The Ultimate Pre-Employment Screening Checklist

Every business does it, and every business faces a unique set of challenges because of it. It can be time consuming, frustrating, and complicated…adding unnecessary stress to a process that should be exciting.

We're talking about hiring new employees.

Starting or expanding your business should be a positive experience. But with all the confusion surrounding what is and isn’t legal in the pre-employment screening process, hiring can be tedious and, potentially, costly — both in terms of hiring the wrong people and accidentally crossing the line into illegal territory.

The pre-employment screening process doesn’t have to be an HR headache. The Equal Employment Opportunity Commission (EEOC) and Fair Credit Reporting Act (FCRA) have laid out laws when it comes to the different types of pre-employment screening options, including background checks, personality testing, drug tests, credit-history checks, and medical records. Not all of these tests apply or are necessary to every business, but we've included them in our comprehensive list below and outline when to use them.

Get ready to streamline the pre-employment screening process…

Step One: Play By the Rules and Obtain Screening Permissions

Before looking into any pre-employment screening tests, it’s important to keep the following things in mind in order to make sure what you’re doing is legal under the Fair Credit Reporting Act (FCRA).

1. Write it out. Tell the potential employee in writing that a background check may be obtained as a condition of employment.
2. Have them write it out. Before ordering a background check, get written consent from the applicant that a report can be obtained. Keep both the written request and consent on file for two years: If the applicant or employee files a charge of discrimination, you must maintain the records until the case is closed.
3. Use the information gathered only as necessary. Just because a background check reveals something about an applicant’s religious or family history does not mean you can use it to make a hiring decision. As outlined by the EEOC in Title VII of the Civil Rights Act of 1964, it is illegal for employers to use a person’s age, race, gender, national origin, religion, sexual orientation, or marital status to make a hiring decision. This extends to the interview process, too; for more information, see our article on Illegal Interview Questions Supervisors Should Never Ask Applicants.

Once you’ve ensured that you’re in the clear with these criteria, then it’s time to decide which screening processes are necessary for your hiring purposes: background checks, personality testing, medical testing, drug tests, and credit checks.

Step Two: Choose from the Checklist of Different Pre-Employment Screenings

There are a variety of pre-employment screening tests you can use when hiring new employees, but not all are necessarily crucial in making a decision. Here, we list the five most common types of screening tests, what each test entails, why you might choose to use it, and things to keep in mind regarding the test.

1. Background checks

• What it is: A background check is the most basic and efficient pre-employment screening test — and one that all businesses should use. In most cases, background checks refer to reports looking into an applicant’s criminal history. Sometimes they also include credit reports (see #5). You can learn about the types of background checks here.
• Why you might use it: It's generally always a good idea to run a background check on applicants. However, laws vary state-by-state regarding whether or not someone’s criminal history can be taken into consideration when making a hiring decision (see Ban the Box legislation for more detailed information).
• Things to keep in mind: In general, it is legal to take someone’s criminal history into consideration if they are applying to a government position, a job that involves going into peoples’ homes (house cleaners, plumbers, etc.), a job that involves children, and healthcare occupations. But it’s still critical to note that the law varies by state, county, and even city for these and other occupations. Learn more about how employers should run background checks here.

2. Pre-employment personality testing

• What it is: Some 60–70% of prospective employees in the U.S. are asked to take online personality tests during the pre-employment screening process to assess their personality, skill, cognitive ability, and other traits.
• Why you might use it: Many employers believe personality tests will help them identify people who have more than just the knowledge and skills necessary to be successful in their jobs. They see personality tests as a way to measure an individual’s emotional intelligence, which consists of the ability to perceive and express emotion, assimilate emotion in thought, understand and reason with emotion, and regulate emotion.
• Things to keep in mind: Not all psychologists are convinced that assessing workers’ cognitive abilities is worthwhile for successful hiring and the legality of personality tests is currently being debated. As of yet, there is no law against personality tests. However, there are legal considerations in using such tests. The two most significant things to consider are Title VII discrimination and discrimination under the Americans with Disabilities Act. Because of the concerns, The EEOC is investigating whether the tests discriminate against people with disabilities — particularly mental illnesses.

The uncertainty surrounding the legality of personality tests makes them a complicated issue. Carefully consider whether or not such tests are necessary for your business before requiring them. Or, consider giving a reputable psychometric test, such as the Myers-Briggs Type Indicator, after an employee is hired as a form of employee skill development and/or a workplace tolerance program, like 80% of Fortune 500 companies do.

3. Pre-employment medical testing

• What it is: In certain career fields, such as pilots, firefighters, or police officers, employers may need to obtain medical information from employees, such as vision, heart health, physical endurance and strength, and the like. This is because these positions affect public safety; in almost every other circumstance, such medical requests and requirements would be illegal.
• Why you might use it: An employer may seek information about an employee's medical condition if it is job related and consistent with business necessity, according to the EEOC. In other words, to ask for medical records, an employer must have a reason to believe that an employee will be unable to perform a job’s essential functions or will pose a direct threat because of a medical condition.

Other circumstances in which an employer can obtain medical information as part of the pre-screening process include:
1. If an employee requests accommodations due to a condition or disability that isn't obvious
2. When the employer is required to do so by another federal law (i.e. the Department of Transportation requires interstate truck drivers to meet certain medical certification)
3. When the employer offers voluntary programs aimed at identifying and treating common health problems, such as high blood pressure and cholesterol
4. When federal, state, or local laws require the employer to take affirmative action for individuals with disabilities
5. When an employer voluntarily uses the information they obtain to benefit individuals with disabilities
• Things to keep in mind: Under the Americans with Disabilities Act (ADA), employers may not ask job applicants about the existence, nature, or severity of a disability. Applicants may, however, be asked about their ability to perform specific job functions. Job offers can legally be offered or withheld based on the results of a medical examination only if the examination is required for all potential employees in similar job fields.
  
  Per the Genetic Information Nondiscrimination Act (GINA), an applicant's genetic information (including family medical history) is off limits and may not be used to make an employment decision.

4. Pre-employment drug screening

• What it is: Drug testing is a procedure that helps employers identify evidence of recent use of alcohol, prescription drugs, and illicit drugs.
• Why you might use it: Alcohol and drug abuse creates safety and health hazards and can result in decreased productivity and poor employee morale. It also can lead to additional costs in the form of health care claims, especially short-term disability claims. Requiring drug tests can deter employees from abusing alcohol and drugs, help employers avoid hiring people who use illegal drugs, and provide a safe workplace for employees.
• Things to keep in mind: Tests for illegal drugs are not subject to the ADA’s restrictions on medical examinations (see above). However, many state and local governments have statutes that limit or prohibit workplace testing unless it’s required by federal regulations (such as for jobs in the public sector).

Laws applying to the private sector generally permit non-union companies to require applicants to take drug tests. For unionized workforces, testing must be negotiated between the employer and union. No matter what, all employers should consult with legal advisors to guarantee their requirements comply with all state and local laws.

5. Pre-employment credit screening

• What it is: A credit report is a record of an individual’s credit history. It includes information about the following:
• Identity: name, Address, full or partial Social Security number, date of birth
• Existing credit: Credit card accounts, mortgages, car loans, student loans
• Public record: Court judgments, tax holds against property, whether or not the individual has filed for bankruptcy
• Inquiries: Companies or people who have requested copies of the report
• Why you might use it: Information included in credit reports provides insight into how an individual handles financial responsibilities, which could be indicators of how responsible they are in other areas of life, too.
• Things to keep in mind: In most states, it is still legal to consider an applicant’s credit history when making a hiring decision. To obtain a prospective employee’s report, you need to ask for and receive their permission in writing, per Fair Credit Reporting Act regulations.
  
  However, it’s important to know that just like with Ban the Box legislation, using credit reports to make hiring decisions is becoming a hot-button topic. Ten states have laws limiting employers’ use of credit information: California, Colorado, Connecticut, Hawaii, Illinois, Maryland, Nevada, Oregon, Vermont, and Washington. Also, in 2013, 26 states and the District of Columbia introduced bills that related to limiting the use of credit information in employment decisions.
  
  Just like with the other pre-employment screening options, it’s important to make sure the information you’re requesting with a credit report is necessary for your business.

6. Social media screening

• What it is: Scanning an applicant’s Twitter, Facebook, LinkedIn, Instagram, SnapChat, Tumblr, or other social media sites looking for clues about personality traits, drug or alcohol use, or other qualities that may or may not sway the hiring decision.
• Why you might use it: In June 2013, a survey by CareerBuilder found that more than 43% of hiring managers who vetted applicants online did not hire a potential employee based on information found online. Such information included provocative photos, posts about drug use, badmouthing a former employer, discriminatory comments, and lying about qualifications. Social media can give insight into a candidate’s behavior and personality that traditional applications and interviews can’t.
• Things to keep in mind: Looking at an applicant’s social media sites can potentially break the law by revealing information about their race, gender, religion, age, or other factors that constitute illegal discrimination in Title VII of the Civil Rights Act of 1964.
  If you decide to vet applicants via social media, here are a few things to keep in mind, as recommended by LawPractice Today, an American Bar Association publication:
• Hire a third-party vendor to do the search. It is the safest way to make sure you aren’t breaking the law. However, doing this triggers the FCRA rules that you must ask and receive permission to do such a search.
• Have a written policy. Explain in writing exactly how you will conduct the search by identifying which social media sites will be reviewed and what criteria will be considered in the hiring process (talking bad about others, aggressive or violent acts, unlawful activity, discriminatory activity, sexually explicit activity, etc.).
• Inform applicants of the search. If you’re using a third party to do it, you’ll need to inform them anyway. If you are doing it yourself, it will still save you potential legal headaches. Never ask for passwords or login credentials. It is illegal in many states and also might force the applicant to violate the site’s terms and conditions about sharing login info.
• Document everything. Keep records of all the searches performed, as well as copies of the permission requests and permission grants.

This Is a Lot. Is All This Pre-Employment Screening Really Necessary?

If you’re a small business or just have a limited budget, taking steps above and beyond the interview process — like those listed above — can seem unnecessary and daunting. But pre-employment screening should be a critical part of every hiring decision. Unfortunately, not everyone is trustworthy — and you don’t want to end up finding that out the hard way.

The U.S. Chamber of Commerce estimates that nearly 30% of small business failure is due to employee theft. 46% of employment, education, and reference checks didn't match the information the potential employee provided on his or her application, according to a Screening and Selection Index compiled by the ADP Research Institute. In fact, nearly one out of 10 background checks revealed some form of conflicting information.

The most important reason to have a pre-screening process, though, is that any business that employs workers or a direct service to the public is liable if an employee with a criminal history does harm to a consumer or another employee.

In short, it’s better to pay a little extra money up front for pre-employment screening tests than pay a lot of money later on in court.

You Don't Want to Hire the Applicant Because of Information You Found, Now What?

Alright, you’ve followed all the steps and jumped through all the hoops to make sure your pre-employment screening process is legally in the clear. But let’s say you find something out about an applicant that gives you pause. Turns out, the law states that you can’t disregard them quite yet.

Before you take adverse action based on information you discovered, the FTC requires you to do the following:
• Give the applicant a notice that includes a copy of the consumer report used to make the decision
• Give the applicant a copy of “A Summary of Your Rights Under the Fair Credit Reporting Act,” which you should have received from the company that sold you the report

After giving the applicant the notice, he or she then has the opportunity to review the report and explain — or request to have changed — any inaccurate information. He or she can also explain any negative information to you (they will not, however, be able to have the negative details deleted from their record.).

If you still decide to take an adverse employment action, you must tell the applicant (in writing):
• That he or she was rejected because of information in the report
• The name, address, and phone number of the company that sold the report
• That the company selling the report didn’t make the hiring decision, and can’t give specific reasons for it
• That he or she has a right to dispute the accuracy or completeness of the report, and to get an additional free report from the reporting company within 60 days

Considering the backgrounds of applicants is an important step in the hiring process and, in most cases, it’s not illegal to ask potential employees about such things as work history, education, criminal record, or financial history. But in order to stay on the legal side of things, it is important to make sure you’re complying with anti-discrimination laws enforced by the EEOC and FCRA.

Check with your state and municipality for laws regarding background checks and other pre-employment screening. Also, it would be a good idea to look into the ever-changing Ban the Box legislation, ways employers accidentally discriminate against employees, and illegal interview questions you didn’t know were off limits to make sure you’re staying within the law.

From there, it’s smooth sailing to hiring the perfect people for your business and continuing on a path of growth, success, and opportunity!