Background Check

Employers can conduct various types of background checks depending on the position and industry:

Criminal History Check: Searches federal, state, and county criminal records for felonies, misdemeanors, and pending charges. The scope can range from a single county to a comprehensive nationwide search. Sex offender registry searches are often included.

Employment Verification: Confirms previous job titles, dates of employment, and sometimes salary and reason for leaving. This is done by contacting former employers directly or through a verification service.

Education Verification: Confirms degrees, diplomas, certifications, and dates of attendance from educational institutions. Resume fraud is more common than most employers realize — studies suggest 30-40% of resumes contain some form of exaggeration.

Credit Check: Reviews the candidate's credit history, including payment history, outstanding debts, bankruptcies, and liens. Primarily used for positions involving financial responsibility (banking, accounting, positions with access to company funds).

Motor Vehicle Records (MVR): Checks driving history for positions that involve operating company vehicles or driving as a primary job duty.

Professional License Verification: Confirms that required licenses (medical, legal, real estate, etc.) are current and in good standing.

Drug Testing: While technically separate from a background check, drug screening is often conducted as part of the pre-employment screening process.

Social Media Screening: Some employers review candidates' public social media profiles. This practice carries significant legal risks if protected class information influences hiring decisions.

The Fair Credit Reporting Act (FCRA) is the primary federal law governing employment background checks. Employers must follow strict procedures:

Before the Background Check:

1. Provide the candidate with a clear, standalone written disclosure that a background check will be conducted

2. Obtain the candidate's written authorization (consent) before running the check

3. The disclosure must be a separate document — it cannot be buried in the job application

If Taking Adverse Action Based on Results:

If the employer decides not to hire (or to take other adverse action) based on the background check, the FCRA requires a two-step process:

1. Pre-adverse action notice: Before making a final decision, provide the candidate with a copy of the background report, a summary of their rights under the FCRA, and reasonable time (typically 5 business days) to review and dispute any inaccuracies

2. Final adverse action notice: After the waiting period, if the employer still decides to take adverse action, send a final notice that includes the name of the consumer reporting agency, a statement that the agency did not make the hiring decision, and notice of the candidate's right to dispute the report and obtain a free copy

Skipping either step exposes the employer to FCRA lawsuits, which can include statutory damages of $100 to $1,000 per violation, actual damages, punitive damages, and attorney fees. Class action FCRA lawsuits are common and can cost millions.

A growing number of jurisdictions have enacted "ban the box" laws that restrict when and how employers can ask about criminal history:

Federal: Federal agencies and contractors are prohibited from asking about criminal history on job applications under the Fair Chance Act.

State Laws: Over 35 states have adopted some form of ban-the-box legislation. These laws generally require employers to delay criminal history inquiries until after an initial interview or conditional job offer.

Local Ordinances: Many cities have their own fair-chance hiring laws, sometimes stricter than state law. New York City, San Francisco, Los Angeles, Chicago, Philadelphia, and many others have enacted local ordinances.

Key Provisions Typically Include:

EEOC Guidance: The Equal Employment Opportunity Commission has issued guidance cautioning employers against blanket policies that automatically disqualify candidates with criminal records. Such policies can have a disparate impact on racial minorities and may violate Title VII. Employers should conduct individualized assessments considering the nature of the crime, time elapsed, and the nature of the job.

Follow these best practices to conduct effective, compliant background checks:

Develop a Consistent Policy: Define which positions require background checks and what types of checks are appropriate for each role. Apply the policy consistently to all candidates for the same position to avoid discrimination claims.

Use a Reputable Screening Provider: Work with a consumer reporting agency (CRA) that is FCRA-compliant, uses accurate databases, and provides support for adverse action procedures. Verify the CRA's compliance practices and error rates.

Be Transparent: Clearly communicate your background check policy to candidates early in the hiring process. Transparency builds trust and gives candidates the opportunity to address potential issues proactively.

Time Your Checks Appropriately: Conduct background checks after a conditional offer, not at the application stage. This complies with ban-the-box laws and avoids wasting resources on candidates who don't advance.

Individualize Decisions: Don't use automated rejection based on background check results. Evaluate each situation individually, considering the relevance of findings to the specific position, how much time has passed, and evidence of rehabilitation.

Maintain Confidentiality: Background check results contain sensitive personal information. Limit access to HR personnel who need the information for hiring decisions. Store reports securely and dispose of them according to your records retention policy.

Stay Current on Laws: Background check laws change frequently at the state and local level. Regularly review your policies and procedures with legal counsel to ensure ongoing compliance.