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Safe Hiring Information

FAQs Concerning Mechanics of Implementing and Conducting Employment Screening

May 23, 2010

(C)2001-2010 Employment Screening Resources.

I. Introduction
II. Mechanics of the Procedures

  1. How does an employer get the process started
  2. What forms does an applicant sign
  3. What language should be in the Employer's employment application
  4. What about asking for date of birth on forms for screening
  5. What step in the hiring process does the applicant sign the forms
  6. What step in the process should applicants be screened
  7. Are all applicants screened or just finalists?
  8. Can an employer screen some applicants but not others
  9. What positions should be screened, and what information should be requested
  10. What about hiring conditioned upon receipt of the background report
  11. How are the forms and order transmitted
  12. How long does it take to get the report
  13. How is the report sent back to the employer
  14. What should an employer do with the report when it comes back and who sees the report
  15. What if there are questions about the report
  16. What information may be legally obtained and used in the background process
  17. How does background screening relate to the Americans with Disabilities Act (ADA), EEOC rules or privacy laws
  18. Special considerations in using certain records;
      Criminal convictions
      Credit reports
      Driving record
      Discrepancies in education or     employment
  19. What does an employer do if they decide not to hire an applicant
  20. Is there the possibility of legal liability if we reject an applicant because of a screening report
  21. What about current employees
  22. How can a firm conduct pre-employment screening without interfering with recruitment or employee morale


This Special Report summarizes the mechanics of a pre-employment screening program conducted through Employment Screening Resources (ESR). Please remember that ESR's professional staff is always available to provide assistance, training or answer questions about any aspect of the pre-employment background screening process. Additional information is available on the ESR web site located at

Business depends upon their employees. Yet, a bad hire can be disastrous, even for the largest companies. Pre-employment screening is a risk management tool that can reduce or avoid:

  • Lawsuits from employees you have to terminate
    Lawsuits from third parties for negligent hiring, or from customers
    Unqualified employees
    Lost business and profits
    Time wasted recruiting, hiring and training
    Theft, embezzlement or property damage
    Workplace violence, or sexual harassment suits

Screening normally occurs after a company has decided that an applicant is a good prospect and wants to verify that their hiring assessment is correct. Screening does NOT invade an applicant’s private life. A screening and credentials verification program seeks to confirm what an applicant has done in their public or professional lives, such as previous employment, criminal and civil court records, credit history, driving records, and educational or professional credentials. An employer is entitled to obtain job-related information in order to make the best possible hiring decision.

By engaging in pre-employment screening, an employer:

Demonstrates due diligence in their hiring process--every employer has a duty to exercise reasonable care in the employment process. By taking reasonable steps, an employer gains a great deal of legal protection should a problem develop in the workplace.

Eliminates uncertainly in the hiring process--by engaging in pre-employment screening, an employer is not dependent upon whether an applicant chooses to be truthful.

Discourages applicants with something to hide--when applicants know an employer conducts pre--employment screening, applicants with something to hide will likely not apply.

Encourages self-disclosures and very open and honest interviews--applicants with some minor infraction in their background will tend to be very open about it in an interview.

With a program of pre-screening and credential verification, a business can reduce its risk of hiring the wrong employees. A business can substantially improve its chances of avoiding hires with false credentials, or who are hiding criminal records. Businesses that pre-screen find that their profitability and productivity increase. They are able to concentrate on their business strength, instead of wasting time, energy and resources terminating bad employees, fighting lawsuits, and putting out fires.

Another important consideration is for a firm to have a safe hiring program.  ESR has prepared a special report on how to audit your safe hiring practices. Safe hiring does not simply mean hiring a background firm, Safe hiring means having in-house polices and procedures.  These should include a strong Application, Interview and Reference checking policy as well.  See

As in any  HR practice, ESR strongly recommends that any screening follow the basic rule of PFFCD.  This stands for:

P-Policies and Programs: That the firm has  written safe hiring policies in place
F-Followed:  The program are followed by the organization.
F-Fair: That the programs are fair and legally compliant
C-Consistent: That program are applied in a consistent manner
D-Documented: That the policies and their application are documented.

 Mechanics of the procedures

1. How does an Employer get the process started

To get started, an employer needs to fill out a New Client Agreement. The Agreement is primarily a certification that the employer will utilize the information provided according to law. With ESR, there are no sign up fees, minimum usage or any other obligations.

The New Client Agreement indicates that the employer understands that the information can be used for employment purposes only, that all information must remain confidential, that it will not be used to discriminate unlawfully, and that the employer will follow the rules contained in the Fair Credit Reporting Act (FCRA) for the use of background reports.

ESR has prepared a special report, "How to 'comply with the Fair Credit Reporting Act in Four Easy Steps."

The FCRA rules are explained in detail in two publications that ESR has provided an employer. Under the FCRA, an agency such as ESR is required to provide these documents to an employer. They are, "Notice to Users of Consumer Reports: Obligations of Users under the FCRA." The second report is, "A Summary of Your Rights under the Fair Credit Reporting Act," directed at job applicants. The FCRA compliance is reviewed under the section, "What does an employer do if they decide not to hire the person." Both documents are available on the ESR web site at to Top)

2. What forms does an applicant sign

Employment Screening Resources can provide all the necessary forms for pre-employment screening. If an employer's attorney or legal department already has forms, those can be used. However, ESR will need to review the forms to ensure that they conform to the 1997 amendments to the Fair Credit Reporting Act. The forms must fully comply with the requirements of the FCRA as well as applicable California rules. The only form the employer provides is the applicant's actual resume and/or application when ESR is asked to check former employment or educational credentials.

Keep in mind that all of these forms can be signed online as part of the ESR PAPERLESS Applicant Generated Report System>>>

ESR will provide customized forms that have your company's information pre-printed in order to minimize the paperwork involved. The following forms are needed:

Disclosure Form--This form is required as of September 30, 1997 under the FCRA. It is necessary for any background report, whether or not it involves a credit report. Previously, release forms were contained in the back of employment applications,. Congress was concerned that applicants were not made aware that a report may be prepared. As a result of the amendments effective in 1997, a separate page is now required to perform backgrounds. The amended FCRA requires that an employer, "make a clear and conspicuous written disclosure to the consumer before the report is obtained, in a document that consists solely of the disclosure, that a consumer report may be obtained."

Release and Authorization Form

The Release and Authorization does ask for the date of birth, although the year is left optional. This issue and how it relates to the possible claim of age discrimination is discussed in the Special Report entitle, "Obtaining and Using Background Information for Applicant Screening. Date of birth cannot be placed in employment applications because there is an inference that employment decisions are based upon age. However, once an applicant has been interviewed, and an employer is interested enough to conduct a background, date of birth is only being used for identification purposes. There is no reason not to request date of birth for pre-employment screening.

It is critical that the information in the Release and Authorization be filled out completely and legibly. Any information that is incorrect or not clear will cause delay. The applicant's phone number is requested so that ESR may contact an applicant directly to clarify anything that is not clear on the form.

Employer Order Form--

Applicant Resume and/or Application

3. What language should be in the Employer's employment application

In addition to the forms supplied by ESR, an employer should also have two recommended sections in their own employment forms or applications. For employers that rely on resumes and do not have in-house standardized forms, ESR can customize its forms to add the recommended language. The language relates to criminal convictions, and truthfulness and honesty in the application process.

For suggested language concerning criminal convictions, including legal limitations and related issues, please see the ESR special report, "Criminal Records, Employment and Employment Applications."

Questions about criminal convictions protect an employer in several ways. First, it discourages applicants with something to hide. Secondly, it may encourage an applicant to be forthcoming about any problems in their past. Most importantly, should an employer locate a conviction that an applicant did not disclose in response to a direct question, then a decision not to hire may be based upon the lack of honesty.

All applications should also contain language that the application is true and correct, and that any misstatements or omissions of material facts in the application or hiring process will result in disqualification, or termination of employment. (Back to Top)

4. What about asking for date of birth on forms for screening

Special problems are created concerning obtaining an applicant’s date of birth on a screening application. Federal and State law prohibit employment discrimination on the basis of age for persons over 40 years old. Most authorities agree that any information tending to reveal age should not be requested on an application or during an oral interview. On the other hand, without date of birth, it is very difficult to perform applicant pre-screening. See:

Typically, screening firms do ask for date of birth on the release forms. That is because, an employer will ask for a screening only after some initial selection has occurred. Asking for date of birth on a release form at that point plays no role in the selection process. At ESR, additional precautions are taken. First, applicants are assured that the information on the release form is for verification of information only, and has no role in the selection process. Secondly, your applicant is also assured on the release form that all federal and state rights are respected in our screening process. Third, we urge our clients to keep the screening forms and the reports separate from the employee’s personnel file, so that there can be no inference that age played any factor in any employment decisions. Furthermore, if all applicants are asked to fill out the ESR release form, those forms should not be made available to the person or persons with hiring authority.

Our forms indicate that the year of birth is optional. However, the form also indicates that without the year of birth, there can be delays in the screening process.

Finally, on all of our reports, we edit out any information indicating age. For example, on DMV reports, we blank out the date of birth so it is not in your records.(Back to Top)




Typically, the actual screening occurs after a company has decided that an applicant is a good prospect and wants to verify that their hiring assessment is correct. However, the forms can be signed ahead of time, even if an applicant is not going to be submitted for screening.

Employers take two approaches. Many employers have all applicants sign the consent forms as part of the initial application process. There are several advantages. First, by having background forms in the standard application packet, it discourages applicants with something to hide. Secondly, applicants with a minor infraction in the past but still wish to apply tend to self-disclosure any negative information. That helps contribute to a very open interview. Third, employers find that is much easier to administer the program. If a candidate is a finalist and screening occurs, the necessary forms have already been signed.

The alternative approach is to only have the finalist sign the consent forms. Some firms use this approach if they feel that a background screening may interfere with effective recruiting. However, in this day and age, most job applicants understand that pre-employment screening is a standard business practice, and is not a reflection upon them personally. This approach requires that HR, Security or the hiring manager give the finalist the forms at a second interview. This can present administrative difficulties. However, even if forms are not filled out as part of the initial application, it is suggested that applicants still be informed that there will be a pre-employment background screening as a standard part of the hiring process. (Back to Top)

If using hthe AGR system, the applaint puts sensitive informatin such as date fo birth and social secuirty number only on the ESR web form and the employer is protected.

6. What step in the process should applicants be screened, AND

7. Are all applicants screened or just finalists?

Employers typically utilize pre-employment screening towards the end of the selection process after the field has been narrowed down, because of time and expensive involved, firms do not typically request screening on the entire applicant pool. Screening normally occur after a company has decided that an applicant is a good prospect and wants to verify that their hiring assessment is correct.

There are two directions that firms typically take. The more common approach is to have ESR performs its function after a company has decided a candidate is a finalist, or has made a conditional job offer (as explained in more detail below). The purpose of pre-screening at that point is to demonstrate due diligence and to eliminate uncertainties about an applicant.

Some firms will ask ESR to screen the two or three finalists in order to use the information in the selection process. The advantage is that a firm can make a selection with more information. The disadvantages are: a. It increases the cost; 2. It adds two to four days to the selection process, and 3. There are possible FCRA and EEOC implications that can be triggered. The FCRA implications are explained more fully in our special report, "Complying with the Fair Credit Report (FCRA) in Four Easy Steps." Essentially, if any part of the selection process involved consideration of the pre-employment background report, then the "adverse action" rules apply, which meant that the applicant has the right to receive a copy of the report and a statement of their rights. Even if the information relied upon was not negative, the rejected applicant still has rights under the FCRA.

In addition, using pre-employment reports to choose among finalists can arguably impact EEOC considerations if EEOC sensitive reports such as criminal history or credit reports were used. (See separate sections below for the EEOC considerations involved in criminal convictions and credit reports.) An argument can be made that the initial selection should be based upon job qualifications and fit only, and a pre-employment report used only to eliminate an applicant with a job related criminal history, falsified credentials or some other negative history that is uncovered.

For these reasons, pre-employment screening reports are most often utilized at the very end of the selection procedure after the company has selected a finalist.(Back to Top)




Another important consideration in administering a screening program is that once a decision is made to screen for a particular opening, ALL candidates being considered for that opening should be screened. Selective screenings could raise an inference of a discriminatory practice, particularly if the subject is a member of a legally protected group. Furthermore, all individuals who are screened should also be evaluated using the same criteria. That means that for each position, the screening level must be the same for all candidates.

However, an employer may certainly have different screening requirements for different positions. A maintenance worker would not be screened at the same level as a bookkeeper In addition, not all positions in a firm must be screened. It does not even mean that the same position in the future must be screened. A firm can decide to stop pre-employment screening in the future. However, for any particular opening, all candidates must be treated the same. (Back to Top)

9. What positions should be screened, and what information should be requested

The level of pre-employment screening a firm should utilize is normally determined by the extent of the risk involved if a firm makes a bad hire. There are two primary reasons a company would perform pre-employment screening:

To exercise due diligence in the hiring process, primarily for the protection of c-workers, innocent third parties and the public;

To protect the company from the legal and financial harm stemming from bad hire.

Due diligence: The law required that an employer exercise reasonable care when selecting new employees. There is currently no accepted industry standard as to what level of care is required in pre-employment screening. Whether a firm meet a standard of reasonableness would likely be determined based upon the totality of all the circumstances, and the testimony of expert witnesses. However, given the relatively modest cost of pre-employment screening, compared to the harm that can be caused to an innocent third party or co-worker by a bad hire, it is likely that a jury would hold an employer to a high standard. It would be difficult to defend a company against a charge of negligent hiring where the victim's attorney can argue that if the company had spent just another $20.00, some terrible crime would not have occurred.

Protecting the company: A company also needs to protect its own economic and legal interests. Companies with shareholders in fact have a duty to take reasonable steps to protect assets.

ESR has developed various level of background screening that increases in depth as the risk for a bad hire also increases. Certainly an employer is not held to the standard of a FBI level check for each hire. However, given the relatively modest cost of screening compared to the protection afforded, a firm should probably error on the side of more screening then less. The following factors may be considered: 

  • Does the position have access to money or assets
  • Does the position carry significant authority, or fiduciary responsibility
  • Does the position have access to members of the public or co-workers so that any propensity to violence would cause harm
  • Does the position require the worker to go into someone's home
  • Does the person work with a vulnerable group, such as children, the elderly or someone with a disability.
  • Would the position be difficult to replace (in terms of recruitment, hiring and training)
  • Would a falsification of skills, experience or background put the firm at risk, or lower the firms productivity
  • Would a bad hire expose the firm to litigation or financial claims from the applicant, co-workers, customers or the public.
  • What degree of supervision is the worker under.
  • Is the person full-time, or part-time, seasonal, temporary or a volunteer.

The degree of referencing may also depend upon whether the employer checks references in-house before the hiring decision is made. Some employers will have a background firm call references even if some have already been checked, just to have a record of all reference checks, and to ensure that all applicants are treated in a similar fashion. 

Using the above factors, an employer an create a risk matrix for each position.  The employer needs to consider the risk that is inherent in the position, and he amount of supervision a person is under.  

The following are some suggested screening levels:

Basic--For entry level employees, retail or manufacturing or positions where the employer has internally checked references: Recommended search: A full seven year on-site criminal records check for felonies and misdemeanor, Credit Report or Social Security and Identity check and driver's license check. The number of counties searched depends upon the above risk factors.  For the maximum protecting, an employer may consider doing ALL counties where a person has lived, worked or studied.

Standard--For more responsible positions and permanent hire: Recommended search: The Basic search above plus verification of the last three employers (and references if available) and highest post high school education.

Extended--For positions involving increasing responsibility or supervision of others. Recommended search: The Basic and Standard above, plus checking Superior Court civil cases for litigation matters that may be job related.

The IntegrityCheck--An in-depth  check for any type of position with significant responsibility, or access to cash or assets, includes everything above plus: federal court for criminal and civil cases, employment history, verification of all college degrees and professional licenses, and a check of civil lawsuits in last two county level superior courts. (Back to Top)

10. What about hiring conditioned upon receipt of the background report

An employer can make an offer of employment, or begin the employment relationship contingent upon the receipt of an acceptable background report. This may occur where an employer has a difficult position to fill and does not want to chance loosing a good candidate.

When this occurs, ESR recommends that the offer letter contain the following language;

"This offer of employment is conditioned upon the employer's receipt of a pre-employment background screening investigation that is acceptable to the employer at the employer's sole discretion."

The suggested language specifies that that the report must meet the employer's satisfaction so that there can be no debate or what constitutes a satisfactory report.  (Back to Top)

11. How are the forms and order transmitted

The Disclosure form, the Release and Authorization form, the Order form and any resume and/or application are normally faxed. In addition, employers may enter the orders themselves over the internet at ESR's web based an d secured system. In addition, it is not unusual for employers or schools to need releases as well in order to provide information to employers. (Back to Top)

12. How long does it take to get the report

will normally return reports within three full business days, based upon receiving the report by 2:00 p.m. For reports involving employment references, ESR may require an extra day because of the additional work involved.


For example, if a report is received on a Monday, the final report will be returned Thursday by 4:00 p.m., which is three full business days. In other words, ESR requires just three full business days after the day the report is received to return a completed report.

Occasionally there is a delay in obtaining information in a situation where ESR has no control. For example, if there is a potential name match in a criminal case and the court clerk must obtain records from storage, that can take longer then three days. In addition, schools may be closed during summer or holidays, or employers may not call back, or may have merged, moved or closed.  If a form from an applicant is unreadable, that can delay a report.  |

However, ESR will still produce the report on time, and indicate if an item of information is pending and why. As soon as the information is available, ESR will send a supplemental report at no charge.

Where there is a rush hire, ESR will call and give a verbal report when requested. ESR also has available a special Expedited report procedure where immediate hiring decisions must be made. Please contact your account representative for details. (Back to Top)(Back to Top)

13. How is the report sent back to the employer

Screening firms such as ESR  using state of the art art web based systems can make the reports available to their clients in real-time over the internet, 24/7.  That also allows employers to have real-time access to the exact status of the report at anytime in order to monitor progress or answer questions form hiring mangers .  The reports can also be faxed or e-mailed to the employer. The fax number indicated on the Employer Order form. The fax machine must be private and  secured.

Where a California applicant has requested that they receive a copy of their credit report, ESR will mail a copy to the applicant at the same time the employer receives the report. The report will indicate that the credit report has been sent. (Back to Top)

14. What should an employer do with the report when it comes back and who sees the report

Because the report contains sensitive and confidential information, all efforts must be made to keep the contents private and available only to decision-makers directly involved in the hiring process. The Report itself, along with the Release and Authorization forms signed by the applicant, should be maintained separately from the employee's personnel file. They should be kept in a relatively secured area, in the same fashion that medical file or sensitive employee matters are kept. These reports should definitely not be made available to supervisor or mangers (other then in the hiring process). For example, during periodic performance appraisals, an employer would not want a supervisor to have access to a confidential background report.

Typically, the reports are returned to either Human Resources or Security. They are reviewed for any negative information. If the report is clear, the hiring manager is notified, and the hiring proceeds. If there is a red flag, or derogatory information, then the information itself is shared with the appropriate decision-makers. The physical report, however, normally stays with HR or Security. This protects against confidential information being made known generally in the company. (Back to Top)

15. What if there are questions about the information

If there are any questions as to the meaning or status of information in a report, an employer should contact ESR. Our in-house criminal specialists can assist an employer with understanding and interpreting reports and criminal records. However, ESR cannot give opinions or judgments about a candidate. Our primary purpose is to eliminate uncertainty about a candidate by providing relevant and documented information that helps an employer make a decision. However, ESR does provide Human Resources policy notes where appropriate, based upon commonly accepted industry practices. (Back to Top)

16. What information may be legally obtained and used in the background process

The California Department of Fair Employment and Housing publishes a pamphlet titled, "Pre-employment Inquiry Guidelines." The pamphlet reviews what may legally be asked during an interview process or on an application. According to the Department of Fair Employment and Housing:

"It is the employer’s right to establish job-related requirements and to seek the most qualified individuals for the job."

The guidelines go on to state:

"The California Fair Employment and Housing Act prohibits any non-job related inquiry, either verbal or thorough the use of an application form, which directly or indirectly limits a person’s employment opportunities because of race, color, religion, national origin, ancestry, medical condition, disability (including AIDS), marital status, sex (including pregnancy), age (40+), exercise of family care leave for leave for an employee’s own serious health condition. The regulations of the Fair Employment and Housing Commission defines this to include any question which:

-Identifies a person on a basis covered by the Act, or

-Results in the disproportionate screening out of members of a protected group, or

-Is not a valid predictor (not a job related inquiry) of successful job performance."

In pre-employment screening, the laws have sought to achieve a balance between privacy and due diligence. Although there are a number of laws that limit, prohibit or regulate the obtaining and using of background information, there is a great deal of information an employer is entitled to obtain and use in making the best hiring decisions. All citizens have a reasonable expectation of privacy and a right to be treated fairly. At the same time, an employer has the right to make diligent and reasonable job related inquiry into a person’s background, so that the company, it’s employees and the public is not placed at risk.

Basically, an employer is allowed to obtain and use for employment decisions information from public records, schools, licensing authorities, former employers, references, or credit agencies whatever information an employer could legally ask during an interview, provided that:

The information is not legally prohibited or regulated--e.g. California law prohibits certain arrests from being considered

Does not discriminate on its face against a protected group--e.g. federal and state law prohibit discrimination on the basis of invalid criteria, such as race, religion, sex, marital status, etc;

Does not tend to screen out certain groups even if it appears neutral on its face--e.g. criminal records and credit reports can have the effect of screening out certain groups disproportionately even though they are neutral on their face.

Does not violate any privacy or legal right--e.g. all information must be obtained in compliance with the Fair Credit Reporting Act.

Is reasonably job related or a predictor of job performance-the bottom line is that all decision should have a sound business basis.

These various criteria are discussed in more detail below. (Back to Top)

17. How does background screening relate to the Americans with Disabilities Act (ADA), EEOC rules or privacy laws

There are several laws in addition to the Fair Credit Reporting Act that effect background screening. These include:

Americans with Disabilities Act (ADA)--This federal law regulates hiring of Americans with disabilities and has broad implications. In terms of background screenings, an employer may not use or obtain any information that violates the rights afforded under this law. The most obvious impact of the law relates to medical records, disabilities and worker’s compensation records that are discussed in more detail under specific services that ESR provides. ESR does not provide any records relating to medical conditions or disabilities. ESR will provide worker compensation records, but only under the strict procedures mandated by the Americans with Disabilities Act.

One occasion where the ADA (and similar state laws) may rise a concern is for criminal convictions involving drugs or alcohol. Under the ADA, an employer cannot discriminate on the basis that an applicant is an alcoholic or a former drug user. However, the ADA and similar state laws do not protect a person who is currently using drugs or abusing alcohol. Where a person is otherwise qualified for a position, and the background screening reveals a drug or alcohol conviction, an employer should carefully review the totality of the circumstances involved before denying employment on that basis. Certainly, the current use of illegal drugs is not protected. The decision may also depend upon the position in question. For driving positions, for example, an employer may certainly evaluate driving related convictions more seriously.

Federal and State anti-discrimination requirements--A number of federal and state laws make it illegal to discriminate in hiring. These include restrictions as race, color, national origin, religion, ancestry, medical condition, age, marital status, sex, or exercise of family care or medical leaves. These regulations and rulings come from The federal Equal Employment Opportunities Commissions (EEOC), local state agencies, and federal and state court rulings. At ESR, we carefully monitor our reports to ensure that no information is given to an employer that violates these various rules.

To assist our clients, we provide a copy of a publication by the California Department of Fair Employment and Housing entitled, "Pre-Employment Inquiry Guidelines." This reviews questions that an employer can and cannot ask.

Where the situation becomes more complicated is where information that appears neutral on its face is utilized in a discriminatory way. For example, credit reports and criminal records are perfectly legal for employers to obtain (provided they comply with various state and federal rules). However, there have been rulings that the use of credit reports or criminal records can tend to discriminate against certain groups. The generally accepted limitations to the use of certain types of information are discussed under each individual item. However, if your company has any questions, your legal department or employment lawyer should be contacted.

California State Laws Regulating Consumer Reports--California has two of its own laws governing consumer reports, which includes credit reports. These are the California Consumer Credit Reporting Agencies Act, and the California Investigative Consumer Agencies Act. Although there are some differences, the California laws generally follow the federal rules contained in the Fair Credit Reporting Act. One important difference is that when a California employer obtains a credit report for employment purposes, the consumer must be notified and given an opportunity to check a box to receive a free copy. ESR takes care of this legal requirement automatically for the employer.(Back to Top)

18. Special considerations in using certain records;

Criminal convictions

There are a number of limitations under California and Federal law, including EEOC policies and regulations, concerning what an employer may legally ask about or discover concerning an applicant's or employee's criminal records. It fact, it can be a misdemeanor in California for an employer to knowingly violate some of these rules. Here are some of the limitations involved.

An employer may NOT ask about arrests or detentions that did not result in a conviction

An employer may only consider convictions or pending cases;

There are certain limitations on misdemeanors, crimes that have been sealed or otherwise expunged, cases where a person participated in pre-trial diversion, or certain minor marijuana convictions;

An employer should NOT automatically deny employment due to a criminal conviction, but should consider the nature of the offense, whether it is job related, when it occurred and what the person has done since. However, an employer may deny employment if the employer can establish a business-related reason for the refusal to hire.

For this reason, ESR generally recommends that an employer not have an automatic policy of exclusion based upon certain criminal convictions. Instead, the employer can have a policy of close scrutiny of any applicant with a certain criminal history (i.e. having a felony conviction or being on probation). The difficulty is that an employer can be placed in a Catch-22 situation. If an employer automatically disqualified a person because of a criminal record, it can be argued that the applicant was denied individualized consideration and was the subject of discrimination. However, if exceptions are made, then a person with a criminal record who did not receive a job can argue that others received exceptions, but they did not. ESR generally recommends that where there is a criminal record, that the employer clearly document the individualized consideration given to that applicant, taking into the account the factors listed above. In the event of question, an employer should consult with their legal department.

Where the situation becomes more complicated is where the offense is not clearly something that disqualifies an applicant, but still raises a red flag. For example, a Driving Under the Influence conviction for a non-driving position may still be considered serious, but perhaps not job related. However, some employers may have concerns about such a conviction. (Also, see the discussion concerning the Americans with disabilities act, above.) Generally, the resolution depends upon the totality of all the specific circumstance of the person and the job. (Back to Top)

Credit reports

ESR discourages the practice of automatically obtaining credit reports for every job applicant regardless of position. It has been held that such a policy may have the effect of disproportionately screening out members of certain groups who may have bad credit. This is especially a concern if a credit report is not reasonably relevant to job function.

Obviously, where an applicant has access to cash or assets, or must exercise financial discretion, credit reports can be useful. Employers are certainly allowed to make hiring judgments based in part upon information in a credit report. It can be a gage as to how well a person can handle financial responsibility. An employer may also reasonably be concerned that a person who has excessive debts could be a security risk if they have access to cash or assets. However, when the position to be filled is entry level, and the applicants are young people, and there is supervision in the work place, there may be little need for a credit report. In that situation, a social security/identity check will normally suffice.


Federal law prohibits denying or terminating employment solely because an individual has sought the protection of the Bankruptcy Act, has been insolvent before seeking Bankruptcy or has not paid a debt dischargeable under bankruptcy. This rule furthers the goal of giving an individual a fresh start that would not be possible if a person could not obtain employment. Standard industry advice suggests that employers may, on a case-by-case basis screen out a bankrupt applicant where the history underlying the debt indicates financial irresponsibility and the position requires financial aptitude. Any screening out of an applicant due to a bankruptcy should be limited to the most compelling circumstance. If there is any question, contact your legal department or attorney.

Driving record

If hiring for a driving position, it is essential to have obtained and reviewed the DMV prior to employment. It will help eliminate an unsafe driver. If a person is employed and they have a questionable record, the employer will certainly be sued on the basis of negligent hiring.

Even if the job is not primarily a driving job, there are still a number of situations where an employee may well be driving in the course and scope of duties. An employee may be required to drive to a meeting, to pick up or obtain items for the business, attend conferences or educational courses that would benefit the employer, or to travel between offices. In any situation where an employee is arguably involved in anything work related, an employer faces liability in the event of an accident. Failure to screen a driving record, especially given how easy it is to do, places an employer in legal jeopardy;

Even if no driving is involved in the job, a DMV report provides insight into how a person discharges their responsibilities. A simple traffic ticket may have little bearing for a job that does not require driving. However, if there is a failure to appear or a failure to pay a court fine, an employer may well have questions about how an employee will follow directions on the job or discharge responsibilities if they do not obey court orders.

In addition, where a person is having difficulties with drugs or alcohol, it may well first be revealed on a DMV in the form of a DUI charge. The DMV report is a valuable tool for confirming identification. It will have the person's name and a physical description as well. The record will provide height, weight, and color of eyes and color of hair. That helps to match the individual under consideration to the name being researched.

Various laws prohibit discrimination on the basis of age. In order to provide additional protection, ESR physically removes the year of birth from a DMV report before it is transmitted to the client.

Discrepancies in education or employment

A material falsehood or omission in the employment process may well rise issues as to an applicant's honesty. Where an applicant has misrepresented their qualifications or previous experience, professional credentials or educational background, most employers will carefully consider whether they want to have a dishonest person in the workforce. Furthermore, the true applicant's true background may make them unqualified or unsuitable for a particular position.

However, before taking an adverse action based upon information in a background report, the FCRA requires that the applicant first have the opportunity to respond to the information. (See section below on, "What does an employer do if they decide not to hire an applicant.") This is particularly true when it comes to employment and education.

When it comes to employment references, there are a number of reasons that verification may not be obtained. An employer may have moved, changed names or gone out of business. The applicant may have worked there through an agency, so that the employer has no actual employment record. An applicant should have the opportunity to explain these matters.

In verifying education, it is possible that the applicant used a previous name, or that the applicant was enrolled in a special program. In addition, there have been occasions where a job applicant in fact had the credits needed to graduate but for some technical reason, did not receive the degree. (Back to Top)

19. What does an employer do if they decide not to hire an applicant

If an employer decides to take any type of adverse action regarding an application for employment, based in any way upon information contained in an ESR report, then the provisions of the FCRA come into play. At that point, it is the employer's responsibility to first provide the applicant with a copy of the report and a statement of the consumer's rights. If the applicant does not contest the report and the decision stands, then the employer must send a second notice to the applicant under Section 615 of the FCRA notifying the applicant of a number of specific rights.

An employer does NOT need to specify exactly why an applicant was rejected. The procedures set forth in the FCRA only requires that the applicant have an opportunity to review the background report prior to an adverse action being taken and be given a statement of their rights. If the decision is made final, the applicant then receives a letter indicating that the action has been made final and was based in part upon the consumer report.

However, as part of the full service packages provided by ESR, and at no additional cost, ESR will perform these services for the employer. ESR will provide all the necessary notices to the applicant. If the applicant disagrees with any of the information in the report, the applicant communicates directly to ESR. ESR will re-investigate within the statutory 30-45 days, and inform both the employer and the applicant of the results. The employer however, has no obligation to keep the position open during the re-investigation period. These matters are explained in detail in the ESR special report, "Complying with the Fair Credit Reporting Act in Four Easy Steps."

The advantage of this service is that the employer does not have to deal with a rejected applicant. From the applicant's point of view, if there is a mistake in the public records, the applicant has an opportunity to learn about and correct it. It is a fair system all the way around. (Back to Top)

20. Is there the possibility of legal liability if we reject an applicant because of a screening report

When an employer follows the procedures in the FCRA, and also makes all hiring decisions utilizing legal and job related reasons, the chances of lawsuit from a rejected applicant is minimized. However, no employer can ever make itself immune from a lawsuit. Anyone with approximately $185.00 in California for example, can go to the court and file a lawsuit. The issue is real is whether the benefits form a pre-employment screening program outweigh the risks.

Under the new procedures in the FCRA, the chances of an applicant filing a lawsuit because of inaccurate or incomplete information have been minimized. If an employer intends to take adverse action based upon a background report, an applicant must first be provided with a copy of the report and statement of their rights. Because of this procedure, an applicant will have the change to correct anything in a report that is incorrect or inaccurate. If the information is inaccurate, the applicant will have the opportunity to object and to offer a correction. At that point, the employer can proceed with the hire. Under the previous system where applicants did not have to be told that there reports contained negative or derogatory information, employers ran a greater risk of making a hiring decisions based upon incorrect information.

The relatively small chance of a lawsuit from a rejected applicant must be weighed against the probability that without pre-employment screening, a firm will almost certainty face workplace difficulties from a bad hire. Even one bad hire can severely hurt a business. Given the national statistics that one-third of all applications contain material falsehoods, and approximately 11% of job applicants have criminal records, the value of pre-employment screening has been proven. ESR is not aware of any court case where an employer has argued that they did not exercise due diligence in their hiring because they were concerned about possible litigation from rejected applicants. There have been a great many lawsuits stemming from lack of pre-employment screening, and very few claiming some sort of illegal treatment in the hiring process. (Back to Top)

21. What about current employees


When reviewing background-checking policies, the question often arises about whether current employees should be screened, or whether the policy should apply to new applicants only. 

Since the events of 9/11, many organizations are revisiting their policies concerning pre-employment background checks and safe hiring.   Employers are also increasingly concerned about multimillion-jury verdicts that have resulted from hiring individuals with criminal records that make them unsuitable for the job, or falsified credentials. In the case of a non-profit organization providing public services, there is always the issue of legal exposure if an unscreened staff member causes harm.

In addition, the need to screen current employers can be necessitated by a new contract with a customer that requires that all workers performing the contract have a background check.  It can also occur when a firm "acquires" another workforce through merger or acquisition. There can also be situations where an employer is concerned about some type of workplace misconduct, such as theft or harassment 

 There are two factors to consider in screening current employees-- legal and practical. It is perfectly legal to screen current employees as long as all of their rights are respected.  A current employee is entitled to the same legal rights as a new applicant (and if there is a union involved, perhaps even more rights).  If the background check is performed by a third party service provider, then current employees are entitled to the same rights under the federal Fair Credit Reporting Act (FCRA) as new applicants, which includes a disclosure of rights and a written authorization.  Some states have additional rules,

The practical consideration is whether the employer wants to ask existing employees to consent to a background check. The issue is one of corporate culture--not alienating employees that have been hardworking and loyal by performing background checks.

If an employer decides it is necessary to screen current employees, it is recommend that HR explain that screening is a business necessity for the good of the entire organization and not directed to any employee.  This will increase employee ?buy-in.? Equally critical is for employees to understand that all of their rights are being respected, and nothing will occur as a result of a background check until the employee has an opportunity to discuss any negative findings with the employer. Problems can arise if an employee feels powerless in the process because they are concerned about an adverse action without an opportunity to be heard.  It is crucial to tell all employees that they may come to Human Resources privately to discuss the procedure. An employee may start off talking about "privacy" concerns, when in fact there is something in their background they are concerned about.

Another consideration occurs where an employer is concerned that an exiting employee may not sign a consent form.  That has not proved to be an issue a a practical matter.  If employees have a clear understanding of how this policy helps both the employer and the employee, there is typically good employee "buy-in" However , in the event of a worst case scenario where an employee absolutely refuses to consent, an employer can take the following tack:  Let he employee know that they have the right not to consent On the other hand, the next time the employee is up for a pay rise or promotion, the employer has the right not do that.  That can be a better tactic then threatened termination. 

Another situation may involve workplace misconduct by an exiting employee, such as theft, harassment or threats of violence. The law in that area is in a state of uncertainty, and there is legislation pending in Congress to amend the FCRA to allow investigations of certain misconduct without obtaining a written consent in advance. An employer is advised to contact an attorney to determine how the FCRA impacts their particular situation. (Back to Top)

22. How can a firm conduct pre-employment screening without interfering with recruitment or employee morale

In performing pre-employment screening, it is important not to damage the bond of trust that a firm seeks to develops with their employees. Human Resources and Security departments are placed in a difficult position. On one hand, the company does not want to make bad hires. On the other hand, the company cannot afford to alienate its employees or interfere with recruiting. ESR recognizes that your employees are a valuable resource, and that the employment relationship cannot start off with an invasion of privacy. Furthermore, obnoxious background procedures will discourage good applicants. Some background investigators start with the proposition that all applicants are potential criminals until t

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