Are Your Employees Misusing Sensitive Employee Information?

{2:12 minutes to read} Many employees are privy to sensitive information such as Social Security numbers which, if used for improper purposes, can cause significant damage to third parties. Such actions can also subject companies to significant liability for employing individuals who misuse this type of information.

One effective method to minimize liability is to perform background checks on prospective employees as to their prior criminal record. In order to do so, the employer must advise the applicant in advance as to their intention of performing a background check and obtain the applicant’s written authorization.

The use of background check information is governed by the Fair Credit Reporting Act (FCRA) and/or state equivalent statutes. If a background check reveals evidence of a potential criminal history, the applicant is entitled to be notified of this finding, along with a copy of the report. The applicant must then be given a reasonable amount of time to present information refuting the finding. In the event that the information is not refuted within the prescribed time, the employer is permitted to take an adverse action (i.e., disqualify the applicant). The employer will have to notify the applicant of the action, as well as advise them of their rights under the FCRA or state equivalent statute.

Not every criminal conviction is a disqualifying event. Some states have specific rules as to what types of convictions can serve to provide the basis for adverse hiring decisions. For example, some laws require that the nature of the offense must bear a direct relationship to the type of employment that is being sought by the prospective employee.

Employers need to be vigilant to their screening processes and should consider utilizing background checks in order to minimize their liability.