Is it Illegal to Perform Background Checks on Existing Employees?
No. It is perfectly legal in certain cases for employers to run background checks on their employees. Employers can hire an outside source to screen employees with both positive and negative outcomes in mind.
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Credit Checks
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Under the Fair Credit Reporting Act, employers can run a credit check on workers for promotions, retention or transfers. Employees must authorize such checks.
Misconduct
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Employers can run a background check if an employee is suspected of job-related misconduct.
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Policy Violations
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Background checks can be conducted on employees suspected of violating an employer's written policies.
Criminal Activity
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If an employee is suspected of breaking the law, an employer can hire someone to check the employee's background.
Securities and Commodity Futures
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Employees suspected of breaking "with the rules of a self-regulatory organization ... that oversees the securities and commodity futures industry" are subject to background checks, according to the Privacy Rights Clearinghouse.
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