Overview: Proactive employers often turn to employee background checks in an effort to ferret out high-risk job candidates. This can include a check of criminal history records, as well as an applicant's credit history and references.
However, there are several steps an employer must take to ensure such measures comply with the law. In particular, it must follow the federal Fair Credit Reporting Act's notice and consent requirements before conducting a background check. In addition, HR should be aware that some states prohibit employers from asking about arrest records and limit or prohibit consideration of convictions that have occurred long ago.
An employer that decides to conduct employee background checks of prospective employees should do so consistently to avoid the risk of a discrimination claim. Statistics have shown that such checks tend to have a greater impact on minority applicants.
Trends: Several states, including California, Illinois and Connecticut, have enacted laws in the last few years limiting the use of credit checks to certain types of jobs such as those involving financial data or sensitive information. A host of similar measures have been introduced elsewhere, so this is a trend that bears watching.
Author: David B. Weisenfeld, JD, Legal Editor
Updated to reflect forthcoming laws expanding employer requirements regarding juvenile records and transportation network criminal background checks.
Updated to incorporate the new medical marijuana law, effective September 6, 2016.
Updated to reflect a forthcoming New Orleans credit check ban for city contractors.
Updated to reflect the Portland 'ban the box' ordinance, effective July 1, 2016.
Updated to reflect the Portland Ban the Box Ordinance, effective July 1, 2016.
Updated to reflect credit information protections under the Philadelphia Fair Employment Practices Ordinance, effective July 7, 2016.
Updated to reflect forthcoming Connecticut 'ban the box' law applying to any employer.
Updated to reflect a forthcoming ban on criminal history questions on an initial job application.
Legal considerations for HR concerning employee background checks of job applicants and employees. Support on properly conducting background checks.