|
|
|
|
 |
|
|
|
|
 Businesses with employees must comply with numerous regulatory, tax
and insurance issues. Some businesses
attempt to avoid these issues by engaging independent contractors rather
than hiring employees or by classifying permanent workers as independent
contractors, not as employees. Both Federal and state regulations govern
worker classification. Make sure you fully understand them. Heavy fines
may be imposed if you misclassify people who work in
your business and you may have to pay outstanding back employment-related
taxes.
For a list of the primary agencies you
need to contact when you have employees or independent contractors, do a search
using the Business
Wizard. In Section 3, choose "Employee, Independent Contractor, or
Both."
Following is a list of most of the issues businesses in
Idaho may encounter
when hiring or working with employees or independent contractors.
For a
brief description of an issue and a link to the related website, click on the
name of the agency or activity.
Bureau
of Occupational Licenses
The
Bureau of Occupational Licenses examines and licenses employees and
business owners who are engaged in 28 professions. If you or your staff
members are required to be licensed and are not, you could be held
liable for any consequences set forth by your professional licensing board.
For a list of professions licensed by the BOL, visit their
website at
http://ibol.idaho.gov/IBOL/Home.aspx. Occupations not managed by the
BOL may be licensed by their specific occupational board,
such as the Board of Medicine, Idaho Department of Insurance, Idaho
Department of Finance, or State Bar. To
find a list of these agencies, visit http://www.accessidaho.org/business/licensing.html.
Some professionals may
be able to renew their licenses on-line at
https://secure.ibol.idaho.gov/eIBOLRenewal/login.aspx?ReturnUrl=%2feIBOLRenewal%2fdefault.aspx.
Idaho Department of Health & Welfare
Division of Family and Community Services
Child Support Deductions:
The Division of Family and Community Services receives payroll
deductions made by employers for payment of their employees' court-ordered child support payments. When you hire new employees, the Idaho Department of Labor submits
a copy of your New Hire report to this agency. If an
employee is determined to be in arrears on child support payments, Health
& Welfare will send the employer an income withholding order.
The order indicates when to begin withholding payments, how much to withhold,
and where to send the withheld funds. The employer may charge the
employee a small fee to cover administrative costs.
An
employer may be required to enroll an employee's dependent children in the company's
health insurance plan if the children have no other coverage. For
information, see http://healthandwelfare.idaho.gov/Children/ChildSupport/ChildSupportServices/MedicalSupport/tabid/376/Default.aspx.
Health and Welfare has created an
Employer Portal where employers can electronically manage child support
income withholding payments and medical support notices. The Portal is
found at
http://healthandwelfare.idaho.gov/Children/ChildSupport/tabid/76/Default.aspx .
If an employee owes child support in another state, the
designated agency in that state may contact the employer with an income
withholding order. Failure to comply with the order can result in the
employer being held in contempt of court and being fined. If an employee
holds a professional or occupational license and is in arrears on child support
payments, the license can be suspended, as can the employee's driver's
license.
For further information on employer responsibilities call the
Department of Health and Welfare at (208) 334-5500 or toll-free at 1-800-356-9868. To find your
nearest H&W office, visit
http://healthandwelfare.idaho.gov/ContactUs/tabid/127/Default.aspx.
top
Idaho
Department of Labor
The Department of Labor
provides a wide variety of information and services for employers
through its offices located throughout the state. To find your nearest
Department of Labor office, click the icon to the right. The
department's website is
http://labor.idaho.gov.
IDOL oversees the following employee issues: 
Unemployment Insurance: Information about unemployment
insurance (actually a tax, not insurance) can be found in the Taxes section of this
website.
Independent Contractors: If you are considering using
independent contractors in your business, click here for a detailed description of
the difference between an Employee and an
Independent Contractor. You could face serious penalties if you
misclassify workers.
Employment and Training:
For a description of available programs, see http://labor.idaho.gov/dnn/EducationTraining/tabid/654/Default.aspx.
New Hire Reporting: Employers must report all newly
hired employees within 20 days of the date of hire. Employees who are rehired
after an absence of 12 months or more must also be reported. For
information, visit
https://labor.idaho.gov/newhire/default.aspx.Minimum Wage:
For information on Idaho's minimum
wage requirements, visit http://labor.idaho.gov/dnn/Default.aspx?tabid=695.
Required minimum wage posters can be printed from the Idaho
Department of Labor's website at the location listed below.
Employment Posters:To find the 9 labor posters
employers must post, as well as optional posters, visit http://labor.idaho.gov/dnn/Businesses/EmploymentServices/FormsPosters/tabid/649/Default.aspx. Posters
are available in both English and Spanish.
Farm Labor Contractors:
Contractors who represent
workers in securing employment in agricultural positions in Idaho must register
with the Idaho Department of Labor, obtain a license,
and be bonded. For information, visit
http://labor.idaho.gov/dnn/JobSeekers/FarmWorkerServices/tabid/660/Default.aspx.
Information is available in both English and Spanish. Farm labor contractors must also register with the Federal government. For
information, see
U.S. Department of Labor below.
Employer Tax Incentive/Tax Credit:
Your
business may qualify for a Work Opportunity Tax Credit for hiring an
ex-felon, a welfare or food stamps recipient, a recipient of Supplemental
Security Income benefits (SSI), or another hard-to-place
individual. For information, visit http://labor.idaho.gov/publications/WOTC_Info_Brochure.pdf.
Alien
Labor Certification: This program is designed to insure that admission
of foreign workers into the U.S. will not adversely affect wages,
opportunities and working conditions for U.S. citizens. Employers planning
to bring foreign workers into the U.S. on a temporary work visa must
apply for certification. For information,
visit
http://lmi.idaho.gov/Default.aspx?TabID=764&AspxAutoDetectCookieSupport=1.
Hiring Veterans:
For information on hiring a veteran, visit
http://labor.idaho.gov/dnn/idl/JobSeekers/VeteransServices/tabid/666/Default.aspx.
Idaho Labor Laws:
http://labor.idaho.gov/dnn/idl/laborlaws.aspx
Hiring an Employee with a Criminal Record:
For information about hiring someone who has been convicted of a crime
(not just accused), visit
http://www.eeoc.gov/laws/guidance/arrest_conviction.cfm
and
http://www.lac.org/toolkits/standards/standards.htm.
It is possible to obtain fidelity bonding for high risk employees
through a Federal bonding program administered by the U.S. Department of
Labor and Idaho Department of Labor. For information, see
http://www.bonds4jobs.com/program-background.html
The Fair Credit Reporting Act, administered by the FTC,
covers information that can be legally gathered in a pre-employment
background check (see
Background Checks
below).
The Act states
that records of arrest cannot be included in an employment background
check after seven years. However, a criminal conviction
can be reported indefinitely. The Fair Credit Reporting Act can be found at http://www.ftc.gov/os/statutes/fcradoc.pdf.
Information on the rights of someone with a criminal record can also be
found on the website of the Equal Employment Opportunity Commission
(EEOC) at www.eeoc.gov.
Idaho
Department of Commerce
Tax Incentives:
Find tax incentives for hiring new employees in
certain rural counties, for creating jobs, and other opportunities at
http://commerce.idaho.gov/business/incentives-/.
Workforce Training:
Find information on the Workforce
Development Training Program at
http://commerce.idaho.gov/assets/content/docs/WorkForceTrainingFund_LH_red.pdf.
Idaho
Commission for the Blind and Visually Impaired
This agency provides
rehabilitation services for workers who are losing their vision
or have lost it due to an injury, illness, or congenital condition. For information, call
the Commission at (208) 334-3220 or visit their website at
http://www.icbvi.idaho.gov/
Idaho Council for the Deaf and Hard of
Hearing
This agency serves the deaf and hard of hearing and their employers. Find interpreters,
assistive
devices, and information at
http://www.cdhh.idaho.gov/resources.htm
or call their office at (208) 334-0879 or (800) 433-1323.
Idaho
Division of Vocational Rehabilitation
The employer of a worker who has suffered an injury or illness
resulting in a permanent or long-term disability that interferes with her/his ability to perform their job should contact this agency
for information about rehabilitation services. Workers who qualify to
receive Social Security Disability Insurance (SSI) payments should also contact
this agency to learn about assistance programs. The agency's website is
http://www.vr.idaho.gov/index.shtml.
Idaho Industrial Commission
Business Registration:
If you have employees or make retail
sales, you must register
your business by submitting IBR-1, Idaho Business Registration
application, which can be
completed on-line at https://labor.idaho.gov/applications/ibrs/ibr.aspx. By
completing the form, you will register your business with the ID
Industrial Commission, ID State Tax Commission and ID Department of
Labor in one easy step. (Please note: submitting this form does not register your business name
or entity type. You must register those with the
Idaho Secretary of State
before
completing form
IBR-1.)
Workers
Compensation Insurance:
Employers having one or more full-time, part-time,
seasonal or occasional workers are required to provide workers’
compensation insurance coverage unless specifically exempt under Idaho law.
Information is available at http://www.iic.idaho.gov/publications/ec_idaho_workers_compensation.pdf
or contact a compliance representative by calling (208) 334-6000 or toll free 1-800-950-2110. If
you have employees who are based in Idaho but work across state lines in a
near-by state, they may be covered by your Idaho workers compensation
insurance. Visit the website listed above for information.
Exempt Employees:
Not
all employees or professions need to be covered by Workers' Compensation
Insurance. For more
information on exempt employees or professions, click on the button to the right.
Also see Workers' Compensation on the Insurance
section of this site.
Independent Contractors:
If you are
considering using independent contractors instead of employees, be certain
you can legally do so.
For information on
the difference between an employee and an independent contractor, visit
Employee
vs Independent Contractor
or
http://www.iic.idaho.gov/publications/ec_ic_vs_employee.pdf.
If you classify a worker incorrectly, you could be fined for failure to
carry worker's comp insurance.
Rehabilitation Assistance: If
an employee is injured on the job or suffers a serious
illness as a result of his/her employment, the Industrial
Commission provides rehabilitation assistance. For information, visit http://www.iic.idaho.gov/publications/rd_benefits_injured_workers.pdf.
The IIC offers an informative brochure, Facts
for Employers, found at
http://www.iic.idaho.gov/publications/ec_idaho_workers_compensation.pdf.
Posters: Employers are required to
display a poster indicating their business has worker's comp insurance. The
poster should be provided by your
worker's comp insurance company. For information, visit
http://www.iic.idaho.gov/posters/posters.html.
To find your nearest Industrial
Commission office, click on the box to the right.
Idaho State Tax Commission
Withholding:
If you have an employee who physically works
in Idaho, or if you withhold Idaho income tax from a paycheck, see
http://tax.idaho.gov/i-1026.cfm.
Employer Tax Credits:
See
http://tax.idaho.gov/s-results-form.cfm
and look for Forms 83, 83R,
84, 84R, 85, and 85R, Idaho Small Employer Investment Tax Credit, Idaho
Small Employer Real Property Improvement Tax Credit and Idaho Small
Employer New Jobs Tax Credit.
Internal
Revenue Service
The Internal Revenue Service
website,
http://www.irs.gov,
is an easy-to-use resource to help with Federal business and
personal tax needs. You will find information on how to obtain tax
forms and publications, tax statistics, tax regulations, taxpayer
help and education, IRS news, electronic services, how to contact
the IRS via phone and the Internet, and more.
Employer Identification Numbers (EIN):
The IRS issues Employer
Identification Numbers (EIN), also called tax identification
numbers or tax ID numbers. For information, see
http://www.irs.gov/businesses/small/article/0,,id=98350,00.html.
You will need an EIN if you have employees, make retail sales, or do
business with corporations and government agencies. Your bank may
require an EIN to open a business banking
account. If your business offers employee health
insurance, your EIN will serve as your National Standard Employer
Identification number for electronic claims reporting.
If you change
the name of your business or the entity type, you may need to obtain a
new EIN. For information, click on the IRS link above. Idaho does not
issue a state EIN; your federal number is sufficient for conducting
business in Idaho.
Independent Contractors vs Employees:
To learn the difference between an
employee and an independent contractor and how it affects your tax
reporting, see http://www.irs.gov/businesses/small/article/0,,id=99921,00.html.
Federal Unemployment Insurance Tax:
See the
Taxes
section of this website.
Tax Withholding:
See
Employer's Tax Guide,
http://www.irs.gov/pub/irs-pdf/p15.pdf and
Employer's Supplemental Tax Guide,
http://www.irs.gov/pub/irs-pdf/p15a.pdf
Social Security and Medicare Withholding:
Social Security and Medicare payments
withheld from employee earnings are paid to the IRS. For
information, see
http://www.irs.gov/businesses/small/international/article/0,,id=104936,00.html
Pension/Retirement Plan:
For information on establishing an employee pension
or retirement plan and required tax reporting, visit
http://www.irs.gov/Retirement-Plans/Plan-Sponsor/Small-Business-Retirement-Plan-Resources.
Information on terminating a pension or retirement plan and the required
tax reporting is found at
http://www.irs.gov/Retirement-Plans/Plan-Participant,-Employee/Retirement-Topics---Termination-of-Plan.
Closing a Business or Changing the Legal
Structure: If you close your business, see
http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Closing-a-Business. You
may need to file a final tax return and withholding report at the time of closure.
If you change your entity type (legal
structure), you will need to file form 8832 found at
http://www.irs.gov/pub/irs-pdf/f8832.pdf.
Occupational
Safety & Health Administration
OSHA is the division of the U.S. Department of Labor
that regulates working conditions. They publish the "OSHA Small Business Handbook" found at
http://www.osha.gov/Publications/smallbusiness/small-business.pdf. For information about OSHA and the services they provide, visit their
website at http://www.osha.gov
or their Office of Small Business Assistance at
http://www.osha.gov/dcsp/osba/index.html.
Information about OSHA's various training programs is found at
http://www.osha.gov/dte/index.html.
Information for Hispanic employers and workers is found at
http://www.osha.gov/dcsp/compliance_assistance/index_hispanic.html.
Teen Workers:
If you employ teenagers, visit
http://www.osha.gov/SLTC/teenworkers/index.html
to find teen worker safety and health
information in both English and Spanish.
______________________________________________
U.S. Department of Labor
 The U.S. Department of Labor regulates working conditions, wages, and
payment practices through their
Wage and Hour Division. The Division publishes the
"Handy
Reference Guide to the Fair Labor Standards Act" found at
http://www.dol.gov/whd/regs/compliance/hrg.htm.
Wage and Payment Practices: DOL
guidelines classify all employees as either exempt
or nonexempt. Nonexempt employees are entitled to overtime pay if
they work more than 40 hours in a continuous 7 day period. Exempt employees are
usually managers who spend at least 80% of their time (60% in retail and service
businesses) on management duties. They must also supervise at least
two employees and have some discretionary authority over accomplishing
their jobs.
Paying an employee a salary rather than an hourly
wage does not automatically classify her/him as exempt from receiving
overtime pay. Rather, the duties performed determine their status. If you
have questions about the classification of your employees, contact the DOL. If you fail to pay
overtime to a nonexempt employee, you could be fined. For information, visit http://www.dol.gov/dol/topic/wages/index.htm.
Overtime Pay:
The federal FairPay
Overtime Initiative, found at
http://www.dol.gov/WHD/regs/compliance/fairpay/main.htm,
governs overtime payment requirements.
Minimum Wage:
Both Federal and state laws
cover minimum wage payment practices. For information on the Federal
minimum wage law, visit http://www.dol.gov/dol/topic/wages/minimumwage.htm.
Idaho's minimum wage is the same as the Federal minimum wage.
Wage Garnishment:
Wage garnishment is a legal
procedure in which an employer is required by court order to withhold a
portion of a worker’s earnings for the payment of a debt, such as child
support. A garnishment can be placed against wages, salaries,
commissions, bonuses and pension payments. For information, see
http://www.dol.gov/dol/topic/wages/garnishments.htm
and
http://www.dol.gov/compliance/guide/garnish.htm.
Employment Laws:
To learn about Federal labor regulations that
may affect your business, visit the Department's e-laws website at http://www.dol.gov/elaws.
The "FirstStep Employment Law Advisor" helps employers quickly
determine which of the DOL's major employment laws apply to their
business. If your business is a government contractor or
sub-contractor, visit http://www.dol.gov/elaws/ofccp.htm
to be certain your business complies with all necessary Federal
employment regulations.
The DOL Compliance Assistance
website at
http://www.dol.gov/compliance
offers information on Federal employment rules and regulations and how to
comply with them.
Employment Posters:
If you have employees,
you must post labor-related posters, including in a home-based business. To
find a list of federal poster requirements, visit
http://www.dol.gov/elaws/posters.htm.
Posters concerning Idaho laws can be found at http://labor.idaho.gov/dnn/Businesses/EmploymentServices/FormsPosters/tabid/649/Default.aspx.
Health Plans and Benefits:
If your
business offers health insurance, visit http://www.dol.gov/dol/topic/health-plans/index.htm
for information on complying with ERISA and COBRA requirements.
Information is also available on the Employee Benefits Security
Administration's website at http://www.dol.gov/ebsa/.
Employing Teenagers: If your business employs teenagers, you will find much information at http://www.youthrules.dol.gov.
Laws govern the number of hours teens can work, the
types of activities they can perform, and the types of equipment they can
operate based on their age.
Hiring Veterans:
For information about hiring
or retaining employees who are veterans, including information on
available training grants, visit http://www.dol.gov/vets/.
Employing the Homeless:
The U.S. DOL offers
programs to train and support homeless individuals and agencies working
with the homeless to assist with employment. For information,visit http://www.dol.gov/dol/audience/aud-homeless.htm.
Information is also available on training grants available to businesses
that employ homeless veterans.
Farm Laborers:
The DOL administers
the "Migrant and Seasonal Workers Protection Act" found at
http://www.dol.gov/whd/mspa/index.htm.
The Act requires farm labor
contractors to be licensed by the U.S. Department of Labor as well as by
the Idaho Department of Labor. Additional
registration is required for contractors who provide housing or transport
workers.
Alien
Labor Certification:
The program is designed to insure that admission
of foreign workers into the U.S. will not adversely affect wages,
opportunities and working conditions for U.S. citizens. Employers planning
to bring foreign workers into the U.S. on a temporary work visa must
apply for certification. For information,
visit
http://www.dol.gov/dol/topic/hiring/foreign.htm
and
http://www.dol.gov/compliance/audience/foreign_workers.htm.
Family and Medical Leave Act:
Businesses
with 50 or more employees must comply with this act, which allows
qualified employees to take up to 12 weeks of unpaid job-protected leave
for specified family and medical reasons. For
information, visit
http://www.dol.gov/whd/fmla/index.htm.
The act also provides 26 weeks of leave for caregivers of wounded
military personnel.
Military Service:
Employees who are
members of the National Guard and who are called to active duty are
covered by the Uniformed Services Employment and Reemployment
Rights Act. The Act requires employers to
reinstate returning employees with the status, seniority, and same rate of
pay they would have obtained if they had been continuously employed. The
law also prevents discrimination in hiring, promoting, or retaining
employees who are in the National Guard. For information on the law and
how it may affect your business, visit
http://www.dol.gov/dol/compliance/comp-userra.htm
Pension Plans:
Find information on
employee pension and retirement plans and benefits at http://www.dol.gov/dol/topic/retirement/consumerinfpension.htm.
Information on the Pension Protection Act of 2006 can be found at http://www.dol.gov/ebsa/pensionreform.html.
Opportunity.gov:
Find information about
Federal programs to help unemployed workers improve their skills at
http://federalstudentaid.ed.gov/opportunity/index.html.
Eligible applicants must have been laid off and be receiving
unemployment benefits.
top
______________________________________________
Bureau
of Citizenship and Immigration Services
Federal law requires all parties in a business to have
a legal right to work in the United States. To comply with this requirement,
a Form I-9, Employment Eligibility Verification, must be completed by all employees
and owners of a business. Employees must complete the form
during their first day of work. Employers must complete their portion of the form,
including recording the documents presented by the employee to verify
identity, by the end of
the third day of employment. Employers need to keep the completed forms in their personnel records for at least three years after hiring a
new employee. If an employee resigns or is terminated in less than three
years, the form must be kept on file for one year after
employment ends.
If an inspector visits your office and you can't produce the forms, you
can be fined for each undocumented employee, including the business
owners. For more information or to download Form I-9, visit
http://www.uscis.gov/.
top
______________________________________________
Social Security Administration
Federal Law requires employers to
withhold Social Security and Medicare payments from employee wage and
salary payments. For information and forms, visit
http://www.ssa.gov/pgm/business.htm.
(Business owners who do not receive a paycheck from their business that
includes withholdings must pay self-employment tax, which is a form of
Social Security, on their earnings. This tax is paid to the Internal
Revenue Service when a business owner files his or her personal income
taxes. For more information, see the
Taxes
section of this website.
E-verify (Alien Verification
Initiative):
This is a voluntary Federal program designed to enable
employers to quickly verify eligibility of potential employees to legally
work in the U.S. Participation in the program is voluntary and free, but
you must sign up to participate. Enrollment information is available at
https://e-verify.uscis.gov/enroll/StartPage.aspx?JS=YES.
The initiative is jointly sponsored by the Social Security
Administration and the Department of Homeland Security.
Social Security Number Verification Service:
Register to verify employee Social Security numbers quickly on-line at http://www.ssa.gov/employer/ssnvs_handbk.htm
______________________________________________
Department of Homeland Security
E-verify (Alien Verification
Initiative):
This is a voluntary Federal program designed to enable
employers to quickly verify eligibility of potential employees to legally
work in the U.S. Participation in the program is voluntary and free, but
you must sign up to participate. Enrollment information is available at
https://e-verify.uscis.gov/enroll/StartPage.aspx?JS=YES.
The initiative is jointly sponsored by the Social Security Administration
and the Department of Homeland Security.
______________________________________________
Nondiscrimination Compliance
Businesses having five or more employees must comply with state and
federal laws concerning various types of
discrimination, including discrimination based on race, religion, ethnic
origin, gender, disability, age, and pregnancy. These laws include the Americans with Disabilities
Act and the Federal Fair Employment Practices Act. The Americans with Disabilities Act provides civil rights
protection to individuals with disabilities similar to the rights provided to
individuals on the basis of race, color, sex, national origin, age, and
religion. It guarantees equal opportunity for individuals with
disabilities in public accommodations, employment, transportation, State
and local government services, and telecommunications. To learn
about your responsibilities under the law, visit the ADA website at
http://www.ada.gov/.
A guide containing ADA requirements for small businesses, as well as other
publications, can be downloaded at
http://www.ada.gov/publicat.htm. You may be eligible for a tax credit if you must make structural changes to your
building or work
area to accommodate a disabled employee's needs. Check with your accountant for
details or visit
http://www.ada.gov/taxincent.htm.
The Equal Employment Opportunity Commission's (EEOC)
website,
found at http://www.eeoc.gov/
and
http://www.eeoc.gov/facts/qanda.html,
provides
much information for small businesses, particularly those without an HR
department, to assist with compliance issues.
The Idaho Human Rights Commission enforces both Idaho and Federal human rights
laws. For information on laws that may affect your business, visit the
Commission's website at http://humanrights.idaho.gov/.
Some Idaho cities have enacted local non-discrimination laws
that may be more stringent than state law. Check with your city
clerk's office to learn your city's requirements.
Harassment:
On-the-job harassment is a federal offense. Therefore, every business,
even a very small one, should have a written harassment policy that all
employees read and sign. See Employee Handbooks
in the
Links
section of this website for information on creating a harassment policy. ______________________________________________
Federal Disability
Employment Information
Federal law requires businesses with 15 or more
employees to hire and make
accommodation for disabled workers or current employees who become disabled during
the course of employment. For information about your responsibilities and
for assistance in complying with the law, see
https://www.disability.gov/employment.
Idaho law requires businesses
with five or more employees to comply with
anti-discrimination laws. Any
government entity regardless of size, a contractor or subcontractor for
the state and their agents must also comply. See
http://humanrights.idaho.gov/discrimination/disability.html
for
information. __________________________________________
Hiring Union Members
Idaho is a Right-to-Work state. Therefore, employees cannot be forced to
join a union, nor can union or non-union members be discriminated
against in hiring, promotion, or termination. If your business hires
union members, you may be asked to negotiate a labor contract covering
wages, benefits, and working conditions. A union negotiator will
represent union members when problems arise concerning conduct,
productivity, and other issues. When the labor contract expires, your
employees could strike if the demands contained in their new proposed
contract are not accepted. If your business hires union members, either
as employees or subcontractors, be sure you understand the laws with
which you may need to comply.
______________________________________________
Performing Background
Checks
Many businesses are required by law to
check the backgrounds of potential employees, independent contractors,
and volunteers. These include businesses or positions within a business
that work with children, the
elderly, the physically or mentally disabled, bank employees, alcohol
permit holders, truck drivers, and others. Other businesses may want to
perform some type of background check to be certain applicants are
honest and don't have issues that may negatively affect their ability to
perform their work, such as an alcohol or drug problem, particularly if
employees use company vehicles or have access to money or sensitive
information. You may also want to check the background of a current
employee before offering a promotion or a move to a more sensitive
position.
At minimum, a pre-employment background check should include verification of references, past
employment, and education as reported on a resume or employment
application. It may also include
fingerprinting, checking the applicant's driving record and/or past alcohol or drug use, verification of Social
Security number, and/or past criminal
history. If your
business works with children or vulnerable adults, you may need to check
the state sex offender registry.
Privacy issues
-
Employers do not have
unlimited rights when investigating an employee or potential employee's
background and personal life, so be careful. The person has a right to
privacy in certain areas. If you plan to perform a background check, you
must obtain permission in writing. The request cannot be contained in an
employment application or contract. Rather, it must be a separate,
clearly stated request containing a statement indicating that
information obtained through the background check may influence hiring
or promotion decisions.
The federal Fair Credit Reporting Act (FCRA), administered by the FTC
(Federal Trade Commission), sets national standards for employers who
want to learn more about an applicant or a current employee. The Act
covers "consumer reports," and employment background checks are
considered a form of consumer report. The Act covers information that
can and cannot be collected about a person’s “character, general
reputation, personal characteristics, and mode of living.” The Act also
limits access to information contained in a background check to certain
key individuals within a company. For an employment background check to
qualify as a “consumer report” under the FCRA, it must be prepared by an
outside agency, not by your business. For more information, visit http://www.privacyrights.org/fs/fs16b-smallbus.htm.
The Fair Credit Reporting Act can be found at http://www.ftc.gov/os/statutes/fcradoc.pdf. | | |
