Employee Background Check Laws

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 What Is an Employee Background Check?

Each state has employment background check laws. These laws state what kinds of questions an employer may ask a prospective employee before they are hired. Employers may want to know whether an employee has a criminal record, a drug or alcohol problem, or poor credit. Employers may want to obtain this information from state agencies or credit bureaus.

In recent years, states have passed laws limiting an employer’s ability to conduct background checks. States have also limited an employer’s ability to use background check information in hiring decisions. Employee background check laws differ widely by state. In many states, localities and cities may have background check laws. These laws may be stricter on employers than the state background check law.

What Kinds of Information Is an Employer Restricted from Seeing When Conducting a Background Check?

In general, employers who conduct a background check may obtain (either directly or through a screening agency) information about employment history and education history. Employers may do so provided the job applicant gives written consent to the background check. They may ask for employment and education background that is relevant to the position.

Employers may ask “prior employment” questions including start and end dates of a previous job, job titles and duties, and how the job came to an end (voluntarily or involuntarily). Voluntary termination occurs when an employee resigns or quits. Involuntary termination occurs when an employee is laid off. Involuntary termination occurs when an employee is terminated for a lawful reason. As long as employees give written consent, an employer may also obtain high school, college, and postgraduate education transcripts.

Employers may conduct background checks to obtain other information that is relevant to a position. This other information includes character and personal references and social security numbers. If employment is sought for a position requiring a license, an employer may obtain a copy of the applicant’s license (such as a license to practice law or medicine). If employment as a driver or operator of a motor vehicle is sought, an employer may obtain an applicant’s driving record.

Criminal background checks may be conducted, but only under certain conditions. A federal law known as the Fair Credit Reporting Act (FCRA) bans background screening businesses from reporting arrests that are more than seven years old. This law applies to all states. Each state’s law provides for when criminal background checks may be conducted, apart from the federal restriction. Some states prevent employers from inquiring about or seeking criminal records until an interview has been conducted.

The law on what criminal background checks may be performed depends on the state. Certain states, such as Alabama and Alaska, do not permit criminal background checks. In these states, the only “protection” employees have is the FCRA. Other states, like California, limit an employer’s ability to conduct these checks. In California, employers may not ask about, seek, or consider:

  • Information concerning arrests or detentions that did not result in a conviction.
  • Information that relates to referral and participation in a pre- or post-trial diversion program.
  • Complaints, indictments, arrests and convictions for crimes that are older than seven years.

In addition, under California law, employers with five or more employees cannot ask any questions about criminal history or run a background check until an conditional offer of employment has been made. “Conditional” means the offer is subject to what the background check reveals.

Many states restrict employers’ ability to run credit checks. Some states, such as Idaho and Florida, do not prohibit employers’ ability to run credit checks. Many other states limit the use of credit checks. In Colorado, for example, an employer may not use credit information to make an employment decision, unless:

  • The employer is a financial institution, such as a bank; and
  • The report is related, to a substantial degree, to the job applied for.

Other states, such as Illinois, have similar laws. In Illinois, an employer may not request or use credit history to make employment decisions, unless the credit information is needed to establish fitness for the job.

When Are Employee Background Checks Illegal?

A number of localities have so-called “ban the box” laws that prohibit applicants from being asked to disclose criminal history. In these localities, the employer may not seek such information from another source, either. Ban-the-box laws, sometimes referred to as fair-chance hiring laws, require employers to only consider criminal history after making a conditional offer of employment. Additional restrictions apply when an employer considers criminal history.

In New York City, for example, an employer may only revoke a conditional offer if:

  • The criminal history directly bears upon qualifications and fitness for the position sought; or
  • Hiring the applicant would cause a risk to the public safety that is unreasonable.

Criminal records to sex offenses, workplace violence, child abuse, and other crimes that present risk to the public or render an applicant unfit, may be used in the hiring decision. So, too, may records that reveal an applicant would be unfit for security-related jobs and jobs working with the elderly or vulnerable adults. Even if these records are used to revoke an offer, though, under the New York Fair Chance Act Notice, the employer is required to give the applicant a copy of the background check, and an analysis of the employer’s revocation determination. Applicants are given the opportunity to challenge revocations.

Other background checks and reports are restricted or illegal. Military records and certain bankruptcy records checks are generally not allowed. An applicant’s military records are confidential, under a federal law known as the Privacy Act. The FCRA prohibits bankruptcies ten years or older from being included in a credit report. When an employer requests a credit check, this information should not appear. Information related to judgments and tax liens may not appear on a credit report.

Medical records background checks are generally illegal. The federal Americans with Disabilities Act prohibits employers from conducting background checks to determine if an employee is disabled. Medical exams and drug screenings may only be conducted if they are related to the position, and “consistent with business necessity.”

This means exams and screenings may only be performed when an employer has reason to believe an employee’s ability to perform essential job functions will be impaired by a medical condition. Thus, exams and screenings may only be performed if an employer has reason to believe a medical condition makes an employee a direct threat to the safety of the workplace.

What If I Have a Problem or a Legal Issue with an Employment Background Check?

If an employee believes information on a background check is inaccurate, the employee should describe the errors to the employer. The employee should then file a dispute with whomever conducted the screening service. The FCRA permits employees to file disputes and to have inaccurate information corrected. Disputes can be filed in writing.

If an employee has documentation showing an error was made (such as the background check’s misspelling of your last name in a reporting of a criminal record), the employee should submit this. The screening company has 30 days to investigate a dispute, and another 5 days to inform an applicant of the results. Under the FCRA, information in a background check that cannot be verified must be deleted. The FCRA requires the screening company to provide a revised, accurate report to the employer.

Do I Need a Lawyer for Help with Employment Background Checks?

If you want to have inaccurate background check information removed, or you believe an employer is seeking background information prohibited by law, you should contact an workplace lawyer. An experienced employment lawyer near you can advise you of your rights and options, and how to proceed.

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