Guide to Auditing and Improving Your Background Screening Program

Facilitates compliance with new and existing regulations

On an almost daily basis, states, counties, and other municipalities are introducing new laws affecting how organizations conduct background checks. Regulations set by the Fair Credit Reporting Act (FCRA), as well as laws such as “ban the box” and salary bans, require organizations to continually monitor background check requirements across all hiring locations, including instances when laws conflict between and within states. Many organizations struggle to keep track of changes and how to adjust hiring practices accordingly. According to one study, 52 percent of surveyed business executives expressed concern about the compliance challenges presented by background check laws².

Your background screening provider may already be sharing legislative updates and helping you understand how those laws affect you, but an audit helps to make sure all bases are covered. An audit of a background screening program evaluates related policies and practices and determines compliance with existing regulations, including:

• Checking for use of the most up-to-date FCRA-approved disclosures and authorizations, which is one of the most common areas for companies to fall out of compliance.

• Reviewing job applications for compliance with “ban the box” laws, which restrict organizations from asking about applicant criminal history

• Asking about pay equity practices, including making sure that interview practices do not include asking candidates about their salary history (a practice that is now restricted in 18 states and 20 localities)³

• Reviewing drug screening practices for compliance with the 33 states that have legalized medicinal or recreational marijuana use or both⁴

Identifies practices that have fallen out of step with internal policy

Hiring practices change and evolve over time, and an audit can help to identify areas where those practices are no longer in sync with internal policy. For example, a startup organization that has grown and expanded its hiring program will have different background screening needs over time and will therefore need to revisit internal policies to be sure they match current processes. Similarly, an organization that upgrades the educational or skill requirement for specific roles will find that background screening practices (for example, education verifications) will need to be adjusted to match the new requirements.

In some industries, alignment of background screening practices with internal policy is more than a good idea; it’s a requirement for continued business operations. In healthcare, for example, accreditation by the Joint Commission requires that organizations conduct background checks in accordance with the law and organization policy.⁵ Some of the areas in which an audit can evaluate the relationship between background screening practices and internal policy include:

• Screening the non-employee population—do the background screening policy and procedures for contractors, interns, and volunteers mirror the policy for employees?

• Adverse actions—is there alignment between adverse action policy and practice?

• Post-employment screening—is there a consistently applied policy and procedure for conducting background screening and license monitoring for existing hires?

Examines current background screening products and services

Whether your background check program includes a mix of products and services for different job types or every prospective hire undergoes the same kind of background check, it is important to carefully review your current program. Just as you don’t want to overpay for background screening services you don’t need, you also want to be sure background checks aren’t missing any key components. An audit will take into account your budget, type of positions, and organizational goals, and recommend the mix of products and services that deliver the most value and help you manage hiring risk.

Without being aware of it, an organization can be using a set of background screening products and services that may have made sense at one time but are no longer the most effective solution. An audit can evaluate what kind of preemployment and post-employment background check services are being used, which make the most sense, and which should be replaced with products that are a better fit. From fingerprinting services to reference check interviews to database and public records searches, a background screening audit can help to differentiate between the products and services that are necessary and those that are just nice to have.

Conducting a background screening audit can be a smooth and stressfree undertaking, particularly if you partner with a company experienced in conducting audits in many industries and types of organizations. With a dedicated background screening partner, the process of information gathering and examining current practices can get underway and lead to the timely delivery of a comprehensive set of recommendations. As you get started, here are some key areas you can expect your audit to address:

Consistency

A successful background screening program has practices that are consistent with existing legislation and organizational policy. It also fairly and consistently conducts background checks for candidates in the same type of position. A gap analysis conducted during an audit is an important initial step in testing for possible areas of inconsistency. Once inconsistencies are uncovered in an audit, it is easier to pursue strategies for addressing them. Specific inconsistencies identified in a gap analysis can include:

• Areas where current practice is inconsistent with company policy

• Variations in background screening processes for employee and nonemployee staff

• Missed opportunities for screening employees after employment (e.g., the absence of centralized license tracking)

Compliance

The penalties for non-compliant background screening can include fines, lawsuits, and even withdrawal of federal funding. An audit examines all related background screening processes for compliance with federal, state, and local law. Examples of areas an audit explores for compliance include:

• Whether the organization is using the most up-to-date FCRA disclosure forms

• An examination of the organization’s job applications for compliance with “ban the box” laws

• A review of drug screening policies and practices for all hiring locations

• A review of adverse action processes and documents

Given the investment of time and effort by stakeholders, it will be necessary to make a plan for follow-up that sticks. Some changes can be implemented immediately, whereas others will involve technology upgrades, new policy development, or careful rethinking of existing processes. Some of the actions you can take to maximize the impact of your audit include:

• Develop a detailed background check timeline, including policy changes and process improvements

• Periodically review the mix of products and services included in the overall background screening program

• Stay alert to new legislative changes affecting your industry and hiring locations

The period following your background screening audit may also be a good time to evaluate your background screening provider. To help facilitate a robust and comprehensive background screening program that delivers value in the short and long term, you’ll understandably want more than a vendor relationship; you’ll want a true partner. A fruitful partnership will help you identify and address compliance risks, improve workflows, and implement best practices on an ongoing basis.