Financial Services Resource Center for HR: Background Checks

Background checks of job applicants can be a key part of the hiring process. Financial services employers generally consider background checks to be a necessity because of the highly sensitive nature of the data their employees handle. Employers must be aware of the federal and state laws that regulate the background check process. At the federal level, the Fair Credit Reporting Act (FCRA) imposes some important procedural requirements on employers that cannot be overlooked. Among other things, these requirements include giving all applicants notice that the employer would like to conduct a background check and obtaining their written consent before proceeding. Several states have laws that are more restrictive than the FCRA. Additionally, at the state level, employers generally can be held liable if, at the time of hiring, the employer had reason to believe that hiring the individual would create an undue risk of harm to others. Background checks can be used to avoid negligent hiring liability and show the employer did its due diligence.

XpertHR provides the following resources to assist financial services employers' background check procedures and issues: