The year in background checks 2012
Dec 11, 2012 Quinn Thomas
The use of background checks saw some revision and addition when it comes to state and federal regulations in 2012. For human resources representatives, it can be difficult to remember which laws have changed, been edited or assigned new enforcement guidelines. As the year comes to a close it is timely to round up some of the major changes to the usage of consumer credit reports and legal records when determining the eligibility of a prospective employee. Credit reports and state law
A growing number of states are imposing increasingly stringent requirements on how and what type of background data may be used for employment screening. In 2012, Washington and Oregon passed laws stating that credit reports may not be used as a factor for employee eligibility. These states join California, Connecticut, Hawaii, Illinois, Maryland and Vermont in these prohibitions. Employers in these states would be wise to brush up on state laws in order to remain compliant with regulations. E-verify requirements
Many companies are using electronic methods of conduction employment screening, but it is now mandated that all federal contractors be checked through the E-verify system. Further, employers in Arizona must use this system for all employees. E-verify confirms that an individual is authorized to submit an I-9 form, which federally authorizes individuals to work in the United States. That Arizona requires E-verify might suggest that further state-by-state legislation will be in the works in the coming years. CFPB Fair Credit Reporting
The U.S. Consumer Financial Protection Bureau (CFPB) set forth new regulations in 2012 that protect employee's right to notice regarding employers' use of consumer credit data. Employees now must be given a summary of rights under the Fair Credit Reporting Act. Notice must be given when credit checks are requested, and there must also be a written explanation as to why employment was denied if credit records were used. Further, any third party firms that are processing or analyzing credit data have to be documented. All debt collection data should have a specific and legal purpose and may only be used within such parameters. Companies should ensure that hiring practices are compliant with these updates and also fall within state regulations on the usage of credit reports. Employee screening is necessary to the safety of staff and the assurance that an individual's identification and credentials are legitimate. Companies should audit hiring practices and make sure updated training is given to any individuals involved in the hiring process.
A growing number of states are imposing increasingly stringent requirements on how and what type of background data may be used for employment screening. In 2012, Washington and Oregon passed laws stating that credit reports may not be used as a factor for employee eligibility. These states join California, Connecticut, Hawaii, Illinois, Maryland and Vermont in these prohibitions. Employers in these states would be wise to brush up on state laws in order to remain compliant with regulations. E-verify requirements
Many companies are using electronic methods of conduction employment screening, but it is now mandated that all federal contractors be checked through the E-verify system. Further, employers in Arizona must use this system for all employees. E-verify confirms that an individual is authorized to submit an I-9 form, which federally authorizes individuals to work in the United States. That Arizona requires E-verify might suggest that further state-by-state legislation will be in the works in the coming years. CFPB Fair Credit Reporting
The U.S. Consumer Financial Protection Bureau (CFPB) set forth new regulations in 2012 that protect employee's right to notice regarding employers' use of consumer credit data. Employees now must be given a summary of rights under the Fair Credit Reporting Act. Notice must be given when credit checks are requested, and there must also be a written explanation as to why employment was denied if credit records were used. Further, any third party firms that are processing or analyzing credit data have to be documented. All debt collection data should have a specific and legal purpose and may only be used within such parameters. Companies should ensure that hiring practices are compliant with these updates and also fall within state regulations on the usage of credit reports. Employee screening is necessary to the safety of staff and the assurance that an individual's identification and credentials are legitimate. Companies should audit hiring practices and make sure updated training is given to any individuals involved in the hiring process.
