Background Screening In India Needs Regulation

by January 11, 2018 0 comments

Dr. (Col) John Chenetra, President, SecUR Credentials outlines the need for regulation platform for background screening of employees in India

Dr. (Col) John Chenetra, President, SecUR Credentials

The background verification process has taken large steps since its inception decades ago. As a practice, background verification became increasingly prevalent only recently when third-party verification agencies set up shop in India. They catered mostly to multinational companies, who followed the best practices similar to those in the countries that they were headquartered in.

In the US, companies need to be compliant with regulations such as the Fair Credit Reporting Act (FCRA), which has provisions for background screening by employers. Under FCRA, employers need to get written consent to access employee details and tell the candidate how they intend to use the information. However, unlike in the West, background verification in India is not regulated and there are no specific laws to govern it.

Although it is commendable that more and more companies in India want to conduct background checks, most of them are still not aware of the best practices that involve seeking consent from candidates before verifying their personal information. In other words, employers need to be sensitive to the privacy of candidates. It’s only when Indian companies start understanding the significance of background screening, will they adopt an efficient system by complying with regulations that has made provisions for the same.

Today, there are numerous leading IT companies that have adopted a two-tier system wherein reference checks are handled in-house as well as by third-party agencies. Similarly, the Reserve Bank of India (RBI) has issued notices to banks, making the employee verification process a mandate for all personnel that are recruited from other banks. The idea is to ensure no person with a criminal background is employed by any banking company.

Accessing information of candidates such as criminal and court records does not require consent as this is public information. But sharing or accessing private information such as financial records, medical records, and biometric information would require consent from the individual as per the sensitive data rules under the data protection laws. Due to the fact that there is no clear regulation governing background screening, companies have been able to get away without being penalised for disclosing private information of candidates. The penalties for those violating the background checking regulations may range from serving a jail term of two to three years, to a few lakh rupees in fines.

Regulating the verification process enables companies and candidates to develop credibility. Although the process of conducting a background check continues to remain a challenge, it may be simplified and made more transparent by initiatives like linking the Aadhaarcard by the Government and other regulatory bodies.

Additionally, while everyone from blue-collar to white-collar employees is subjected to background checks, curiously enough, it is the senior-level employees who are most likely to be screened without consent. This warrants a need for supervised regulations to avoid any malpractices or unethical checks. Although cumbersome, the objective of background checks is to ensure the safety and security of the employees in the organisation, and companies must ensure that background checks are conducted for the same.

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