We have discussed the issue of proper due diligence in hiring and retention of employees (See here).  As your Baltimore Small Business Lawyer, if you fail to properly investigate potential new employees you expose your self to negligent hiring suits, workplace fraud, theft, and potential violence (in addition to simply hiring a bad fit).  On the other side of the coin, there are numerous federal and state laws, rules, and regulations that prohibit the improper use of credit and background check.  Additionally you could be legally liable for additional fines and damages if the improper use is proven.  This article will provide some guidelines, a more thorough (and technical) discussion of the applicable laws can be found in the article, Criminal and Credit Background Check in the Employment Context, Md. Bar Jrnl., Nov. 2013 (M. McGuire).

Baltimore Small Business Lawyer: What morass of laws do I need to navigate?

If you are a hiring employer, you are responsible for knowing if your business is covered by the federal and/or state laws and how to comply with them.  This is often not an easy task.  Often times, small businesses are exempt from such rules and regulations.  For example, Federal anti-discrimination laws apply only to employers who have more than 15 employees.  However, State anti-discrimination still apply and bar the use of prohibited characteristics in decision-making for hiring and firing of employees.  Here are some other laws that may apply to use of background and credit checks in the hiring process:

  • Fair Credit Reporting Actbaltimore small business lawyer
  • Federal Bankruptcy Act
  • Maryland Job Applicant Fairness Act
  • Maryland Expungement law

Baltimore Small Business Lawyer: Great, now what????

Examine each position in your business.  Who is handling cash?  Who is interacting and obtaining access to sensitive customer information (secrets, SSN’s, etc)?  Who needs a special license to work (CDL driver)?  You should be able to articulate a reason for the background check for the job position.  A laborer in a factory, for example, probably need not submit to an extensive background check.  See here for more.

Baltimore Small Business Lawyer Bottom Line

You don’t want to have your small business bottom line ruined because of a misstep with running a background check on an employee.  If you have any questions, Call your favorite Baltimore Small Business lawyer!