If you’re an employer requiring background checks then the answer is likely, yes. Class action lawsuits against employers due to improper background screenings are increasing rapidly.
These cases generally fall under a law that controls the Fair Credit Reporting Act, and in most cases, can be easily avoided. Typically the alleged violations are minor technicalities. Employers usually conduct these screenings under a good faith belief that they are following the law. However, without competent legal counsel or other expert review of practices and policies, it is inevitable that violations will occur.
Damages can range from $100 to 1,000 per violation, even if the plaintiff is not harmed. Many employers have settled cases for millions of dollars despite believing they did nothing wrong!
To avoid potentially costly litigation employers should re-examine their background check disclosure forms to ensure compliance with the FCRA, the federal law that governs background checks for employment.
One of the easiest ways to prevent threats is to utilize a quality background screening firm that focuses on educating clients and provides accurate actionable information.
Contact Courthouse Concepts to ensure you’re in compliance with the FCRA: (479) 316-2606.
Top Reasons Why Employers Should Review Their Practices:
1. Employer failed to obtain written authorization from the applicant before obtaining the consumer report.
The FCRA requires that the employer receive written consent from the prospective employee before conducting a background screening
2. Employer failed to provide a document consisting solely of the stand-alone disclosure.
The FCRA requires the employer to disclose to the applicant that a background screening may be obtained in a written disclosure and “in a document that consists solely of the disclosure.”
3. The disclosure contained a release of liability.
Many cases argue that such a release violates the FCRA.
4. Failure to provide the applicant with a copy of the consumer report and pre-adverse action notices before taking action.
Some cases involve allegations that employers have failed to provide the applicant with a copy of the consumer report, and summary of their rights under the FCRA.
5. Failure to provide a post-adverse action notice.
The FCRA requires employers to provide the applicant with a post-adverse action notice after the employer takes adverse action to communicate several required notification components.
6. Failure to update forms.
This is easily avoidable yet there have been many cases in which applicants have sued their employers had not updated their forms pursuant to the FCRA.
7. The employer’s screening policy disqualified applicants based on criminal history that is unrelated to the job.
Employers can also be sued for subjecting their applicants to an overly broad and unduly harsh criminal background check.
8. Failure to follow state specific requirements.
States have passed legislation that impacts the hiring process in specific jurisdictions.
Don’t just rely on your “gut feeling.” The more you know about the candidate, the better you will be able to assess if he/she is a fit for the position and for your company. Talent acquisition is a struggle in nearly every industry, so make sure that you’re not cheating yourself out of any of the available information before extending an offer.
It’s important to point out that better hires often means less turnover. We know that turnover is typically the number one cost to employers. Save yourself from investing in the wrong employee for the job.Aside from turnover costs, as was stated in a previous blog post Who Is Stealing From You , we know that upwards of $50 billion annually in cash and inventory is stolen by employees. Does your job candidate have a history of taking extra "perks" from previous employers?