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Background checks are an essential tool for making your decisions. When used properly, they can enable an organization to recruit people who have integrity and impeccable character. However, background checks can also have potential downsides. Legal mishaps in carrying them out can open up an organization to costly class action suits.
Therefore, when carrying out background checks, care needs to be taken in order to maximize the benefits without turning them into a legal nightmare. This requires a well-thought out strategy for utilizing them. To set out such a strategy, it is necessary to implement certain best practices.
Background checks should never be carried out in a vacuum. Neither should they be carried out haphazardly. They should be carried out against the background of a well articulated policy. Therefore, the first best practice is to create a background check policy.
The Fair Credit Reporting Act (FCRA) is the law which governs how background checks should be carried out. At the core of the FCRA is the idea that a background check should not be carried out without authorization from the employee or applicant (the person about whom the information will be collected). As such, it sets out strict guidelines under which the authorization should be obtained.
The FCRA also spells out strict procedures to be followed when a background check is to result in an adverse action. An adverse action is basically an action which has negative implications for an employee or applicant e.g. not hiring the applicant or firing an employee.
Among the procedures are adverse action notices. These are basically notices which are sent to the employee or applicant. There are two kinds of notices i.e. pre adverse action notices and adverse action notices. Each of these has a strict set of guidelines on their timing, content and supporting documents. The tiniest deviation from the guidelines can be grounds for a lawsuit.
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