Can background checks be conducted on current employees?

Excerpted from JDSUPRA By Haynsworth Sinkler Boyd, P.A

Most employers run background checks on prospective employees when hiring. Some employers have policies in place that allow them to conduct background checks on current employees. Below are several examples of instances in which employers may choose to do so:

• Belief that a current employee has been arrested
• Security threats – when an employer feels that an employee is putting others at risk based upon reports of that employee’s conduct or other reasonable suspicion
• Harm to business – conducting a background check may help the employer prevent harm to the business, such as theft or violence
• Insurance reasons – Insurance carriers may require an annual Driver License Motor Vehicle Report (MVR) check on employees who operate company vehicles

Any time an employer uses an employee’s background information to make an employment decision, regardless of how they received the information, the employer must comply with federal laws, enforced by the Equal Employment Opportunity Commission (EEOC), that protect applicants and employees from discrimination. In order to comply with the EEOC, an employer must apply the same standards to everyone, regardless of their race, national origin, color, sex, religion, disability, genetic information (including family medical history), or age (40 or older). The EEOC also advises that employers should take special care when basing employment decisions on background problems “that may be more common among people” of those protected groups. In addition, when an employer runs a background check through a company in the business of compiling background information, the employer must comply with the Fair Credit Reporting Act (FCRA), enforced by The Federal Trade Commission (FTC). Finally, if an employer plans to run a credit report, the employer must comply with the FCRA regardless of whether it is done by the employer or a third party.

Before an employer requests the background check, it must obtain consent from either the prospective or current employee. Technically, if an employee signed a consent form to allow a background check when the employer hired them, it may be written in a way that the consent is valid, unless it is revoked by the employee. However, some states require that consent is obtained every time there is a background check performed. South Carolina does not have such a law. If an employer is going to run ongoing background checks on its employees, a best practice is to make this known from the initial hire date.

Best practice dictates that employers should set a policy where every employee will be subjected to a new background screening annually.

Finally, the employer should have a clear policy on what types of findings and records will be grounds for termination. Always provide the employee with a notice that includes a copy of the consumer report the company relied on to make that employment decision and allow them an opportunity to review the report and explain any negative information. While a current employee’s criminal record will not necessarily be grounds for termination, employers will need to decide whether the findings are relevant to their business’s needs and the employee’s ability to do the job.