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A managed compliance background check plays an important role in helping businesses follow the law during the hiring process.
Employers must meet specific federal, state, and local regulations when they screen potential hires. These checks protect the business from legal issues and support a fair and lawful hiring environment.
In this article, we will discuss managed compliance background checks and how they work. We will also cover the best platforms for compliant background checks for your business.
What Is a Managed Compliance Background Check?
A managed compliance background check focuses on making sure that a business’s background checks follow all applicable laws. Unlike a standard background check, managed compliance keeps the company aligned with state, federal, and local laws.
The goal is to reduce the risk of mistakes that could lead to legal problems. When selecting a provider for a managed compliance background check, it’s important to choose one that offers compliance services, including:
- Criminal background checks that align with legal standards
- Accurate verification of employment history and educational credentials
- Careful use of credit reports and drug testing in a legal manner
These services offer businesses a clear path to staying compliant with complex regulations, allowing them to focus on finding the right talent without worrying about legal issues.
Understanding Federal, State, and Local Laws in Background Checks
Background checks are governed by various laws that differ at the federal, state, and local levels. Employers must follow these rules carefully to avoid legal problems during the hiring process.
Federal Laws
At the federal agency level, the Fair Credit Reporting Act (FCRA) is a federal law that plays a key role in how background checks are used. Its compliance regulations require employers to follow specific steps when using consumer reports.
For example, you must notify applicants before making decisions based on the report. When a company decides not to hire a candidate due to the report, it must follow the adverse action process, which includes sharing the report and offering the candidate a chance to respond.
The Equal Employment Opportunity Commission (EEOC) also provides guidance on avoiding discrimination during the hiring process. Employers must be careful when using information like criminal records or credit history so that it doesn’t disproportionately affect applicants from certain protected groups.
State Laws
Each state has its background check regulations, which can vary significantly. These state laws must be followed together with federal regulations enforced by the FCRA and EEOC. Some states restrict what can be asked during the hiring process.
For example, many states have passed laws that prevent employers from asking about salary history to help reduce pay inequality. Managed state compliance will enforce the restrictions on the use of criminal records, making it harder for employers to disqualify applicants based on past offenses.
Drug testing or checks for arrest records may also contribute to regulatory compliance in some states. Employers must stay updated on these laws to avoid penalties. States like California, for instance, have stricter rules on the use of background check reports, while other states may have looser restrictions.
Local Laws and “Ban the Box” Regulations
Local background check laws often add an extra layer of complexity. Many cities have passed ban-the-box laws that delay when employers can ask about an applicant’s criminal history.
These laws give applicants a fair chance by removing questions about convictions from the initial application process. Employers must follow local guidelines in conducting comprehensive background checks. Failure to do so can result in fines or lawsuits.
Cities like New York, Los Angeles, and Chicago have adopted their versions of these laws. Other local regulations may also apply, depending on where the business operates. For businesses working across multiple states or cities, keeping track of local laws is integral for avoiding non-compliance.
Top 6 Platforms for Managed Compliance Background Checks
Selecting the right platform for managed compliance background checks is important for staying compliant with legal requirements and maintaining efficiency in the hiring process.
Here are six top platforms that provide robust background screening services:
1. Stellar Background Checks
Stellar Background Checks offers access to various criminal records databases, including driving record checks for roles involving vehicle operations. We also provide employment verification, education verification, and drug testing.
We can process up to 20,000 background checks monthly, focusing on accuracy for high-volume clients. Our five service packages range from the Standard Package at $35, which includes SSN trace and criminal background checks, to the Platinum Package at $119, which adds federal criminal searches.
Results typically arrive within one to three days, making Stellar helpful for quick results. Our pay-as-you-go model offers flexibility without long-term contracts. We also have a client portal that allows background check reports to be tracked in real time.
Key Features:
- High-volume processing
- Pay-as-you-go model
- Real-time client portal for tracking results
Fill out this form and keep your screening compliant with Stellar Background Checks.
2. Accurate
Source: Accurate
Accurate offers flexible background screening options, including SSN trace, county criminal searches, global watchlist searches, and seven-year criminal history reports.
Accurate’s platform allows real-time tracking of background check progress, which helps manage multiple candidates efficiently. Their compliance tools also support international hiring needs.
Key Features:
- Real-time tracking of background checks
- Compliance tools for global hiring
- Flexible packages to suit various business needs
3. HireRight
Source: HireRight
HireRight offers comprehensive background check services, including criminal background checks, employment verification, and drug testing. It supports businesses requiring global screening in the U.S. and internationally.
Pricing begins at $36.47 for the Instant Criminal+ package, which includes criminal records checks and SSN validation. The Instant Criminal+ All Counties package, priced at $76.95, adds county-level searches for a more detailed review.
Key Features:
- Global screening capabilities
- Multiple pricing options for various checks
- Industry-specific solutions
4. Sterling
Source: Sterling
Sterling provides background checks for businesses of all sizes, including services such as criminal background checks, drug testing, and motor vehicle reports. It integrates with existing HR systems, making managing the background check process easier.
The platform also offers workforce monitoring, allowing businesses to track changes in an employee’s background post-hire. This is especially useful for industries needing continuous checks. Sterling’s pricing depends on the requested checks, and they offer customized solutions.
Key Features:
- Integration with HR systems
- Workforce monitoring for ongoing checks
- Global screening with customizable options
5. GoodHire
Source: GoodHire
GoodHire offers a user-friendly platform with transparent pricing. The Basic+ Package starts at $29.99 and covers criminal records checks, SSN trace, and sex offender registry searches. The Professional Package, priced at $79.99, adds employment and education verification.
A standout feature is the applicant portal. It allows candidates to review their background check reports for transparency between businesses and applicants. GoodHire also provides strong customer support, making the process more efficient for clients.
Key Features:
- Transparent pricing with precise package details
- Applicant portal for candidate review
- Customizable packages for business needs
6. First Advantage
Source: First Advantage
First Advantage offers various background screening services, including criminal background checks, credit history checks, and drug testing. Their solutions cater to industries like healthcare, education, and finance, providing specific screening tools for those sectors.
Starting at $29 per report, First Advantage includes features such as Form I-9 compliance and drug testing for more comprehensive onboarding solutions. Their scalable services allow businesses of all sizes to use the platform efficiently.
Key Features:
- Industry-specific screening tools
- Onboarding features like Form I-9 compliance
- Scalable services for different business sizes
How to Conduct a Managed Compliance Background Check
Conducting background checks requires following clear steps that align with various federal, state, and local laws. By adhering to the correct procedures, businesses can reduce legal risks and foster a fair hiring environment.
1. Align Background Checks With Job Requirements
One of the most important considerations is aligning the background screening with job duties. Employers should tailor the scope of the background check based on the position’s specific requirements. For example:
- A position that handles finances may justify reviewing credit reports, while a driving job may require reviewing driving records and drug testing.
- Criminal background checks should focus on offenses relevant to the role, particularly if the offense could affect the employee’s ability to carry out their duties safely or effectively.
This prevents overstepping and helps avoid unnecessary invasions of privacy while maintaining fairness.
2. Notify the Candidate Under the Fair Credit Reporting Act
Under the Fair Credit Reporting Act, employers must notify candidates in writing before background checks occur. This notification should be a separate document from the job application and must clearly explain the purpose of the background screening.
The notice should outline the types of checks involved, such as criminal history, salary history, credit reports, or drug testing. It also requires the candidate to give written consent before the check proceeds.
This step keeps the process transparent for the candidate and helps establish a clear understanding of what the employer will examine during the background check process.
3. Use Individualized Assessment for Criminal Records
Employers must follow EEOC guidelines for fair decision-making when the background check reveals a criminal record. An individualized assessment involves:
- Reviewing the nature of the crime
- Time elapsed since the offense
- Whether the offense relates to the job duties
The EEOC also emphasizes avoiding automatic rejections based solely on criminal history, which can lead to discrimination claims. Employers must take the time to review the context of the record and its relevance to the role.
4. Follow Adverse Action Procedures Required by the FCRA
When a background check leads to a decision not to hire, employers must follow the FCRA’s adverse action procedures. First, provide the candidate with a pre-adverse action notice, including a copy of the background check report and a summary of their rights.
Allow the candidate time, typically five business days, to respond or dispute the findings. If the decision stands, send a final adverse action notice with the contact details of the background screening agency. This process reduces legal risks and promotes fairness in the hiring process.
5. Store and Secure Background Check Data
Properly handling background check reports and other sensitive information is a key compliance aspect. Employers must securely store digital and physical data to prevent unauthorized access.
Sensitive data must remain protected according to state compliance guidelines. This includes information such as:
- Criminal records
- Credit reports
- Drug test results
6. Stay Up to Date on New Laws and Compliance Requirements
Federal laws, state laws, and local regulations often change, impacting how background screening is conducted. Employers must stay informed about new laws, such as:
- Updates to ban the box regulations
- Adjustments to drug testing requirements
- Changing EEOC guidance
Consult with legal counsel or work with compliance experts to remain current with regulatory requirements and avoid non-compliance. Regular updates and reviews of hiring practices reduce risks and help businesses stay aligned with both federal regulations and state compliance needs.
Verify With Stellar Background Checks
Stellar Background Checks helps companies make the winning hire with our comprehensive background check services.
We prioritize speed, accuracy, and compliance when generating background check reports to ensure you make confident hiring decisions.
Onboard top-tier talent quickly by filling out this form or contacting us at 1-800-301-4140.
FAQs About Managed Compliance Background Check
What is a managed compliance background check?
A managed compliance background check refers to a background screening process that follows legal requirements, including federal, state, and local laws. It helps businesses comply with regulations such as the FCRA and EEOC guidelines.
How does a managed compliance background check differ from a standard background check?
While a standard background check simply gathers information, a managed compliance background check focuses on compliance with legal regulations. It addresses different state and local laws, such as ban-the-box regulations that limit when employers can ask about criminal history.
What risks come with not using a managed compliance background check?
Failing to follow proper procedures during the background check process can expose businesses to risks, such as fines, lawsuits, and reputational damage. Violating regulations may lead to legal action. Businesses could also face discrimination claims if they mishandle criminal history when hiring.
How long does it take to complete a managed compliance background check?
The time it takes to complete a managed compliance background check depends on the type of check required. Simple checks, like criminal background checks or employment verification, often take one to three business days. More comprehensive searches may take longer.
