Legal Considerations When Hiring Security Guards

Business owners know that security is a serious investment- whether they’re hiring in-house staff or contracted private security personnel. But understanding the legal aspects of hiring security guards is crucial. All hiring decisions can involve licensing, liability or labor law compliance issues. So when business owners make missteps, this can result in lawsuits, fines or even long-term reputational damage to their company. This guide is designed to help business owners successfully navigate that legal minefield!

Before diving into the full legal details, here’s a comparison for business owners to first decide whether to hire in-house vs. contracted security:

In-house guards:

• They are hired directly by your company.
• Your company is responsible for wages, benefits, training and liability.
• You must manage overtime, break laws and wrongful termination protocols.
• In-house guards may be subject to labor laws, union agreements, or collective bargaining rules.
• Your business must comply with privacy laws (e.g. GDPR [General Data Protection Regulation], HIPAA [Health Insurance Portability and Accountability Act]) if guards monitor cameras, access personal data, or deal with the public.

Contracted guards:

• These are provided by a third-party security guard company.
• The third party company handles wages, benefits, training and liability.
• Liability may fall on the contracted security firm, but indemnification clauses in the contract determine this.
• The third-party business must comply with privacy laws (e.g. GDPR [General Data Protection Regulation], HIPAA [Health Insurance Portability and Accountability Act]) if guards monitor cameras, access personal data or deal with the public.

So choosing between in-house or contract guards is the first step. Here’s the next steps to
get “your legal ducks in a row”- by understanding the legal requirements for hiring security guards:

Security Guard Licensing Requirements

These requirements may vary by state and locality. Legal requirements are issued by a government agency (often a state agency) granting a guard the legal right to work- like a security guard “driver’s license.” Business owners should check for proper licensing with state authorities such as the Department of Public Safety or Private Security Board. Conduct your search online with the phrase “xx [state] security guard license lookup” -it will lead to online databases where you can:

• Verify an individual or company’s license status
• Make sure a license is active, not expired
• Confirm if a guard is licensed for armed or unarmed service

When business owners interview a prospective security guard firm, they should ask for documents that verify that the company has:

• A current state-issued private patrol operator license
• Proof of liability insurance– a COI (Certificate of Insurance)
• Bonding surety bond if required by your state.
• Specific licensing/training information of guards that would be assigned to their site, to verify if they are in accord with state law.
• FCRA-compliant protocols for prospective employees’ screenings (see details in Background Checks For Security Guards section)

Security Guard Certification Requirements

Certification is the specific professional training and qualifications guards must complete to qualify for a license- the proof of a guard’s required training or skills. In CA, this basic security training certificate is the prerequisite for a license and is called a guard card. It is obtained from BSIS Bureau of Security and Investigative Services with fingerprinting and certain training.

Certifications in other states are similar to a guard card:

• In Illinois, security guards must have a PERC Permanent Employee Registration Card.
• New Jersey mandates that contract guards complete certification training per SORA (Security Officer Registration Act).
• North Carolina has security officers register with PPSB Private Protective Services Board and complete specific 16-hour training.

Other common types of certification would be for firearms training, use-of-force/de-escalation training, or CPR/First aid credentials. Specific licensing/training records of guards should be kept in the business owner’s employee records- (applicable for both in-house and contracted guards).

Background Checks For Security Guards

Lawsuits from rejected applicants, civil penalties and fines, and negative publicity can all be avoided when background checks of potential employees are conducted according to federal guidelines. To understand how to comply with the FCRA (Fair Credit Reporting Act), FCRA rules state that anyone getting a background check for employment must:

• Be informed in writing.
• Give written consent to it.
• Get a pre-adverse action notice if they may be refused employment based on that report- so they have options for rebuttal.
• Be sent an adverse action notice if they’re refused employment (with reasons, name of background check provider, and statement that the refusal to hire was not the agency’s but yours exclusively).

Liability And Insurance

Protecting your liability when hiring security guards goes beyond verifying licensing requirements or background checks. There are more legal points to consider before signing any contract.

What insurance coverage should a security company have?

Upon request, a security company should provide a COI (Certificate of Insurance)– which is an official document issued by their insurance company that summarizes key details of their coverage. It should list:

• General liability minimum coverage $1 million per occurrence, $2 million aggregate which is the total limit for all claims during the policy term, usually 1 year
• Workers’ compensation required by law in most states
• Professional liability/Errors & Omissions essential if guards are handling emergencies, or crowd control
• Assault and Battery Coverage must be specifically added if guards are expected to physically intervene
• Armed Guard Coverage if using firearms
• Additional Insured Status ask the security company to name your business as an “additional insured” on their policy, as extra protection in case of a lawsuit from a security incident

The COI shows policy start and end dates, so double check if it’s active during your contract period. Confirm the insurance company as a reputable carrier too. A business owner should consult a business and contracts attorney to review any contract before signing.

What insurance coverage should your business have?

• General Liability
• Employer’s Liability and Workers’ compensation if hiring in-house guards directly
• Umbrella Liability insurance if you operate a high-risk or crowd-based industry like events or hospitality
• Commercial Property Insurance
• (Optional) Professional Liability Insurance errors and omissions insurance
• Clarification with your own business’ insurance agent that your company has coverage involving third-party contractors
• Add riders such as an “Assault and Battery” amendment to your policy if needed

Cotracts And Legal Considerations

Contractual agreements for security services need to be very clear and specific. Some specific examples to clarify in a security guard contract could be:

• Use of force policy
• No firearms unless licensed and authorized
• Citizen’s arrests only if trained/authorized by law
• Detentions made in reasonable time and manner based on clear suspicion e.g.theft in progress
• Incident reporting must be done within 24 hours
• Confidentiality clauses no sharing internal business operations, surveillance footage, discussing VIP clientele, or proprietary processes (like a restaurant’s secret recipe)
• Code of conduct clean uniform, courteous behavior, no fraternizing, no substance abuse-random drug testing can be included in the contract
• Auto-renewal clause a contract may automatically renew for another term if not cancelled within a certain time period

Union And Labor Law Considerations

Here’s just one example of how security guard wages differ across various states. In Texas, guards make the federal minimum wage of $7.25/hour based on the FLSA Fair Labor Standards Act. But in Washington, guards make a minimum wage of $19.97/hour. So it is vital for a business owner to thoroughly research.

There are fair labor practices in the security industry that business owners must follow- about wages, overtime, break requirements, safety standards, OSHA compliance, “right to work” states that do not compel employees to join a union (e.g. NC, OK, SC, TN, TX), and any other unique state labor laws. A business owner can find accurate current information like this from state Department of Labor websites (or some equivalent). To find online, search “[your state] Department of Labor.” Other sources for federal laws are the DOL U.S.Department of Labor, and for union information the NLRB National Labor Relations Board. Local Chambers of Commerce, and SBDC Small Business Development Centers in your area are a source for navigating local labor laws.

To summarize, the wisest business owners know that hiring security personnel requires careful attention to legal responsibilities. Now that you know more about the legal side of hiring, it is time to take your next step the smart way.

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