A bad hire can lead to more than just disappointment. Disgruntled employees may draw bad publicity; file complicated, expensive lawsuits; and even disclose or destroy sensitive data. Many employers are adding background checks to their hiring processes for these reasons. If you’re thinking about joining them, here are some dos and don’ts to follow.

What You Should Do

First and foremost, create a background check process that complies with federal laws that protect applicants from discrimination. Although several laws may come into play, the Fair Credit Reporting Act (FCRA) specifically sets out federal requirements for background checks. Under the FCRA, background checks can seek out information regarding an applicant’s creditworthiness, as well as his or her “character, general reputation, personal characteristics, or mode of living.”

The FCRA’s most fundamental requirement is that you inform job applicants, or those to whom you have made contingent job offers (the contingency being the results of the background check), of your intention to conduct a background check. Doing so should include describing the background check and getting the individual’s consent for it.

The law and regulations are very particular when it comes to inform-and-consent procedures. Specifically, the inform-and-consent form must be separate from any other materials you give to the person, so that it won’t be overlooked. Job applicants generally understand that failure to consent to the background check means they won’t get the job, so few will refuse to sign the form.

And What You Shouldn't

In their efforts to protect themselves legally, some employers might go too far in creating their consent forms. Complicated legal jargon that may confuse or mislead applicants can be problematic.

So, don’t include language that claims to release you from liability for conducting, obtaining or using the background screening report. Also, don’t require a certification from the prospective employee that all information in his or her job application is accurate.

In addition, delete any wording that purports to require the prospective employee to acknowledge that your hiring decisions are based on legitimate nondiscriminatory reasons. And get rid of overly broad authorizations that permit the release of information that the FCRA excludes from background screening reports — for example, bankruptcies that are more than 10 years old.

Only a Few

We’ve described here only a few of the dos and don’ts of conducting background checks. Work closely with your attorney to implement a proper process. We can provide further information and ideas.