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The Risks of Background Screening on Your Own

Date Published: October 21, 2014 | Last Updated:September 15, 2023 | By Accurate Background
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If you do a quick Google search for DIY background checks, you will find countless websites and articles offering “free” background screening services and how-tos for running background checks on your own. On the surface, it’s easy to see how conducting your own background checks could be enticing. “Instant” and “free” online searches give the perception that performing background checks in house with existing resources will provide you with more control over the process and cost savings. You may be considering in-house screening to get around the FCRA requirements that are mandatory when using a Consumer Reporting Agency to support your background screening. But, just because you could do something in house doesn’t mean you always should. Accurate Background has many conversations with employers who have been using internal screening programs only to realize the risks after something goes wrong.

The Risk: Uninformed Hiring Decisions

Although in-house screening exempts employers from FCRA and provides perceived cost savings, there are still very complex regulations set forth by the EEOC, state, and local jurisdictions the employer must manage with hefty fines for non-compliance. Staying abreast of complex and continually changing legislation put forth by the EEOC and relevant state and local jurisdictions is one of the biggest challenges employers face. Regulations put forth by these organizations impact the entire background screening process – from your paper application, to your disclosure and authorization forms, to your hiring criterion and the adjudication process.

Below are just a few examples of regulations that impact the criminal history portion of the background screening process.

EEOC Guidance
Under EEOC Guidance, employers are advised to exclude questions regarding criminal history from the job application and conduct an individualized assessment of the candidate before taking adverse action. While not law, neglecting to follow the guidance opens the employer up to potential discrimination litigation.

State Law

Many states impose specific requirements on employers’ use of criminal history information. For example, in California employers are not allowed to consider convictions older than 7 years, marijuana cases older than two years (involving less than 28.5 grams) or sex offender information unless the employer works with “at risk” individuals. New York on the other hand requires the employer to provide the candidate with separate notification if a criminal conviction is found and if they want to take adverse action due to their prior conviction, there are a number of factors they must consider and balance. In addition, they may only consider non-convictions except for pending actions. If the employer happens to live in one of the six states that have recently passed “Ban the Box” legislation they must also follow specific procedures when requesting and considering criminal history during the recruitment and hiring process.

Local Jurisdictions

Regulations even stem down to the local level. Under Madison, WI Equal Opportunities Ordinance, an employer may consider an applicant’s conviction within the past three (3) years of the disposition, parole, or release from confinement if the conviction is substantially job related. Or consider an employer who lives in California and San Francisco. Not only must they be fully versed in California law, but they must also follow “Ban the Box” regulations specific for San Francisco. San Francisco’s “Ban the Box” law is one of the more aggressive in the country and restricts inquiries for criminal history during recruitment, on the paper application, and during the first live interview or conditional offer, as well as applying procedures the employer must follow when making their hiring decision and adjudicating.

The above example is only a small window into a few regulations imposed on one part of the entire background screening process. It’s easy to see how an employer could make a mistake simply from being unaware of a regulation – and when they do the repercussions can be costly. Pepsi recently paid a $3.13 million settlement to plaintiffs in a race discrimination case brought by the EEOC that found Pepsi’s criminal background check policy disproportionally excluded black applicants from permanent employment. Unless you have a robust compliance and legal team dedicated just to understanding the background screening regulations, it would be very difficult to manage effectively in-house.

The Risk: Non- compliant background screening tools

Many of the employers we have met doing their own background checks are either going direct to the courts or using third-party databases to research a candidate’s background. However, the information available through these resources is often not vetted for completeness, accuracy, or compliance with Federal, State, or Local laws. Below are just a few common problems with tools regularly used by employers performing their own background checks.

  • Court records –Employers can research a candidate’s criminal record directly at the county court level, but the employer must understand that not all of the information available through the courts is legal to consider when making a hiring decision. An employer may find a criminal record that includes convictions older than allowed to be considered by the state, arrests (not resulting in convictions), expunged cases, or cases of delayed adjudication.EEOC guidelines also require the employer to consider the nature and gravity of the offense; the time elapsed since the offense, and job-relatedness.
  • State, federal, and third-party criminal record databases –Employers may also turn to criminal record databases, but not understand that the information made available here is not necessarily current or accurate (nor is it filtered for compliance). For example, the FBI master criminal database has records for nearly 77.7 million people, but many of those individuals were never actually charged or convicted of a crime (Wall Street Journal). According to the Wall Street Journal, “only half of the records with the FBI have fully up-to-date information,” and there were several examples of individuals who were listed in the database even though they never faced charges or had the charges dropped. Incorrect information can even be displayed on a candidate simply due to a typo that matches someone else’s criminal record to their name. There is no obligation on the database to correct the record.

At best, these tools are a resource for tips and leads on a potential candidate, but they can open up the employer to substantial liability risks if taken at face value. The Census Bureau is currently part of a class-action lawsuit alleging that tens of thousands of African-Americans were discriminated against because of the agency’s use of arrest records (vs. convictions) in its hiring process. The burden is on the employer to qualify this information at the original source (the federal and county courts) and have a strong understanding of the State, Federal, and Local laws that affect what information they take into consideration (e.g., arrests vs convictions). Background Screening companies reduce employers’ liability and protect the rights of the candidate by filtering and verifying information for accuracy and compliance before delivering the results of a background check. Additionally, a background screening provider will enable the employer to cast a much wider search on a potential candidate through the use of additional hiring tools, such as social security and address traces, that can identify candidate aliases and addresses that the employer may not have known to search.

The Risk: Emotionally biased decisions

If you are performing background checks yourself, it can be very difficult to ensure hiring decisions are made without emotional bias. Partnering with a background screening company reduces your liability by providing a degree of separation between your organization and the information revealed during a background check. Consider the following example: ABC Company does a criminal record search on John and discovers that he was arrested and convicted for petty theft when he was 18. The charge is over 10 years old and is not permitted to be used for hiring decisions according to ABC Company’s state law. However, the hiring manager sees this arrest and decides not to hire John because she fears he could steal from the company. This opens the company up to a potential lawsuit.

A trusted background screening company will filter information to only deliver results in compliance with federal, state, and local laws. Additionally, a Background Screening provider can support hiring decisions consistent with company policy through auto-adjudication products. Accurate Background’s Risk Reduction Technology ™ automatically reviews the results of a completed background check and assesses a recommendation based on Federal, State and company-specific guidelines.) If ABC Company had been working with a background screening provider, they would not see non-compliant results.

Weighing Benefits Against Risks

Running your own background checks can be analogized to acting as your own lawyer. It’s possible and may save you upfront costs, but your chances of ultimately losing your case are much higher. You may not have the experience, knowledge, internal resources, and technologies to provide yourself with the same protections of a third-party background screening provider. According to a 2006 SHRM study, most organizations spend “nearly 70% of operating expenses” on their workforce. One bad hire can put your company’s largest financial investment at risk. Or consider the all-too-frequent examples of employers using non-compliant hiring practices and finding themselves in the middle of multi-million dollar lawsuits. Regardless of the outcome, the damage to a brand’s reputation can be hard to repair and the expenses to challenge the lawsuit may be significant. Even without taking into account liabilities, running your own background checks is often a distraction from your business’ core products and services. If you conduct background screenings in-house you’ve taken the first step towards protecting your organization from financial and legal liabilities. But if you take the time to analyze your framework, you’re likely to find some holes in the protections you have put in place. It won’t be long before a “fox” may find them, too.


Contact: Elizabeth Fairchild

Email: marketing@accuratebackground.com


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