Should You Check Your Applicant’s Financial Background and Salary History?
In today’ s competitive world, hiring smart means doing a complete background check on a prospective employee before employing them, but be aware of what background check reports you can legally use. Specifically, financial background and salary history reports are becoming more regulated, so make sure to exercise caution before using these reports.
When should you use a financial background check?
Although in most cases a financial background check may not be necessary, there are some job position requirements that may merit a check for the financial background check or credit report. Verifying a person’s financial background with a financial background check that includes past salary history is important for positions in the areas of banking, accounting, or domains where confidentiality is mandatory. While recruiting for accounting or financial responsibilities, employers obtain credit reports to provide an insight into the financial dependability of a prospect before hiring. About 60% of employers use credit reports during the hiring process according to A Society of Human Resources Management (SHRM) survey. If this is information you need, you can get approved by the credit bureaus to order these reports.
What is included in a financial background check?
The report covers identifying information like name, address, previous names, and social security number. More importantly, it reveals the debt the job applicant has incurred, including credit card debt, mortgage and car payments, student and other loans, and the prospect’s payment history- including late payments and collections. You’ll also see public records like tax liens, civil lawsuits, and bankruptcies. Keep in mind the Fair Credit Reporting Act (FCRA) requires that the recruiter or employer get the job applicant’s written authorization before running a credit report.
Changes to salary regulations
Most recently, checking on a prospective employee’s previous salary is undergoing government scrutiny in some cities. For instance, in New York City Mayor Bill de Blasio signed legislation prohibiting employers from inquiring about a prospective employee’s salary history during the hiring process to address the gender pay gap and ensure pay equity in the workplace. Be sure to check your local legislation.
Despite the legislative changes happening, if you require checking your prospect’s financial background and salary history and it fits into the legal requirements in your city, it can be tackled by AGoodEmployee.com. If you find you are able to use this information in your jurisdiction, AGoodEmployee.com can save you time checking salary information such as employment dates, previous job titles, rehire status, and history of pay increases. Our FCRA compliant and customizable employee background check services help you hire a good employee and access the information you need.
As a one-stop resource for employee background screening requirements, A Good Employee has the capability and infrastructure to conduct a verification on a potential recruit. This is especially important considering the surprising statistic revealing that 53% of job applications contain inaccurate information. Even worse, a 2013 study revealed that 27% of employers reported losses of over $50,000 due to bad hires. Our advice – don’t take risks you don’t need to take and get the best information to make a solid hiring decision.