Background check challenges for the real estate industry


The real estate industry is an integral part of communities. Workers in this industry help many people by providing personal and financial information as part of their daily responsibilities. Managing this information makes it crucial for employers in this industry to know that their employees are trustworthy. Therefore, background checks are an essential part of their hiring process.

Background checks have long been an integral part of the hiring process, and the Fair Credit Reporting Act (FCRA) has regulated such screenings since 1971. The law regulates how employers can obtain consumer reports and what they must do when using them.

For example, employers must seek and receive permission from the individual before acquiring the report. When ordering a background check report, they must also provide a stand-alone disclosure form to applicants or employees. Employers who fail to comply with FCRA requirements face fines and other penalties.

Due to labor shortages and changes in laws, many real estate employers have adjusted their hiring processes. Many states and local areas encourage employers to screen out fewer applicants. In contrast, one state recently passed a law requiring stricter background checks for certain positions in the real estate industry. Because of these varying laws, all employers conducting background checks should be vigilant about the laws that regulate screenings. Here are several recent developments in regulations regarding background checks.

Marijuana Drug Testing

Many states have legalized the use of cannabis for recreational purposes. Since legalization, some state laws now regulate drug testing for marijuana use. Real estate employers should consider these laws when hiring and any liability issues for employees in safety-critical positions. However, there are exceptions to these laws for security-sensitive jobs. The United States House of Representatives also passed the Marijuana Opportunity Reinvestment and Expungement Act. This law would remove cannabis from federal lists of controlled substances and decriminalize cannabis use at the federal level. Finally, the United States Senate drafted a bill to decriminalize marijuana. This law is called the Cannabis Administration and Outlets Act. Employers should monitor the development of these laws.

Ban Box Laws

Ban the box The laws, also known as the Fair Chance Acts, generally restrict an employer’s access to applicants’ criminal history until they offer conditional employment. These laws encourage employers to review a candidate’s qualifications for the job before looking at their criminal history. These laws can vary widely between states and within local areas of a state. Therefore, real estate employers should check the local laws of where they are hiring, ensure compliance, and protect themselves against negligent hiring and retention claims.

Equal Employment Opportunity Commission

Employers must also comply with the Equal Employment Opportunity Commission (EEOC) laws. For example, employers must ensure that their hiring policies do not disproportionately or negatively affect a protected category. In addition, the EEOC offers employers tips when conducting background checks or using information contained in screening reports. This guide recommends always performing a personalized assessment when any hiring decision is based on a candidate’s criminal history, which is necessary in some areas.

Final Thoughts

Given the fast-paced nature of the real estate industry, it can be difficult to keep up to date with the ever-changing legal landscape of background checks. However, to protect your business, your employees and your customers, it is crucial to perform this due diligence.

This difficulty is why partnering with a background check provider you trust is crucial. Be sure to find a company that keeps up to date with all applicable laws and regulations. The right background check company will help you comply with ever-changing rules, ensure you hire quality employees, and ensure your hires are assets to the company.

Easily verify your professional qualifications when you proceed to pre-employment background checks. Speak to a sales representative today.



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