April 22nd, 2024 | Sterling

Key Compliance Considerations When Building A Thorough Background Check Policy

If your organization conducts background checks, you should create a documented background screening policy. A robust policy has many benefits, including:

  • Keeping your program consistent
  • Maintaining transparency with your employees
  • Preparing you to respond to privacy complaints
  • Helping you avoid inadvertent human rights violations

While large companies frequently have entire departments dedicated to ensuring that activities in the organization are properly documented and vetted for compliance, many small- and medium-sized enterprises simply don’t have the resources to create and maintain written policies.

As a trusted background screening provider, Sterling Backcheck provides solid best practices guidance to help our clients comply with the law and industry standards. In this article, we will go over the main considerations that HR professionals should take into account when drafting their background screening policy. If you have further inquiries, contact us.

6 Essential Questions Your Policy Should Answer:

To remain compliant and respond effectively to privacy complaints and discrimination claims, you should have a background check policy that takes into account all applicable privacy and human rights laws. You should be able to share this policy with employees, applicants, and government agencies, if needed. The policy should be able to answer the following questions:

1. Which background information is required for each position or type of position, and how will it be collected?

Employers are not always aware of the data they are collecting, which is a major privacy pitfall.  They might not know, for instance, that browsing an applicant’s social media profile counts as personal data collection, or that requiring a credit check for a position without financial responsibilities could be considered inappropriate. HR professionals and hiring managers must be sure that they know what specific information they are asking for, along with the justifications for why they are collecting it. Incorporating these details in a written policy is essential to reassure your applicants that the background check is conducted in a manner that respects their privacy and avoids unnecessary intrusion. Furthermore, it’s important to recognize that there is no one-size-fits-all background check package. Each position (or type of position) has a different risk profile. An entry-level job, for instance, does not warrant the same scrutiny as an executive hire. Be sure you are collecting the right information for each position.

2. At what point in the recruiting process is a background check completed?

It’s generally best to initiate a background check after making a conditional offer to the candidate. This saves cost, reduces unnecessary collection of personal information, and reduces the possibility of discrimination. If this does not work for your business, however, your background check policy should define when the checks are done, together with the reasoning for the timing.

3. How are applicants notified of background check requirements?

Sterling Backcheck does not complete background checks unless applicants have first been notified and have consented to the check. Other pre-employment screening activities may also require notice – for example, reviewing an applicant’s LinkedIn profile. Make sure to account for different background check elements and for the relevant applicant notifications (and consent, if necessary).

4. How is irrelevant, unnecessary, or inaccurate information handled?

Hiring managers may receive unnecessary information in a background check. Your policy should describe how this information will be filtered out without affecting your hiring decision. There should also be a process for correcting potentially inaccurate or outdated applicant information; for example, if someone has changed their legal name, or if someone disputes the result of their criminal record check and claims they don’t have a record.

5. How are background check results reviewed to make a final decision?

This may be the most critical part of your background check policy. Who will review results? The hiring manager, the HR team or an executive? What criteria will be applied to make a decision? A well-thought-out policy can help protect your organization from bad decisions and protect your applicants from discrimination.

6. How is the candidate notified of an adverse decision based on a background check?

Let’s say that the background check uncovers some information that gives you second thoughts about hiring someone. However, you’ve already made an offer. How do you plan on telling the applicant that you will rescind it? Should you give them a chance to dispute or explain the background check results before you make a final decision? In some provinces and territories, employers are required to exclude irrelevant offences from the decision-making process. Make sure you are aware of the applicable laws and regulations before you move forward. Your background check policy should ensure that your hiring process works smoothly and gives all your candidates a fair chance.

External factors that could affect compliance:

In Canada, your background screening policy must account for compliance with a number of external factors, including:

Collective agreements
If you have a unionized workforce, your relationship with those workers may be regulated by a collective agreement. Many collective agreements have provisions regarding background checks. Make sure that your policy takes them into account.

Privacy laws
Not all employers in Canada are subject to privacy laws with regard to employee (and applicant) information, but many are. As an HR professional, it’s important to understand which laws apply to you. Your background check policy should account for these laws and ensure your program complies with them. If you operate in more than one province, you may need to draft regional variations of your policy to account for differences in provincial laws.

Consumer reporting laws
Background screening companies are regulated by provincial consumer reporting laws featuring provisions affecting your organization. These provisions could be requirements about notifying applicants and employees of their background check and letting them know if you plan on withdrawing an offer or taking another adverse action based on the result of this check. These requirements and the steps you will take to remain compliant should all be outlined in your policy.

Human rights laws
Background checks may result in information being disclosed that is protected under human rights legislation. Collecting this information is not necessarily illegal, but you need to proceed carefully to ensure you limit any such collection and review and act on it with caution. Data collection should also be timed carefully to prevent accusations of discrimination; it may be appropriate, for instance, to wait until after the job offer has been extended to request the check.

Internal policies
You may have other corporate policies affecting how background checks are done, or which help ensure your background check policy is implemented properly. Your privacy policy, your employee handbook, and your data retention policy are just a few examples. When finalizing your background check policy, be sure to consult with other stakeholders to align it with other applicable policies.

You should always seek legal counsel to request a review of your background check policy before you implement it, and also to ensure all relevant rules and regulations are clearly understood and accounted for. As a trusted background screening partner, Sterling Backcheck provides best-practice guidance to help you design comprehensive and compliant policies.

Contact our experts or check out our background screening policy checklist for further guidance.

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.