With the increasing number of employers conducting background checks, public concerns have arisen pertaining to the method, use and fairness of such checks in potentially barring applicants from employment.

First Contact HR has compiled a list of the most significant trends that are shaping the background screening industry.

Increase in State and Local Regulations

Many state and local governments are establishing laws and regulations on the use of background checks. For example, the city of Philadelphia and at least 25 other municipalities and states (including Chicago, Seattle, Atlanta, Baltimore, California, Massachusetts and Hawaii) have implemented “Ban the Box” regulations that prohibit employers from job applications that require applicants to disclose or “check a box” if they have criminal history.

EEOC Enforcement Guidance

In April 2012, the EEOC issued new Enforcement Guidance on the use of arrest and conviction records in employment decisions. As a result, employers are in effect prohibited from using “blanket prohibitions.”

against hiring individuals with any kind of criminal records, no matter how old the conviction or what the prior offense may have been.

Restricted use of Credit Reports

Many states are restricting the use of credit reports as a screening tool for employment purposes, including Maryland, California Connecticut, Oregon and Washington. These restrictions typically apply to positions that that do not have financial discretion or regular access to confidential or significant assets with the organization.

Increase in Organizations Conducting Employment Screening

Recent SHRM surveys reveal that nine out of ten employers conduct criminal background checks on some or all job applicants. Historically, background checks were costly, time-consuming and conducted on select positions. Many employers conduct background checks across-the-board using automated systems that provide fast and inexpensive results. However, unfiltered information delivered from automated systems presents an increased risk when an adverse employment decision is made based on inaccurate or incomplete data.

Increase in Diploma Mills

There was a 48% increase in diploma mills worldwide this past year with the U.S ranking at the top of world for fake college degrees. As a result, employers can expect more applicants are likely to present false evidence from unaccredited institutions to support their academic credentials. The internet is the primary source of these bogus education and accreditation providers.

Increase in Employment Screening Lawsuits

With increased public awareness of the Fair Credit Reporting Act and the various state and local laws regulating background checks, lawsuits against employers are on the rise. More claims are being filed on the grounds that employers (1) failed to protect victims by performing adequate background screening (2) relied on a background check that was inaccurate, and (3) failed to comply with the FCRA or state/local regulations.

Rise in use of E-Verify

With Federal laws mandating the use of E-Verify of all federal contractors and sub-contractors, many states have enacted their own regulation requiring use of E-Verify for certain employers. As a result, employers face a complex array of varying laws and regulations from state-to-state that makes legal compliance very challenging.

Job Seekers Conduct Personal Background Checks

Many job seekers are conducting background checks on themselves to provide a glimpse of the data that a potential employer might locate during pre-employment screening, including criminal records, employment history, credit reports and internet research.

Growing use of Social Media to Conduct Background Checks

More and more employers are conducting a basic background check on job seekers using such sources as Linkedin, Twitter and Facebook. However, there is real risk that in doing so the employer can be exposed to protected information, such as age, religion and disability data that could result in a discrimination claim.

Exporting of Personally Identifiable Information

Large background screening firms are exporting their operations overseas, and as a result transferring personally identifiable information of U.S citizens beyond the protections of U.S. privacy and identity theft laws.

Credentials Verification of Board Members and Senior Executives

Organizations are finding it necessary to vet the credentials of board members and senior executives to avoid negative publicity and shareholder lawsuits. Recent headlines are filled with stories of disgraced leaders, stepping down from roles based on embellished credentials.