Sponsored Content by Universal Background Screening.

As firms across the world come out of COVID challenges over the next few months, there will be many who will start conducting more hiring of potential franchisees and employees and possibly re-screening retuning employees.   Whether you are screening new franchisees, corporate management, developers or franchise employees, litigation has dramatically increased, due to heightened regulations and scrutiny of the background screening process by both the state and federal government and private law firms.   

Franchise organizations have high risk, especially when located in multiple states and having various hiring managers to train. There is a strong need for franchise owners and managers to understand applicable state and federal laws while standardizing their program across the organization.   Universal Background Screening has listed five important areas to review with your legal counsel to help reduce risk:

1)      Following Both Federal and State Laws Pertaining to Screening – In recent years, the government has focused more on the topic of employment screening, making sure organizations are fair and just in their practice of hiring candidates.   In April 2012, the EEOC launched updated guidance factors, emphasizing the point of mandating how organizations use criminal records and how the records impact Title VII of the Civil Rights Act of 1964, prohibiting discrimination based on race, color, religion, sex, or national origin of a candidate.    It is important for employers to follow these guidance factors as best-practice procedures to help reduce the risk of perceived and true discrimination, since these factors continue to be added in many of the recent laws/statutes.  

2)      Work with an Accredited Background Screening Firm – With thousands of screening firms in the United States, there are only a handful that have taken the time and attention to become accredited firm with the Professional Background Screening Association (PBSA).   This important accreditation certifies that an employment screening firm has been audited for proper and compliant process and procedures, securely protects private information and understands both state and federal requirements.   You should always ask your screening firm whether they have obtained this accreditation as it is one of the only recognized certifications in the employment screening industry.

3)      Provide the Proper Disclosure and Authorization Forms to a Candidate – A significant number of legal actions taken toward firms are due to organizations failing to provide the compliant candidate forms that contain the legal disclosure and authorization language.  There are a few important points to make about this form that will reduce your organization’s risk considerably:

• A candidate should always sign a compliant authorization form prior to your organization conducting a background check.  The signed copy of the candidate’s authorization form should be kept in your company files for verification, in the event that anyone ever questions the legitimacy of the authorization.
• Federal law requires that the disclosure and authorization forms have no “extraneous” information, meaning do not add additional language, even if you feel it pertains to the hiring process.  For instance, you cannot add indemnification language or ask any questions on these forms other than what is allowed by state and federal law.
• Disclosure and authorization forms should always be kept as stand-alone documents, so they are “clear and conspicuous” to the candidate.  Do not attach or merge them with other documents.  For instance, the background screening disclosure and authorization documents should never be merged into the job application form or stapled to another document.  Your background screening firm should have compliant sample forms for your review.  However, you should always confer with your legal counsel to verify that the forms are compliant and that the screening firm has sound background screening processes and procedures in place.

4)      It Is Required to Provide Each Candidate the Ability to Dispute Report Information Prior to Your Decision If Potentially Not Hiring Them – If at any time, any part of a candidate’s report influences your organization to potentially not hire a candidate, that candidate has a right to dispute the reported information for any inaccuracies.  This is known as the “Adverse Action” process and is a federal law.  Many organizations have been sued after they did not follow the federal and state required procedures, which likely could have been avoided if they had understood the simple, but required, process.   It is an excellent idea to work with your legal counsel and background screening firm to confirm that you have the proper adverse action process and procedures prepared and that your organization’s employees who hire candidates, know, understand, and follow the required procedures. 

5)      Review Your Own Policies/Procedures with Legal Counsel – It is always recommended to work with your legal counsel as often as necessary to verify that no changes to the laws/regulations pertaining to employment screening have occurred either at the federal level or in the state(s) which you conduct business in, especially if you have multi-state locations.  It is also important to understand the laws and regulations in the state where your candidate resides at the time of hire and the state they will be working in, as those state hiring guidelines apply to the candidate hiring requirements.    The periodic review of internal hiring process and procedures is essential so that your organization reduces its risk by committing to legally sound, standardized screening and hiring procedures.   You will ensure consistency in your hiring program by providing information to your employees in your written company policies and procedures manual and regularly updating hiring staff on the required practices.

 Focusing on these five areas in your background screening program will help you reduce risk of lawsuits or other unintentional consequences from inadequate process and procedures.  If any additional information is needed, we always suggest speaking with your legal counsel and you can always reach out to Universal Background Screening, as we are dedicated to providing compliant and accurate employment screening to the Franchise industry.

Dr. Alan Lasky

Senior Vice President, Sales

Universal Background Screening, Inc.

Dr. Alan Lasky is a Senior Vice President with Universal Background Screening with 21 years of experience in consumer reporting, focusing on compliance and reducing risk for franchise organizations nationwide.