for considering individuals with a criminal history.   For instance, the United States Department of Labor reports that nearly 2 million American employees experience violence in the work place within each year.  Employers that operate their businesses in high stress atmospheres or serve alcohol may want to contemplate hiring individuals with prior record of violent crimes.

In other cases, employers who operate their business based on a delivery system may not want to employ those with DUI records and repeat drug abuse.  As well as those records, they may also want to review the number of traffic laws broken which may sometimes appear on a person’s reported history.

In addition, unless the potential employee is on the sex offender registry, reporting agencies are legally bound to only reveal records that have occurred within the last seven years.  Going outside of these bounds may result in legality problems and lawsuits.

Another type of background screening which is often sought after includes credit history.  The results of this screening may indicate that the potential employee has had or may have questionable history of mishandling debt.  These records could go hand in hand with persons who may have a recording of theft or fraudulent charges on their criminal record.  Employers that create an environment in which the employees complete monetary transactions may want to scrutinize between applicants who have documentation on their record which indicates financial trouble.

In addition to the previously mentioned reports, employers must also take into account a person’s employment history.  Verifying the terms on which someone has left a job and whether they are qualified based on experience to take on a newly offered role can greatly affect the workplace.

So what does all of this mean for employers?  It means that employers must greatly consider in which way they differentiate between those they wish to hire and those they wish to not.   Being thorough about having a set of goals and guidelines will assist the employer in deciding in which areas they want to review of a person’s background.

As always, AAA Credit Screening is here to help determine which types of reports will best suite your needs. Give us a call today! 888-282-0447

Do errors in background checks occur?

Yes of course! Errors can occur for various reasons. AAA Credit follows specific protocols to ensure the correct background check information is reported, but at times there are still mistakes. That is why the FCRA best practices requires adverse acerrorstion protocols. Every applicant should know exactly what is being reported about them that may adversely affect the decision of the landlord or employer, and the applicant should be given adequate time to have a record changed if the information has an error. If an applicant states that the information being reported is an error, the applicant will need to contact the company that provided the report and have them open an investigation to get the correct information reported.

What does it mean when a Social Security Number is flagged on a background check?

A Social Security Number cannot be flagged on a background check, but mismatching information returned from SSN search may be flagged. A SSN verification and/or trace searches the Social Security Administration data base by SSN. The information thRed-Flagat is returned is name, date of issuance, validity of number, address history, and state of issuance. If the information that is returned does not match the information provided by the applicant, the results may be flagged. An employer or landlord may choose the specific circumstance that the information would need to be flagged.

So-Called “Free” Background Screening

When looking for a background screening service on any given search engine, what will come up time and time again in your search are the advertisements for so-called “free” background checks. This begs the question: why pay a background screening company, such as AAA Credit Screening, for their services, when you could simply pull a free report off of one of these websites? Listing their services as frfreeee and easy to use, wherein you can initiate a full search right off the homepage, these websites make it seem like a background check is just a simple click away!

Things that aren’t specified on the “free” background screening websites? What is actually included their “background checks.” Often, “background check” is a vague, catch-all term used by these companies; it is a term that often doesn’t even specify what the scope or purpose of a search is before you conduct it. It could be anything, from a public records search to a motor vehicle report, a county criminal report to a bankruptcy search. This can be confusing to anyone who needs a report for a specific purpose, such as to verify that an applicant does not have a criminal record, nationwide.

A second troubling aspect of these “free” services is their dishonest nature. The majority of these websites will allow a search to be initiated for free, show that there are records associated with an individual’s name, and then, upon trying to obtain more information, will prompt the user to pay money for the full report, which would show any actually relevant or necessary details. These details can be especially important to criminal reporting, such as whether the crime committed was driving 5 MPH over the speed limit or if it was armed robbery, whether the offender’s name was Jon J. Smith or John P. Schmidt, or whether the offender was found guilty or the case was dismissed.

A final problem with “free” background check services? The often-overlooked disclaimers. The reason why you can search for an applicant’s name on the homepage of these websites is because of the fine print text that they put at the bottom of the screen: You cannot use these reports for employment screening, consumer credit decisions, tenant screening, or any other purpose that may require FCRA compliance. Essentially, this means that unless you are an individual looking for their own record, you can get into serious legal trouble for using these websites. Why? Firstly, because they don’t require the authorization of the applicant. This violates the Fair Credit Reporting Act (FCRA), which requires all consumer reporting agencies to have the applicant’s permission when furnishing a report. Secondly, because these databases aren’t reviewed, the case records aren’t verified for accuracy, and many of the things that will come up on the report will be out-of-date or simply incorrect.

Relying on a report from a “free” background screening services may seem like a good idea at first, but upon closer examination, but in the end, you always get what you pay for. In this case, that is nothing worth value. These reports are often completely useless, if not because of their inaccuracies, then often because they are searching the wrong areas or not searching for the right kind of record. In the end, to get your report, the company will likely require you to pay a fee anyway, relying on deceptive advertising to convince you otherwise. After paying for the report, you will find its contents irrelevant, as you find out that you cannot legally use the report for the reason you needed it. The biggest difference that separates these companies from consumer reporting agencies such as AAA Credit Screening is the quality of service. From start to finish, AAA Credit Screening provides you with consultation as to the report options that are available to you. Instead of trying to deceive you with hidden fees or confusing language, AAA Credit Screening will confirm your purpose for screening the report before you pay; our reports can be used for all permissible purposes under the FCRA, including consumer credit decisions, employment, and tenant screening. Friendly and capable staff will review every report before it reaches your screen, confirming the accuracy of the information you are receiving.

For more information on AAA Credit Screening, and how YOU can start screening your applicants today, visit us at www.hrbackground.com or give us a call at 1-888-282-0447!