Balancing Compliance with Fairness and Inclusion In Background Checks

When candidates search for a new job, they’re now considering more factors than ever before; it’s no longer simply about better pay.  

In a survey by Qualtrics, more than half of U.S. employees (54%) said they would be willing to take a pay cut to work at a company that shares their values. Fifty-six percent said they wouldn’t even consider a job at a company that has values they disagree with.

As such, employers are adapting how they operate to attract and retain modern employees and connect with their values, and today, adapting means building a more fair and inclusive workplace. 

After all, according to a report from Monster, 86% of job seekers believe that a company’s approach to diversity, equity, and inclusion is an important factor when considering an employer—especially for Gen Z and Millennial applicants who consistently report that it’s a top value they look for in a company. 

Improving Fairness and Inclusion In Hiring 

An obvious place to take meaningful action that improves fairness and inclusion in the workplace is the hiring process since it’s the gatekeeping mechanism that literally dictates who can and can’t get their foot in the door and, ultimately, work at the company. 

To tackle fairness and inclusion in hiring, HR professionals are taking action like standardizing selection criteria, assembling diverse hiring panels, paying closer attention to the language in job postings, and, most notably, creating fairer background check processes. 

But that doesn’t mean eliminating background checks altogether. After all, most resumes are estimated to include lies and misinformation, leaving employers feeling, understandably, like they need some background screening to reduce hiring risk. 

And they’re right. Background checks drastically reduce the risk of making a bad hire—hires which can, according to the U.S. Department of Labor, cost a company up to 30% of the employee’s first-year earnings or, in some cases, billions of dollars in expensive negligent hiring lawsuits.

Background Checks and Balances

Striking that fine line between wanting to protect the business from costly bad hires with the desire to create a fairer, more inclusive workplace might sound difficult, but thankfully there are laws and regulations in place that put guardrails around screening strategy.  

It’s called compliance, the guiding force that helps employers reduce risk while promoting fairness and inclusion during the screening process. 

Employer-run background checks must comply with all federal, state, and local laws. Failure to observe these regulations can result in serious fines, expensive legal action, and a negative hit to brand reputation. 

Key regulations govern when employers can conduct a background check, what level of detail they can pull, actions they can take based on results, and what to do with the information discovered. 

Most of these regulations are thoughtfully designed by regulators to prevent hiring discrimination, promote fairness, and protect the privacy of candidates; they’re a system of checks and balances that empower employers to engage in the risk management exercise of screening without violating a candidate’s rights. 

To Avoid Discrimination In Background Checks, Stay Compliant 

Nondiscrimination statutes dictate what candidate information you can seek and use, and others, like the Fair Credit Reporting Act (FCRA), set out permission and disclosure requirements for background checks. 

Mandated by the Federal Trade Commission (FTC), FCRA promotes the accuracy, fairness, and privacy of information in the files of consumer reporting agencies. 

The FCRA governs how consumer reporting agencies—and the institutions that use their data—handle and protect consumer data. In the context of employment, the FCRA dictates how employers can use credit reports, criminal history reports, driving records, drug tests, and other relevant reports created by a professional background screening service, particularly when it comes to taking adverse action on a candidate based on the findings in those reports. 

By following FCRA rules, employers automatically practice fairer hiring practices since—via the adverse action notice process—candidates have the chance to dispute information and provide more context to potential employers, and since_via the consent process—candidate privacy is prioritized. 

Promote Fairness In Background Checks

Similarly, at the state and local level, employers should follow all ban-the-box regulations to reduce discrimination in background screening. 

Ban-the-box is a national movement aimed at eliminating the checkbox on job applications that asks applicants if they have a criminal record. The purpose: to provide individuals with criminal histories a fair chance at obtaining employment by delaying inquiries into their criminal background until later stages of the hiring process.

Ban-the-box varies from state to state and from one jurisdiction to another and may apply differently to private, public, or both employers. Some common features of ban-the-box legislation include the timing of criminal background inquiry, individualized assessment to go beyond a criminal background report, and exemptions. 

In states like California, for example, ban-the-box laws require that employers conduct individualized assessments, allowing a candidate to provide evidence that a conviction is not related to their ability to perform a job and allowing employers the opportunity to determine whether a criminal record is specifically related to the position being applied for. 

Even in states with more lenient background screening laws, employers should consider incorporating individualized assessment and other second-chance opportunities into their screening processes to reduce discrimination and bring more fairness to hiring. 

Get the Most Out of Background Checks 

Evolving federal and state regulations are making it harder for employers to get thorough background checks, but by using a reputable background screening service—that’s accredited by the PBSA and follows FCRA compliance—employers can get the most comprehensive background check possible while still upholding ethical screening practices.  

Professional background screening companies help employers collect the maximum amount of detail about an applicant within the bounds of legal compliance. A quality, comprehensive solution, like S2Verify, will include the following services, tools, and data: 

• Social security number trace to confirm past address history. 
• National criminal file search to parse through criminal data from local, state, and federal repositories–including the Sex Offender Registry and government watch lists.  
• Sex offender criminal search to get more detailed information from public and tribal registries not included in the national criminal file search. 
• County criminal/other public records search to get county-level access to information regarding felony and misdemeanor convictions, arrests, and/or pending cases. 
• Statewide criminal/public records search to get state-level access to conviction records. 
• Federal criminal/public records search to get access to federal-level crimes, including kidnapping, drug trafficking, bank robbery, embezzlement, counterfeiting, and other “white collar” crimes. Crimes involving the crossing of state borders should also be included. 
• Driving records and motor vehicle records search for applicants that will operate a motor vehicle, including a company car or forklift. 
• Employment verification to confirm a candidate’s references and work history. 
• Education verification to validate a candidate’s degree or GED earned from an accredited institution. 
• Credit report to get insight into a potential hire’s financial distress that might indicate risk of theft or fraud. 
• Professional license verification checks a candidate’s credentials for roles that require a license to practice the profession. 
• Drug screening services make it easy for candidates to schedule and complete a drug test at an official collection site. 
• International screening services and consultations to help you hire top talent from across the world and navigate variable international hiring/employment laws.

Often equipped with knowledgeable, in-house compliance experts, a reputable background screening service will help employers collect all this information while sorting through the complexities of federal, state, and local laws around background screening. 

At S2Verify, for example, reporting is backed by an adjudication team proficient in FCRA compliance with criminal justice backgrounds–—by real people that help employers get the most thorough, accurate, and ethical background check possible. 

Pro tip: a great way to evaluate whether a service can accomplish this is by checking the status of its Professional Background Screening Association (PBSA) accreditation status. 

PBSA accreditation is a nationally recognized achievement earned by U.S. consumer reporting agencies (CRAs). It confirms that a background check service complies with all FCRA requirements and recognizes a screening company’s commitment to excellence in information security, legal and compliance, client education, researcher and data standards, verification service standards, and business practices. 

Streamline Candidate Communication and Ensure Transparency 

On that note, fair and responsible background screening requires thorough and timely communication at several stages of the process. 

For example, in order to stay compliant, employers must get signed candidate consent before completing a background check (which requires back-and-forth communication that might eat up some precious time) and must notify candidates about any adverse action (plus the reasons behind it) prior to eliminating them from the running. 

One of the most important ways that a professional background check service can support fair, inclusive, and compliant screening practices is by providing top-notch communication solutions through ATS integrations and notifications and via mobile products. 

Swifthire Mobile, for example, helps employers keep applicants informed throughout the entire process, without lifting a finger, by sending notifications to candidates about real-time progress. 

Plus, taking a mobile-first approach allows candidates to provide relevant background data instantly, schedule drug screening from their phones, and more—cutting down on the time it takes to complete a check and providing more value to employers. 

Training HR Professionals on Fair and Inclusive Hiring Practices 

Optimizing the background screening process to solve for risk, fairness, and inclusion all at once requires an informed and agile human resources team.

As such, employers should ensure that all HR professionals and hiring managers know the proper procedures for conducting background checks at the organization, including how to work with the selected background screening partner, communicate with the candidate, maintain confidentiality, and adhere to legal requirements. 

Learning and development around compliance and screening best practices should be ongoing in order to keep up with changing laws and industry standards. To cultivate a culture of inclusivity in your workplace, consider leading internal discussions about the benefits of hiring people with a criminal record.

Continuous Evaluation and Improvement

An optimized background screening process will thoroughly vet a candidate’s credentials and history and respect their rights and individual backgrounds. Achieving this balance is difficult, but employers can do just that by defining success metrics, consistently measuring against those metrics, and taking action to get better over time consistently. 

Further, the dynamic nature of regulations, societal norms, and business needs necessitates the continuous evaluation and improvement of background screening programs. Regular evaluation ensures that screening remains compliant with all applicable laws, aligns with the company’s values, and adapts to the evolving landscape of the workforce.