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International Reference Checks: Legal Considerations and Solutions

Learn how to conduct compliant and ethical international reference checks with Deel.

Jemima Owen-Jones
Written by Jemima Owen-Jones
November 17, 2023
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Key takeaways

  1. Background and reference checks are handy for checking employment history, criminal history, education verification, and affirming hiring decisions. In some countries, such as the US, reference and criminal record checks are a legal requirement.
  2. Conducting reference checks prior to international employment introduces several HR and legal challenges, such as complying with local labor laws, obtaining consent, navigating international data protection laws, and adhering to data transfer regulations.
  3. Deel provides efficient and globally compliant employment background checks, fully integrated into your human resources (HR) management system during contract creation.

92% of employers conduct employment background screening to ensure the organization’s safety, maximize productivity, and verify data, according to an SHRM survey.

As global hiring becomes more common, reference checks are becoming increasingly valuable — and complex. Conducting reference checks across different jurisdictions introduces several HR and legal challenges, such as navigating data protection laws, maintaining consent requirements, streamlining verification processes, and adhering to data transfer regulations. 

For example, employers in Canada, Australia, or the United Kingdom may consider job candidates from India due to the lower labor cost and the abundance of highly qualified engineers and software developers. 

But how do these organizations conduct employment verification and criminal record searches legally and ethically when laws and regulations impacting reference checks in India differ from those of the company’s home country?

Below, we explore the legal considerations when running reference checks for employees in different jurisdictions and how Deel provides a global solution. 


Local labor laws

Labor laws are designed to protect the rights and well-being of workers, and they’re also applicable to background checks. Failure to align reference checks with local regulations and laws can expose the organization to several potential risks, including legal disputes and employment-related claims. 

Below are some examples of country-specific labor laws and how they impact reference checks: 

  • Australia’s Fair Work Act 1996: The Fair Work Act is a federal law that governs employment relationships in Australia. The Fair Work Act prohibits employers from discriminating against applicants or employees based on a number of factors, including race, sex, and disability. This means that employers cannot request background information that could be used to discriminate against job seekers
  • The United States’s Equal Employment Opportunity Act (EEOA): The EEOA prohibits discrimination in employment based on race, color, religion, sex, national origin, disability, or age. This means that employers cannot collect background information to discriminate against potential new hires
  • Ontario’s Employment Standards Act (ESA): The ESA is a provincial law that governs employment standards in Ontario. The ESA prohibits employers from discriminating against applicants or employees based on a number of factors, including age, race, sex, and disability. This means that employers cannot collect and use background information to discriminate against job seekers

💡Deel’s background checks are built in alignment with international labor laws and prioritize the following:  

  • Purpose limitation: We only conduct background checks for legitimate purposes related to the job or employment relationship
  • Data minimization: We only collect and process personal data that is relevant and necessary for the specific purpose of the background check
  • Transparency:  We inform applicants about the background check process, the types of information we collect, and how we will use it
  • Accuracy and fairness: Ensure the information collected and reported in the background check is accurate, up-to-date, and relevant to the job requirements
  • Right to access and correction: Provide applicants with the right to access their background check report and challenge any inaccuracies or incomplete information

Consent and verification

Getting valid and informed consent from candidates before conducting international reference checks is often a legal requirement in many jurisdictions and kickstarts the relationship in good standing.  

Here are some examples of country-specific laws that govern consent in relation to background checks: 

  • Australia’s Privacy Act 1988: This federal law governs the collection, use, and disclosure of personal information in Australia. The Privacy Act requires employers to obtain informed consent from applicants before conducting a background check. The consent must be freely given and must be for the purpose of obtaining the background check
  • The Unites States Fair Credit Reporting Act (FCRA): This federal law mandates that employers obtain written consent from the applicant before conducting a background check. The applicant must be informed about the purpose of the background check and the type of information that will be collected. The employer must also provide the applicant with a copy of the background check report
  • Canada’s Employment Standards Act (ESA): This provincial law varies from province to province but generally requires employers to obtain consent from applicants before conducting a background check. The consent must be obtained in writing and must be specific to the background check

💡Deel’s pre-employment screening checks simplify the process of obtaining and managing consent to mitigate legal and reputation risks. Consent checkboxes and privacy notes ensure that data collection (and sharing) processes comply with global consent and verification regulations. 


Data protection and privacy laws

Data protection and privacy laws vary from country to country, governing the collection, processing, and transfer of personal data. Conducting reference checks that aren’t in alignment with a country’s data protection and privacy laws can result in legal liability, data breaches, and regulatory fines. 

Here are some examples of country-specific data privacy and protection laws that impact background checks: 

  • The EU’s General Data Protection Regulation (GDPR): This is the most comprehensive data protection law in the world, and it has a significant impact on background checks. Employers in the EU must only collect and use personal data that is necessary for the purpose of the check after obtaining consent
  • Japan’s Act on the Protection of Personal Information (APPI): This is a national law that governs the collection, use, and disclosure of personal information in Japan. The APPI is similar to the GDPR in many respects, and it requires organizations to obtain consent from individuals before collecting their personal data and to take appropriate security measures to protect the data
  • Iceland’s Personal Data Act (PDA): This law grants individuals extensive rights over their personal data, including the right to access, rectification, erasure, and objection to its processing

💡Deel’s global background screenings comply with GDPR, which is widely considered to be one of the strictest and most comprehensive data privacy and protection laws in the world. 

In addition, Deel’s background check services are SOC 2 and SOC 3 compliant, which means they undergo independent audits by an AICPA-approved auditor to ensure data security, privacy, and compliance are upheld.


Data transfer regulations

When conducting international background checks, you must be aware of transferring data to countries with different data transfer laws and standards. Failing to comply with data transfer regulations may lead to the suspension or delay of hiring international talent, or result in contractual disputes and legal action. 

Here are some examples of country-specific data transfer regulations that can impact background checks: 

  • Canada’s Personal Information Protection and Electronic Documents Act (PIPEDA): PIPEDA prohibits the transfer of personal information outside of Canada without the consent of the individual. Organizations must also ensure that the recipient country has laws in place that provide adequate protection for personal information
  • South Africa’s Protection of Personal Information Act (POPI): The POPI requires organizations that collect and process the personal information of South African residents to obtain consent before transferring the data outside of the country. Organizations must also provide individuals with access to their personal information and the right to rectification and erasure

💡 Deel’s background screening process is ISO 27001 certified which is a globally recognized standard for information security management systems (ISMS). This ensures we maintain robust security controls to protect data from unauthorized access, use, disclosure, alteration, or destruction.

Put international candidate screening on autopilot with Deel

Unlike traditional screening services that are built for local hires and have long turnaround times, Deel’s global background checks are compliant with global laws and regulations and are built into the hiring process. 

  • Optimize your hiring and screening workflow: There’s no need for HR to log into another platform or chase documents. Request a background check from Deel, and we’ll handle all the admin.
  • Reduce time to hire with our quick turnaround time: Speed up your time to hire by around 80% with screening results in minutes. All thanks to AI-powered technology
  • Provide a convenient candidate experience: Candidates can verify their identity through a mobile or desktop device, track the status of their background check, and access in-app support

Our background check partner, Certn, ensures the results are: 
      ✅ GDPR compliant
      ✅ SOC 2 compliant
      ✅ SOC 3 compliant
      ✅ ISO 27001 certified

Learn more about how Deel automates background and reference checks, or book 30 minutes with a product expert to get your questions answered. 




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