So what do you do when your new hire fails their background check? Do you retract the job offer?

It's vital for HR managers to understand the changes happening in hiring and employment so they can attract and retain the best talent and remain compliant with state and federal laws. 2018 and the few years prior have seen a push for reduced bias, equal pay and more demands from a younger workforce. These changes continue to affect not only how to hire, but how to retain current employees, as well as legislative response with new employment laws.

Here's what employers can expect in hiring trends and employment legislation in 2019.

In November 2018, national retailer of pet supplies, Petco, was ordered to pay 1.2 Million dollars in a California Employment Background Screening Class Action Settlement. The case was brought against the company in 2016 when two applicants found that the employer "obtained and reviewed consumer reports" about their financial history without first obtaining consent. One applicant was hired but the other was denied employment due to adverse information on her background check report. She was not notified properly so she could dispute any inaccurate information.

With the number of Fair Credit Reporting Act (FCRA) lawsuits against employers, it's obvious that job applicants are more aware of their applicant rights than ever before. Is your screening provider giving you guidance on FCRA compliance so your organization is protected against litigation for improper adverse action?

Let's look at the case against Petco.

Whether it's your first hire or your thousandth, employers should have very clear and thorough knowledge of background checks. Pre-employment background checks are highly recommended to reduce turnover, minimize risk of negligent hiring and legal costs. At a minimum, employers should be verifying previous employment, education, criminal records, and credentials. 

The Equal Employment Opportunity Commission (EEOC) has recommendations for screening candidates that employers must also follow so they won't be responsible for punitive damages if the candidate decides to file a claim. Employers should also know what screens to ask for, how to get a faster turnaround and at a fair cost.

It's very important that we continue our mission to educate and inform our clients and readers about new regulations that may affect FCRA compliance.  We regularly share information on this blog about screening for hiring or placing tenants while explaining the importance of applicant rights. The Fair Credit Reporting Act (FCRA) specifies how to collect consumer reports, who has access and for what purpose, and that applicants should be aware of the information in their consumer reports. 

Effective this week, September 21, 2018, companies using background checks must implement new regulations pertaining to Consumer Rights and FCRA compliance.

To remain FCRA compliant, consider the following timing for sending adverse action notices.

Since the beginning of the VeriFirst blog, the goal has been to provide an educational resource and assistance to employers and property managers. Compliance is important to those who read here, as well as an awareness of the latest employment and housing laws across the nation. VeriFirst's FCRA certified staff works closely with our clients to help with hiring the right employee or placing the perfect tenant.

Bookmark this blog post as a go-to compliance guide with background check forms and templates for employment screening and tenant screening.

The Fair Credit Reporting Act (FCRA) says that individuals have a right to access the background information stored on them, no one can access it without permissible purpose (such as employment), and they can dispute any information that is wrong. Adverse action procedures are specific in protecting these consumer rights. With the rise in FCRA compliance claims, employers are doing their best to follow regulations during adverse action procedures, including rescinding a job offer. 

When a hiring manager finds an arrest or conviction on a background check, what is the best way to withdraw the job offer and remain FCRA compliant? 

As a property owner or landlord, your goal is to find a tenant who will not only pay on time but also care for your property. VeriFirst's goal, as a background check company, is to help you find the right tenant and also encourage compliance with federal regulations such as FCRA and Fair Housing laws. To stay compliant, this means honoring consumer rights but you also need to protect your business. 

When is the last time you took the time to review your tenant screening criteria?

If an employer screens applicants regularly, they should be aware of federal,  state and local laws around background checks. Businesses of all sizes are being held to these strict regulations or else they are facing punitive fines in court. Consumer rights are protected against inaccurate reporting of their backgrounds. Other laws penalize for discrimination during the hiring process. If your business is running background checks, your hiring and screening policies should be consistent and compliant.

Is your employee screening policy in compliance? Review these laws to find out.