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Frequently Asked Questions That Are Related To Background Checks

neih0825_pg1_background_checksCan an employer carry out a credit check on prospective employee or a present employee?
Yes, an employer can perform a background (credit) check on a present employee or a future employee when the information collected is exclusively used for purposes related to employment. It would include granting promotions, considering new hiring, delegation of responsibilities or determining the retention of that employee. Companies like Triton Canada can be your best partners for this process.

When is the right time to execute the credit check?
For the present employees a credit check is completed only when there is a decision about retaining or promoting the employee.
For the prospective ones, the credit check is executed only after a written document of conditional offer letter has been created by the company. Sometimes, non-financial details regarding the candidate may get revealed during the process and might affect the decision of hiring the candidate (if it is related to discrimination.). This might become employer’s liability, so it is always avoided.

Is it necessary for the employer to give written notice about the credit check?
Yes, the Consumer Reporting Act makes it mandatory for all the employers to issue a written notice to the prospective or present employee that a credit check is going to be performed. It should be done before the conduction of the credit check and should adhere to the format that has been prescribed. The employer is also liable to inform the applicant, the details of the consumer reporting agency which is undertaking the check.

Can any employer take hiring or promotion decisions based on the information collected during credit check?
Yes, it is possible to reject a prospective candidate or decline promotion based on the results from the credit check. However it is mandatory for the employer to notify the reason for the decision to the employee and if the employee makes a request within sixty (60) days after the publishing of notice. The employer is liable to provide the details of the consumer reporting firm and information source to her/him.

Can a credit check be carried out by an employer for any job?
An employer has the authority to undertake a credit check if necessary on existing employees or prospective employees in Ontario. Ontario Human Rights Code, which is commonly referred to as “code” does not prohibit employers to decline any hiring or promotional decision strictly based on an individual’s credit history.

What can be the consequences when the Consumer Reporting Act is violated?
When Consumer Reporting Act is violated by any officer or any director from your institution knowingly, She/he may be made to pay a fine which can go up to $25,000 and/or could be sentenced to jail for a maximum 1 year. Otherwise, your institution would be made liable to pay a fine of $100,000.

When can an employee be subjected to alcohol /drug test?
The employer can subject any employee to undertake alcohol or drug test. However the violation of employee rights only validates when there is a demonstrable relationship between drug and alcohol to job safety and performance of the employees.

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