Legal Experts Weigh In: 4 Best Practices for Screening Non-Employees

First Advantage recently partnered with Franchise Times to deliver a webinar on background screening’s latest trends. Legal experts Pamela Devata, Partner at Seyfarth Shaw, and Bret Jardine, Executive Vice President and General Counsel at First Advantage, provided a high-level discussion of legal issues impacting Staffing, Franchise and other organizations with a large extended or contingent workforce populations and provided the following best practices as guidance:

1. Understand how you fit in from a screening perspective. Staffing agencies and their clients, franchisors and franchisees must consider how much control they want to have over the background screening process. There’s a trade-off. The more control you have—such as knowing exactly what was checked and how well it was checked—may increase confidence in your ability to limit your brand’s risk. Conversely, increased control may also translate to evidence in a co-employment or joint employer analysis.
2. Communicate both up-and downstream. Related to the first recommendation, companies must clearly communicate with their partners about who is managing what elements of the background screening process. The worst would be for a franchisor to assume their franchisee is managing the screening process while the franchisee is assuming the reverse—meanwhile, no candidates are actually going through the process. Similarly, staffing companies should confirm who reviews the reports and who is responsible for the Adverse Action process, Everyone in the chain of command should be aligned as to which entities handle each of the various aspects of the process to help ensure no one is left open to liability.
3. Ensure you comply with applicable laws. Not knowing or not fully understanding your legal responsibilities is not a legal defense and could result in significant financial impacts on your company. To protect your business, you’ll want to ensure that you’re well-versed in applicable laws and that you also consult a legal representative who keeps abreast of the latest case law. Some necessary regulations to keep in mind include:

Fair Credit Reporting Act (FCRA)

Equal Employment Opportunity Commission (EEOC)

Ban the Box laws or ordinances: These laws impact how and when employers may be permitted ask about a person’s criminal history. You’ll want to make sure you’re well-versed in the laws applicable to the areas in which you operate and hire.

4. Keep your paperwork buttoned up. The FCRA requires that candidates receive a clear and conspicuous disclosure that a background checked is being performed, as well as their signed authorization permitting the entities to review that report. Additionally, it’s important that these forms are reviewed by legal advisors annually and as needed in response to new case law.

With so many laws impacting this area, companies need to be acutely aware that they’re consistently following the letter of the law when it comes to background screening. Non-employee workers like those hired by Franchise and Staffing organizations add additional complexity to the process, but with the help from your trusted screening provider and your legal counsel, you can limit your risk and protect your business.