There were several questions after yesterday’s webinar, What Employers Need to Know About Background Checks. I thought it might be helpful if I reviewed them here.

Q: When a government entity performs a security clearance, does the FCRA apply?

A: The answer depends on where the entity is getting the information used in making the clearance decision. Government entities aren’t explicitly exempted from the Fair Credit Reporting Act. If a government entity procures a consumer report (i.e., a background check) for an employment purpose from a company in the business of providing consumer reports, then the FCRA would generally apply. However, if the government entity simply obtains information from its own files or goes straight to the original sources of records (courts, state agencies, former employers, schools) without using  a consumer reporting agency, then the FCRA would not apply.

Q: How have the economic problems of the last 4 to 5 years created problems with financial checks?

A: Certainly many people with good intentions have had trouble paying their bills since the 2008 financial meltdown. Many people have lost their jobs, making it difficult to meet their financial obligations and resulting in slow payment histories, cancelled accounts, or even collection accounts. Job loss also affects individuals’ access to health insurance, leading to more instances of medical bills going to collections. All of these items may show up on a credit report.

This is one reason that many state legislatures and the EEOC are reviewing employers’ use of credit reports in making hiring decisions. As stated in yesterday’s webinar and focused on even more in next week’s Background Checks Under Fire: Policy Considerations to Avoid Discrimination Claims webinar, credit reports often are not as predictive of future on-the-job behavior as many employers seem to believe.

No valid correlation has been made between credit history and job performance. According to the most cited study, individuals with negative credit items are no more likely than those with better credit histories to have job performance problems or to steal from their employer.

Q: Mike, you mentioned that in most states we can check  7 or 10 yrs for criminal history. Our paperwork states the number of years we go back being 7 or 10 depending on the client.  If the background company comes back with something that is outside of these years should we get another authorization document?

A: My question is why would your current authorization include any limitation as to how far back you are going to review records? Why tie your hands that way. Certainly, you can think of criminal offenses that should at the very least be considered when determining if an individual is a good fit for certain positions in your firm. I recommend that employers not be that specific in their disclosure and authorization documents – there is no requirement for it.

To answer your question more specifically, however, would require me to look at your existing document. If your existing authorization does limit the scope of the background check to a certain number of years, then you should probably avoid obtaining records outside of that scope. It would seem that you have already violated the terms of the authorization when you receive the record that is outside of the authorized scope.