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How to protect your business from an employee background check

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President Obama’s proposed American Jobs Act purports to offer a $4000 tax credit for hiring a worker that has been unemployed for more than six months.  

Hiring someone who has been unemployed comes with obvious questions. When sifting the unfortunate from the incompetent, savvy employers use available tools to complete the profile of a potential hire.

What can you legally find out? Online research includes: social media, criminal history, and paid sources.  I assume each online reader is proficient enough with Google, Bing or at least lycos to run an internet search; therefore, this blog focuses on Iowa criminal searches and credit checks.

One simple preliminary source is Iowa Courts Online which compiles case dockets for Iowa legal matters. As stated in a previous blog, docket information for criminal charges remains on the Iowa Courts Online website, even if the charges are subsequently dismissed.

For certified confirmation of charges and disposition, the Iowa Department of Criminal Investigations (“DCI”) certifies search requests for a fee of $15. Iowa Code provides the Department of Criminal Investigation “may provide copies . . . [of] criminal history data to . . . (1) a person . . . upon written application[.]” The available “criminal history data” includes: arrests, convictions, the disposition of charges, correctional institution information, and any adjudications.

Note, employers do not need signed authorization for a search by the Iowa DCI, but, without an authorizing signature, an employer may not receive information about arrests more that 18 months old if the arrests do not have a final disposition. Additionally, without authorization, employers will not receive information about deferred judgments.  

Employers increasingly rely on credit checks. Credit checks require signed releases. More importantly, employers must comply with specific requirements if adverse action is taken based on the candidate’s credit score. If a potential employer uses a credit score in the hiring process, the employer must disclose:

  • that a credit score was used
  • information on the credit score
  • the credit score
  • up to four key adverse factors in the score
  • the agency that provided the score

If an adverse hiring decision is made, the employee must receive:

  • a copy of the report
  • the name of the reporting agency
  • the guidelines on disputing the report

As you consider taking advantage of any incentive to hire the previously unemployed, be aware that checking criminal history and credit comes with restrictions. Make sure that your job posting clearly requires consent to these checks and that you get written authorization from the candidate. If you find anything adverse, you will save time. If you get the green light, you may find a great employee in time for an incentive under the American Jobs Act. 

Christine Branstad 

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