There are several good reasons to make background screening a part of your hiring process. If your employees handle the personal data of others, it is critical to know who you hire. If your business involves handling financial or health information for customers, you must comply with electronic data privacy requirements. Not checking on an applicant’s background and whether they are suitable for the job can be very expensive, especially if that employee later causes injury to another person. You will have opened yourself to a negligent hiring lawsuit that could be easily avoided with background screening. Reviewing background and credit is simply a great way to review applicant reliability. Keep in mind, however, that you cannot refuse to hire based simply on the fact that a person has filed bankruptcy.

No. Even though other HR-related laws often change with the size of the company, the Fair Credit Reporting Act applies to all large corporations and small business owners alike. Any information you request that is considered a consumer report, and is received from a consumer reporting agency, falls under the rules of the FCRA, without consideration given to the number of employees you have.