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Background Checks on Prospective Employees

Hiring new employees is a potential legal minefield for a business owner. Employers must balance the privacy concerns of prospective employees and the safety concerns of employees, customers and third parties.

What different types of background checks can be performed on potential employees?

What are the justifications and reasons for undertaking doing such checks?

What are the suggested legal steps to take before performing background checks?

There are several different types of background checks that can be conducted on potential employees. Criminal background checks give an employer information on a potential employee’s past criminal convictions. A background check can be done on an applicant’s past driving record. An employer can also get information on an applicant’s credit history, as well as education and previous employment information.

Which background check depends on the type of position for which the potential employee is applying. A criminal background check should be considered when the potential employee will be performing a job that requires close contact with customers, such as a job performed in the customer’s home. In fact, under Illinois state law, many positions require a background check. For example, individuals that work closely with children or the elderly must submit to a criminal background check before they are hired. Many health care workers must also submit to such checks, as well as individuals in law enforcement or similar security positions. Other, less sensitive positions, may suggest a different type of background check. For example, an employer should consider ordering a background check on an applicant’s driving record when hiring an employee who will be required to do significant driving for the employer.

Under the legal theory of "negligent hiring" an employer may be liable for the acts of an employee if the employer knew or should have known that the person hired was particularly unfit for the job and creates a foreseeable danger to others. This potential liability to the employer for the acts of an employee makes it imperative for employers perform the proper checks on potential employees.

Concerns of privacy, however, may affect the employer’s ability to perform or order background checks. When background checks are ordered through an outside agency, the checks are usually subject to the requirements of the Fair Credit Reporting Act, which requires that before a "consumer report" is ordered, the subject of the report must be notified in writing and give written authorization. If the report is used for adverse action, such as denying employment to the applicant, further steps of notification are required. Employers that violate the Act can be sued by the subject of the report for actual damages, attorney fees, and punitive damages.

The best solution for employers seeking to reduce their exposure to liability is to obtain the consent of the potential employee to perform a background check. Once this consent is given, the applicant cannot successfully sue for invasion of privacy unless the employer goes beyond the scope of the consent. Requiring applicants to sign a simple consent form allows the employer to protect customers and third parties from individuals who may not be fit for the particular job.

Clearly, this is a potential legal minefield for every business owner. Each situation is unique and may require special consideration. For assistance in drafting the appropriate consent form for your business’ particular hiring needs and more information, contact us.