March 19th, 2018 | Debbie Lamb, Sterling Talent Solutions

Spring Cleaning Your Hiring Compliance Forms

Even though the weather might not seem like it, Spring is right around the corner. As soon as the winter weather is on the way out, the cleaning process of hiring compliance forms begins. Yes, a common rite every year is refreshing the home after a long winter. Just as we spring clean our homes, companies that conduct background screening should also review the forms that they use to make sure that they are up-to-date and compliant.

Each industry will have its own regulations, rules and required forms to fill out. The background screening industry is no different. Background screening is a highly regulated industry. Job candidates are protected by various local, state and federal laws. Background screening reports are regulated under the Fair Credit Reporting Act (FCRA).

FCRA Requirements for Hiring Based on Background Screening Reports

A company must disclose to a candidate that they will be running a background check and they must receive a written authorization to do so. Organizations must also follow the adverse action process for candidates who are not hired based on the findings of the background screening report.

The FTC recommends using a simple disclosure form instead of one with “complicated legal jargon or adding extra acknowledgments or waivers.” Any extra items included on a disclosure form could make it harder for the prospective employee to understand the main purpose of the document, but it could also violate the FCRA. If extra waivers, authorizations or disclosures are needed to be read and signed by a candidate, they should be completely separate from the FCRA disclosure and authorization form. The FTC recommends having a “simple easy-to-understand notification that your company will obtain a background screening report, perhaps with a simple explanation of what information will be included in the report.” A disclosure form should consist solely of the disclosure. This form is NOT compliant if it includes:

  • Release of Liability
  • Being part of the job application
  • State Disclosures
  • Applicant Questions

It is critical to use the correct disclosure and authorization forms when conducting a background check. Sterling provides access to sample forms and other materials. Sterling’s sample form provides for continuing consent except for California which does not permit continuing consent. There is also the Federal Summary of Consumer Rights and any state-specific Summary of Rights forms that should be distributed with the disclosure and authorization forms. These forms and materials are updated from time to time, so it is important to always check the Sterling’ website to review current information. As with any sample forms, we strongly recommend that you review them with your own counsel prior to use, as the Fair Credit Reporting Act places the obligation to use compliant forms on employers. Prior materials should always be disregarded.

If a company doesn’t use the proper forms during the background screening process, there could be compliance repercussions. A class-action lawsuit was filed by 60,000 members against a North Carolina grocery chain who used allegedly illegal background check procedures. Applicants allegedly failed to receive the required stand-alone disclosure that the grocery chain was going to conduct an employment-related background check and the required notice before adverse employment action was taken based on the background check. The lawsuit resulted in a $3 million settlement.

Form Retention and Record Keeping

Spring Cleaning usually involves some purging of older clothes, unused toys or older documents that we have kept way too long. The same could be said for background screening and some personal forms. Employers should keep Disclosure and Authorization forms, Adverse Action letters and background screening reports for candidates who were not hired in a master file for five years plus the current year from the date of the background check. For those candidates that are hired, keep the information in a master file or personnel file for the same amount of time.

Form I-9

For new hires, the Form I-9 must be completed by both the new employee and the employer. The form is used to establish both identity and employment authorization for individuals (citizens and non-citizens) hired for employment in the United States. All employers must accurately complete and retain Form I-9, the employment eligibility verification form, for every person hired for employment on or after November 6, 1986, in the United States. The form can be completed electronically or on paper.

The USCIS made two updates to the Form I-9 in 2017. The major updates occurred in January 2017, with supplemental changes in July 2017. In the January Form I-9 update, USCIS introduced their fillable version of the form, which is equipped with additional features such as drop-down lists and calendars, fields validations and field instructions to guide employees and employers when completing the document on a computer. The latest version of Form I-9, v. 07/17/17 N, will expire on August 31, 2019. All U.S. employers should have transitioned to the updated version of form by September 17, 2017. The updated and most recent form can be downloaded directly from I-9 Central.

It is critical to follow the instructions for filling out Form I-9 completely and on-time to be compliant with USCIS regulations. Employees may delegate the authority to complete the form to a responsible agent. However, the employee will retain liability for any errors. This would apply to all employees, but especially for those who work remotely and are not at the office to finalize the validation of the form. Remote workers should have a level of trust with those who will verify the information for Section 2 of the Form. Form I-9 must be retained for three years AFTER the date you hire an employee or one year after the date employment terminates, whichever is later.

Commitment to Compliance

The spring cleaning of background screening forms is key to keeping companies compliant with local, state and federal guidelines and regulations. Sterling presents quarterly FCRA webinars to discuss recent and upcoming changes in state and local legislation that relates to the FCRA. Register for the Q1 2018 FCRA Webinar on March 22nd webinar to learn more about which forms you need to obtain from candidates before beginning the background screening process.

This publication is for informational purposes only and nothing contained in it should be construed as legal advice. We expressly disclaim any warranty or responsibility for damages arising out this information. We encourage you to consult with legal counsel regarding your specific needs. We do not undertake any duty to update previously posted materials.