Employee Background Checks : How far can you go?

It is still the case that, in the US, employee background checks are considered routine (around 90% of US employers carry them out) while in Europe they are far less common, except for specified high risk roles.  Is there a move in the US towards European type rules?

US

Traditionally background checks in the US were a matter for the employer’s discretion. There was little restraint except in relation to the use of the checks for discriminatory purposes. In recent times restrictions have been growing. Several States now make it illegal to ask for passwords to social media networks. Meanwhile employers appear to be facing increasing uncertainty and risk when it comes to running general background checks. Class actions have claimed that employers were using invalid forms to obtain employee/candidate consent to the checks. Many companies use these types of consent forms and other class actions on similar lines are already in the pipeline. Court decisions have yet to resolve the issue definitively, but some indicate support for the claimants point of view.

In addition, enquiring into a candidate’s criminal record is also raising issues. The main focus is what is called the “ban the box” movement (referring to a tick box on the job application form). This movement seeks to delay the moment in the recruitment process when the question “do you have a criminal record?” is asked. The objective is to prevent employers using a criminal record as an automatic and easy bar to a job offer and so reduce the barriers faced by former felons to getting a job. Given that, according to some statistics, 1 in 4 Americans has either an arrest or a conviction on their record, this is an important social and economic matter.

Several US States and municipalities have enacted laws to ban the early stage asking of the “criminal record” question.  The approaches vary with some States banning the asking of the question on the initial application form but permitting it at first interview (where the candidate has a chance to explain), through to States which ban it until after the interview or even after conditional job offer stage.

The direction of travel would therefore appear to be towards greater regulation and stricter controls. However, US regulation is a long way from catching up with Europe.

Europe

By way of contrast, what is the position in Europe? Given its historic record as the inventor of the Inquisition and the police state (generators in one form or another of the unpromising night-time knock on the door) it should come as no surprise that background checks are nowadays closely regulated. Europe’s overarching approach is to protect the privacy of personal data.

The general rule in the EU states is that background checks can only be carried out by the employee themselves.

In France the employer can only enquire on matters directly relevant to the job in question and criminal records can be sort only in certain cases.

In Germany, the presumption is that the employee is the primary source of information but there are certain questions that a candidate can refuse to answer or even give misleading answers to. Where there are strong grounds for doing so (finance roles or childcare) third party checks are permitted with the employee’s consent.

In Italy there is greater freedom. Background checks can be carried out provided the candidate is informed of the reason for them. Credit checks are not permitted.

In the Netherlands, only data directly relevant to the post in question can be requested.

In the UK, employers need the consent of the employee to carry out background checks. However, for certain roles (e.g. childcare and vulnerable adults) criminal record checks are obligatory.

As can be seen, the rules on background checks need to be followed at local level.  In the US, they vary considerably by State and even municipality and are also currently in a state  of flux.  In Europe, despite the overarching EU rules protecting data privacy, there is considerable variation from country to country, both in terms of what checks are allowed and the process for carrying them out.