What Business Owners Need to Know About Hiring Employees and Background Checks

One of the most difficult facets of running a business as a small business owner is finding and keeping the ideal employees. One aspect of this is the background check. Background checks are often necessary to ensure that potential employees are honest, stable and/or have the necessary prerequisites for the job. Although employers have the right to freely require a background check for employees in New York and New Jersey, there are some regulations that small business owners should be aware of.

According to the new federal guidelines, employers are no longer legally permitted to issue a blanket "no" if the applicant in question has a criminal record. Instead, employers must determine if the record will have any effect on the applicant's suitability to the job.

The other important set of regulations to keep in mind when hiring is the Fair Credit Reporting Act. The FCRA delineates the rights consumers have to protect their credit and other personal information. The FCRA clearly states that businesses must have a "permissible purpose" in order to pull credit information while hiring. This information is important because there has been a recent uptick in lawsuits pertaining to potential FCRA violations. If you are a small business owner and are unsure whether or not you have legal permission to request a credit report, you should consult an attorney with experience in labor issues. Again, you should have a clear reason for requesting a credit report before you do so. This reason must be pertinent to the job in question.

Remember, any violations of the federal guidelines will result in monetary penalties for your growing business. The avoidance of fines and lawsuits could make the difference in the success or failure of your business.

If you have any questions or concerns about the hiring process, feel free to contact my office at (718) 313 - 7563.


- Kevin P. McKernan