Hiring is an expensive, time-consuming process, and employers understandably want to make sure they get it right the first time. For many employers, background checks represent a critical tool for ensuring that the people they hire are trustworthy and have the skills, experience, and education they claim to possess. Delving into a job applicant’s background can also help to insulate organizations from lawsuits and charges of negligent hiring in case something goes wrong.

But, a growing number of federal, state and local laws have complicated the types of background checks employers can perform and how companies can use the information that checks provide.  Federal laws, such as the Fair Credit Reporting Act (“FCRA”), the Americans with Disabilities Act (“ADA”), and Title VII of the Civil Rights Act of 1964 (which prohibits discrimination), to name only a few, all come into play when an employer conducts background checks, and recent interpretations of these laws have made background checks more complicated.

In response, fewer employers conducted credit and criminal background checks for job candidates in 2012 than in 2010, according to surveys by the Society for Human Resource Management.

“Human resources professionals are looking more closely at the job-relatedness of these practices,” stated Mark Schmit, that organization’s vice president of research. “As a result, fewer employers are using background checks, and checks are often done for specific jobs or to comply with the law.”

So how can organization comply with the law, maintain a safe work environment and minimize legal liability? Employers need to understand the different types of background checks, determine which laws impact them, create proper policies and train employees to abide by them.