Best Practices in Background Check Data Security and Compliance for Employers

Navigating a Complex Landscape 

In today's digital age, the employment background screening industry faces increasing challenges related to data security and privacy. As organizations strive to make informed hiring decisions, they must also navigate a complex landscape of regulations designed to protect candidate information and promote fair hiring practices. This blog post explores the critical need for data security and privacy in background screening and highlights the importance of compliance with the Fair Credit Reporting Act (FCRA) and various state legislations, including Fair Chance, Ban the Box, and Pay Equity laws to ensure your background screening program not only meets your employment risk mitigation goals but also remains secure and legally compliant.

The Need for Data Security and Privacy 

Employment background screening involves researching and processing sensitive information about job candidates, such as criminal history, credit reports, and employment records. The process of background screening often involves collecting sensitive candidate data like their social security number, date of birth, and driver’s license number. Protecting this data is paramount to maintaining candidate trust and avoiding legal repercussions if it is viewed or utilized outside of its authorized use. Data breaches can lead to identity theft, financial loss, and reputational damage for both candidate consumers and the organizations subject to the breach.

To safeguard candidate information, organizations should implement robust data security measures, including encryption, secure data storage, intrusion testing and regular security audits. Limiting access to sensitive data to authorized personnel only and ensuring secure data transmission are also essential practices. Personally identifiable information (PII) should be truncated, and full access should be limited to defined, critical need. Further, it is imperative to ensure your background screening provider or consumer reporting agency (CRA) also maintains robust data security practices to protect your company data, including processes, controls and use of secure technology to safeguard your candidate and employee PII.

Training is an important aspect of overall data security and secure handling of sensitive information. Employers should engage in ongoing staff training to promote safe practices within their organization. They should also be diligent in requiring their CRA partners to provide assurances they maintain ongoing data protection and security training programs for their staffs. According to a SANS cybersecurity resource platform report, absence of adequate employee training is responsible for 80% of company data breaches.

Compliance with the Fair Credit Reporting Act (FCRA)

The Fair Credit Reporting Act (FCRA) is a federal law that regulates how consumer reporting agencies (CRAs) collect, use, and disseminate consumer information. Compliance with the FCRA is crucial for organizations conducting background checks, as it ensures the accuracy and privacy of the information provided.

Under the FCRA, CRAs must establish written policies and procedures to ensure the accuracy and integrity of the information they furnish. This includes conducting reasonable investigations of consumer disputes and updating information as necessary. Employers must also obtain written consent from candidates before conducting background checks and provide them with a copy of the report if any adverse action is taken based on the findings. While many of the requirements set forth in the FRCA for conducting background screening for employment purposes are bore by employers, partnering with a security and compliance-focused consumer reporting agency (CRA) is critical in not only preventing reputational harm and financial penalties for non-compliance. It can also lighten workloads for HR teams in engaging secure technology solutions to ensure every requirement is met with each background check conducted.

Pay Equity Legislation 

Pay equity laws are designed to eliminate wage discrimination based on gender, race, or other protected characteristics. These laws require employers to provide equal pay for equal work and promote transparency in compensation practices.

All 50 states and the District of Columbia follow the Equal Pay Act of 1963, which prohibits pay discrimination based on sex. However, many states have enacted additional pay equity laws that address modern workplace challenges. For example, some states require employers to disclose salary ranges in job postings, prohibit inquiries about salary history, and mandate regular pay audits to ensure compliance.

Conclusion 

The employment background screening industry plays a vital role in helping organizations make informed hiring decisions. However, it is equally important to prioritize data security and privacy to protect candidate information. Compliance with the FCRA and state legislations, such as Fair Chance, Ban the Box, and Pay Equity laws, is essential to promoting fair hiring practices and maintaining candidate trust. By implementing robust data security measures and adhering to regulatory requirements, organizations can navigate the complexities of background screening while upholding the highest standards of integrity and fairness.

Want to learn more about how AccuSourceHR Workforce Solutions aids employers in protecting sensitive data while conducting legally compliant background checks to achieve their risk mitigation goals? Contact us today!