The Top 2 HR Related Class Action Threats in 2016Posted on: April 28, 2016
Big Settlements Over Background Check Compliance
Background checks are an important part of building excellent teams and safe workplaces. When done properly they are an invaluable tool. The practices surrounding HOW background checks are authorized, ordered, completed and utilized has come under intense scrutiny over the past few years with two items remaining at the TOP of the list of low hanging class action fruit.
It intrigues me to read the news stories and lawsuits when top quality employers are regularly forking over millions of dollars for making entirely avoidable mistakes. According to the NAPBS, a whopping 67% of employer focused cases have been attributed to the following TWO background check related compliance areas:
Number 1 – Disclosure and Authorization lawsuits dominate the headlines.
That paragraph that attempts to deflect the employers liability for the background check process, etc.? You might want to examine that practice. Did you slide in a paragraph on the employment application dealing with Consent? Both are common and both practices are very, very bad ideas. You will want to have an excellent FCRA expert attorney advise you on implementing a compliant Disclosure and Authorization form.
Number 2- Failing to follow the Adverse Action Requirements of the Fair Credit Reporting Act.
Yes, the Fair Credit Reporting Act applies directly to background checks, not just credit reports. To be clear, it should be called the “Fair Credit and Employment Screening Act”, because that is a more obvious title and might be more appropriate. You can’t adopt a policy of running background checks and not including the very specific steps that are required by federal law when you are going to use information included in a background check report to make an adverse decision about a person’s employment.
What if the background check contains erroneous information? The Adverse Action process is extremely fair and effective. If you want to win the battle for talent you will need to follow Adverse Action procedures. It will make you a better company. At the risk of repeating myself, have an excellent FCRA expert attorney advise you on implementing compliant Pre-Adverse Action and Adverse Action Notifications.
This is a simple problem to fix. Please take my advice and sit down with an expert FCRA attorney and address these two areas of compliance. The people in your company work hard to produce the earnings that insure their prosperity and the success of your company. Don’t give those earnings away because you didn’t spend a few hours perfecting your background check compliance practices with an expert.
Remember King Richard III, “My kingdom for the want of a horseshoe nail”.