Legal, regulatory issues making background checks more difficult

New HireRight survey sheds light on current trends in employment screening

HireRight, a California-based provider of employment screening services which has nearly 40,000 clients globally including half of the Fortune 100, recently released the results of its 2012 Employment Screening Benchmark Report. The report, which included responses from more than 2,200 professionals in large, medium and small companies across a variety of industries, found that recruiting and retaining qualified employees remains a huge challenge for many organizations.

Approximately 70 percent of respondents reported that they had uncovered a falsehood on a job applicant’s resume. Despite the inherent challenges of sorting through a crowded market of job seekers to match the right people with available positions, federal and state authorities have compounded matters for companies by passing new laws and rules governing how organizations can use background checks when evaluating an applicant’s qualifications.

According to Rob Pickell, chief marketing officer and senior vice president of strategy for HireRight, the employment screening landscape has changed dramatically over the past 10 years. During the first half of the previous decade, Pickell said that background screening became easier because of the evolution and implementation of technology.

"We were able to build software and leverage the Internet in a way that it was much easier for companies to develop, implement and manage a screening program," Pickell said. "Previously, I always described the period of our industry before the Internet as the fax, the phone and the feet. Can you imagine running a (screening) program for a Fortune 100 business on a global basis that is completely paper and personnel based? It would be very difficult to do it and to be in a position to ensure that the goals of your program are actually being met."  

While technology has continued to make the job of employment screening easier, Pickell said that he’s seen a change over the last three to four years with an increase in the legal and regulatory hurdles that are being placed on organizations looking to thoroughly vet job candidates.

"The regulatory and legal environment has gotten far more difficult for companies and it is really being driven by two things; a lot more legislation has been passed that impacts background screening, most typically state-based legislation… and then on the legal side, lawsuits around how companies utilize background checks have certainly gone up and I think it’s a response to the fact that unemployment is higher and anything associated with employment has a higher degree of scrutiny on it," explained Pickell.

One big legal issue that many employers find themselves having to navigate is state laws surrounding medical marijuana use. According to the survey, 78 percent of respondents said that their organization conducts some type of drug or alcohol testing. However, because at least 17 states have legalized marijuana use for medical purposes, Pickell said that it can put companies in a difficult situation.

"If a state has rendered medical marijuana use legal, it creates a very difficult dynamic for an employer because under federal law that use is still illegal," he said. "If you have a drug testing program and a drug free workplace program, you now have two conflicting sets of laws to try to rationalize."

Among some of the other legal and regulatory issues facing companies with regards to background checks, according to Pickell, include the use of credit records in evaluating job applicants, whether companies can or cannot look at a prospective employee’s social media postings and new guidelines issued by the Equal Employment Opportunity Commission. The EEOC recently said companies that use hiring policies that exclude job applicants based on their criminal histories must link specific criminal conduct and its dangers with the risk involved in the duties of the job that person is applying for or the organization could be at risk of being found to be discriminatory.

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