If you own or operate a business in Ohio (indeed, in any state in the U.S.), a background check is a necessary component of your hiring process. Background checks are conducted by third parties or handled by you, and during the interview process. Federal and state laws prevent you from requesting certain types of information, so it is crucial that you conduct your check within the confines of those laws. If you are in the process of hiring or promoting a new employee, here is what you need to know about running a proper background check.
What questions can Ohio employers ask?
Under the laws put forth by the EEOC, you may not ask for genetic information, nor may you request background information based on discrimination – age, race, disability, military status, etc. – but you are well within your rights to learn more about a potential employee. To that end, you are allowed to request information regarding:
- Prior experience
- Education
- Social media usage
- Financial history
- Driving record
- Medical history
- Criminal history and convictions
Some of these elements must be approached with care. For example, while you may not request genetic information about a potential employee or his or her family, you are allowed to ask potential employees if they could perform the tasks of the job (such as repetitive movements, or lifting heavy objects). As long as all candidates for a specific category or classification of the job are asked the same questions, you can proceed.
For more on Ohio’s laws regarding discrimination, please see Ohio Rev Code § 4112.02 (2016).
Criminal history and the Fair Hiring Act
Known colloquially as the “ban the box” law, the Fair Hiring Act went into effect on March 23, 2016. It applies only to public employers for requesting or considering an applicant’s criminal history. It does not, however, prohibit public employers from informing applicants about laws that would demand disqualification from a position based on certain records, nor does it stop them from hiring employees with criminal records. For instance, persons with certain criminal records would be prohibited from daycare or teaching positions. Furthermore, it does not preclude that employer from conducting a criminal background search. All it really does is stop that search from occurring before an employer is ready to make an offer.
The Fair Credit Reporting Act requirements
In Ohio, you can order a credit check on potential employees, as well as current employees seeking a promotion or a new position within the company. However, there are strict guidelines you must follow in order to remain in compliance with the FCRA. The Federal Trade Commission (which enforces the FCRA) mandates the following:
- All applicants must be told, in writing and in a “stand-alone format,” that you may use their information when making a decision about employment.
- All employers must receive written permission from an employee or applicant before they can request the report.
- Provide the company conducting the check that you:
- “Notified the applicant or employee and got their permission to get a consumer report;
- Complied with all of the FCRA requirements; and
- Will not discriminate against the applicant or employee or otherwise misuse the information, as provided by any applicable federal or state equal opportunity laws or regulations.”
If you decide not to hire an applicant, you must inform that applicant that he or she was rejected because of the background check, that his or her personal information was given to the company which conducted the check, that the company played no role in the decision-making process, and that he or she has the right to dispute the report’s accuracy. The applicant is also entitled to a free report but must request one within 60 days.
It is important to note that the EEOC has cracked down on FCRA violations over the past few years. As a result, more and more employers have found themselves on the wrong end of a lawsuit. If you conduct business in multiple states, you must ensure compliance with those states’ laws and statutes as well. Ohio may only require that you follow the FCRA, but each state has its own individual rules and regulations.
Selecting a company to run the check
If your company is relatively new, or if you have decided to switch background check firms, you may find that your options have changed over the last few years – and changed dramatically over the last decade. Depending on your needs, you may choose to hire a full-service firm, which conducts the research for you and provides you with a report. They are required to comply with the Fair Credit Reporting Act, and offer you some level of protection in terms of how the search is conducted. Carefully review the background check company’s forms and contracts. They should provide you with a degree of protection from liability if the search violates the FCRA. Make sure the outside company does not put that liability back on you. If you are a smaller company, however, you may wish to conduct the search yourself.
We caution you against this approach. While it may be less expensive, it will certainly be less efficient for you or your HR staff. Furthermore, online searches do not guarantee FCRA compliance, which could come back to bite you later. If you choose to conduct your own check, Ohio laws can protect you from lawsuits by applicants, but it really is best to leave such checks to professionals. Otherwise, you open yourself up to legal action for negligent hiring practices.
In short: do your due diligence in regard to the company you select.
Disposal of sensitive information
The EEOC requires that all information be kept for one year (or two years, in the case of educational institutions, local and state government positions, and federal contractors with at least 150 employees and a contract worth $150,000 or more.) Regardless of whether or not you hire the applicant, you are subject to the Disposal Rule, which requires the proper disposal of these reports and records. The FTC mandates that you:
- “Burn, pulverize, or shred papers containing consumer report information so that the information cannot be read or reconstructed;
- Destroy or erase electronic files or media containing consumer report information so that the information cannot be read or reconstructed;
- Conduct due diligence and hire a document destruction contractor to dispose of material specifically identified as consumer report information consistent with the Rule. Due diligence could include:
- Reviewing an independent audit of a disposal company’s operations and/or its compliance with the Rule;
- Obtaining information about the disposal company from several references;
- Requiring that the disposal company be certified by a recognized trade association;
- Reviewing and evaluating the disposal company’s information security policies or procedures.”
This blog is meant to be utilized as a general guideline for proper background checks. There are many nuances to employment law that cannot be covered in such a short space. If you have questions or concerns, you should contact a legal professional.
Gertsburg Licata is a full-service, strategic growth advisory firm focusing on business transactions and litigation, M&A, and executive talent solutions for start-up and middle-market enterprises. It is also the home of CoverMySix®, a unique, anti-litigation audit developed specifically for growing and middle-market companies.
This article is for informational purposes only. It is merely intended to provide a very general overview of a certain area of the law. Nothing in this article is intended to create an attorney-client relationship or provide legal advice. You should not rely on anything in this article without first consulting with an attorney licensed to practice in your jurisdiction. If you have specific questions about your matter, please contact an attorney licensed to practice in your jurisdiction.
