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- Background checks help hospitality employers build the best teams
- Resources are stretched thin for hospitality employers
- Complex regulations cause challenges for hospitality employers
- Compliance errors can lead to unfair hiring practices and legal liability
- Reimagine background checks to reduce candidate churn and improve time-to-hire
Checkr’s State of Screening Compliance report finds challenges in background check compliance for hospitality employers. Learn how to mitigate risk and improve compliance without sacrificing speed.
Employers in the hospitality industry often need to hire at scale to address seasonal hiring peaks and high turnover. Background checks are crucial to maintaining a high-quality team—but they need to be done quickly to reduce candidate dropoff. In doing so, however, many companies may be overlooking crucial steps in their background check process. This oversight could lead to noncompliance with federal, state, and local laws that regulate how background checks should be used to protect consumer privacy and ensure fair hiring practices.
In January, Checkr released its first-ever State of Screening Compliance report to understand organizations’ background check compliance concerns and challenges, and how practitioners are managing compliance laws and regulations. We surveyed workers involved in the background check process (not Checkr customers) across the US and in ten different industries.
In this article, we’re breaking down the survey data by industry to take a closer look at the benefits of background checks for hospitality employers—and the challenges they face with compliance.
Run safer background checks in 2024
Background checks help hospitality employers build the best teams
Background checks have many worthwhile benefits, though the top reasons hospitality employers run them are to comply with federal and state laws, meet industry standards, and mitigate risk. Here’s a closer look at why hospitality organizations told Checkr they run background screenings, in order of reported importance.
- Comply with federal and state laws. Using a compliant background check provider can help support your compliance processes to ensure that candidate screening processes adhere to federal, state, and local laws. This is particularly important for hospitality employers with dispersed frontline hiring teams that span multiple jurisdictions.
- Meet industry standards. Background checks help hospitality employers identify high-quality candidates who can maintain the experience your customers have come to expect.
- Mitigate business risk and protect against lawsuits. Hiring trustworthy employees helps mitigate business risks and protect your organization from legal liability.
- Improve quality of hire. Background checks enable employers to make informed hiring decisions. A high-quality team can help hospitality companies build a great customer experience.
- Maintain a safe work environment. Hiring skilled, trustworthy employees can help you maintain an environment that safeguards employees and customers—as well as your business assets.
- Protect company reputation. An exceptional customer experience can help your brand stand out among your competitors so you can earn repeat business and attract new customers.
Resources are stretched thin for hospitality employers
Background check compliance responsibilities overwhelmingly fall to busy HR and talent acquisition (TA) teams at hospitality companies. Our survey found that these teams are responsible for background checks, compliance, and compliance training at 60% of organizations in this industry. Only 16% of organizations have a dedicated background check team.
Resources for TA teams are stretched thin, and background checks are typically one of many responsibilities HR professionals manage. It’s no surprise that only 18% of organizations “always” conduct comprehensive training on the importance of compliance and legal risks associated with background checks. Nearly half (47%) never, rarely, or sometimes conduct training.
Many hiring teams are struggling to keep up with background check best practices due to this lack of resources.
Hospitality survey respondents rank their organization’s biggest concerns:
- Inability to stay on top of regulations and changing laws
- Violations and lawsuits
- Over-screening or under-screening
- Bias during the decision-making process
- Lack of proper compliance training
- No one is actively managing compliance
- Unsure which background checks to use
Complex regulations cause challenges for hospitality employers
There are multiple federal, state, and local laws that impact background checks. The Fair Credit Reporting Act (FCRA) is the federal law that all employers must follow to protect candidates applying for jobs. Hundreds of local laws at the state, county, and city levels—such as Ban the Box, salary history bans, and use of credit screening—may also impact how employers can use background checks during the hiring process.
Nearly two in three hospitality survey respondents (66%) said their organization is good or very good at understanding and following the complex regulations of screening and compliance. However, when we asked whether they’re confident their organization's documented background check policy complies with federal, state, and local screening laws and regulations, 56% admitted they lack complete confidence, and 5% said they don’t have one. This finding underscores the need for employers to proactively monitor legislative changes and update their policy to take new laws into account.
Are hospitality companies confident their background check policy complies with federal, state, and local regulations?
*Data from Checkr proprietary survey of workers involved in the background check process in the hospitality industry.
The ever-evolving landscape of background check legislation across the US makes it increasingly difficult for employers to manage compliance. Hospitality organizations’ top concerns when it comes to legislation and its impact on background screening are:
- Record clearance and expungement laws (“Clean Slate” laws). In the last five years, 12 states have passed Clean Slate laws that provide automatic expungement of certain crimes when candidates are eligible for it. Additional states are expected to introduce laws on an ongoing basis, and hospitality employers hiring across multiple states will need to comply with relevant laws.
- Data redaction laws. Some county courts are redacting personal data—such as full dates of birth and driver’s license numbers—from public records to protect consumer privacy. Without this information, county clerks may be required to review records manually and verify a match, slowing down background check turnaround times. This is particularly concerning for hospitality employers who need the recruitment process to move quickly so they can hire quality talent ahead of competitors and ensure a great customer experience.
- Fair chance hiring requirements (Ban the Box laws). Currently, 37 states and 190 cities and counties have enacted Ban the Box laws. Regulations vary greatly based on location and jurisdiction but generally restrict employers from asking about a candidate’s criminal history on initial job application forms.
- Marijuana legalization and drug testing laws. Medicinal and/or recreational adult use marijuana is legal in 40 states plus Washington DC. These drug testing laws vary widely: Some restrict when testing can be conducted, some restrict how employers can use drug testing to make hiring decisions, and others prohibit testing for marijuana altogether (with some exceptions).
- Laws with conflicting requirements. Without overarching federal policy for regulations such as Ban the Box or marijuana legalization, states are taking matters into their own hands. New state and local background screening regulations continue to add complexity to an already convoluted map of laws. Reconciling various state laws, many of which conflict, is becoming increasingly challenging as new laws regulating different types of screenings are implemented.
Compliance errors can lead to unfair hiring practices and legal liability
A written background check policy, along with documented adjudication guidelines, is crucial for a compliant screening program. Without a clear set of parameters, inconsistencies in the background check process could lead to discrimination and risk of non-compliance with federal and local laws.
For example, the FCRA requires that employers provide candidates with disclosure and authorization forms. Only 37% of survey respondents in the hospitality industry strongly agree they provide the forms each time.
Describe how you feel about the following statement: For every background check performed, my organization provides the necessary compliant background check disclosure and authorization (consent) forms.
*Data from Checkr proprietary survey of workers involved in the background check process in the hospitality industry.
If an employer decides not to hire a candidate based on the results of a background check, the FCRA mandates they follow the adverse action process. Our survey revealed that 72% of respondents were not always following the adverse action process.
Further, the Equal Employment Opportunity Commission (EEOC) recommends employers follow the green factors to avoid unintentional discrimination in hiring decisions. This guidance suggests employers consider the nature of the offense, the time that has passed since the conviction, and the relevance of the offense to the position.
However, only 26% of hospitality respondents are completely confident that their organization understands and follows this guidance as part of an individualized assessment. This is among the lowest of all industries surveyed. Worse, 61% of hospitality employers aren’t completely confident they have policies and procedures in place to prevent discrimination during the screening process.
Do hospitality companies have policies and procedures in place to prevent discrimination?
*Data from Checkr proprietary survey of workers involved in the background check process in the hospitality industry.
Failure to follow basic compliance procedures can unfairly affect candidates’ job opportunities and expose employers to unnecessary legal liability. Implementing and maintaining compliance training programs can help ensure that employees involved in the background check process are following correct procedures as outlined in your background check policy.
Reimagine background checks to reduce candidate churn and improve time-to-hire
Compliance regulations are challenging—but they’re in place to encourage employers to build fair hiring practices. The good news is most respondents in the hospitality industry (80%) feel confident that their organization understands, and complies with, fair chance hiring practices.
Keep your background check policy up-to-date and make sure anyone involved in the background check process follows the procedures outlined. Consistent, automated processes are key to overcoming compliance challenges while quickly scaling your team. Checkr’s advanced technology can help you keep up with regulations and risk management while also growing your workforce. Moreover, Checkr is a key partner in speed to hire with customers reporting 30% faster average background check completions.
Get more insights in Checkr’s 2024 State of Screening Compliance.
2024
State of Screening Compliance
A new survey report highlights seven key insights into how organizations are managing background check compliance.
Disclaimer
The resources and information provided here are for educational and informational purposes only and do not constitute legal advice. Always consult your own counsel for up-to-date legal advice and guidance related to your practices, needs, and compliance with applicable laws.
