The federal Fair Credit Reporting Act (FCRA) sets national standards for employment screening. This law only applies to background checks performed by an outside company such as GroupOne Background Screening, called a “consumer reporting agency” under the FCRA. The law does not apply in situations where the employer conducts background checks in house.
Under the FCRA, a background check report is called a “consumer report.” This is the same name given to your credit report, with the same limits on disclosure. The FCRA says the following cannot be reported:
• Bankruptcies after 10 years;
• Civil suits, civil judgments, and records of arrest, from date of entry, after seven years;
• Paid tax liens after seven years;
• Accounts placed for collection after seven years;
• Any other negative information (except criminal convictions) after seven years.
It is important to know that the above reporting restrictions do not apply to jobs with an annual salary of $75,000 or more a year.
Criminal convictions are reportable indefinitely, unless your state provides otherwise. Many states follow the seven-year rule. To find the limit for reporting criminal convictions in your state, contact your state employment agency or office of consumer affairs.
Please consider your state may have stronger laws. In addition, many state labor codes and state fair employment guidelines limit the content of an employment background check.
Additional laws that should be considered:
• Arrest information. Although arrest record information is public record, employers cannot seek from any source the arrest record of a potential employee. However, if the arrest resulted in a conviction, or if the applicant is out of jail but pending trial, that information can be used. In some states, exceptions exist for the healthcare industry where any employer who has an interest in hiring a person with access to patients can ask about sex related arrests. When an employee may have access to medications, an employer can ask about drug related arrests.
• Criminal history. In some states, criminal histories compiled by law enforcement agencies are not public record. Only certain employers such as public utilities, law enforcement, security guard firms and child care facilities have access to this information. There are private companies that compile virtual “rap sheets.” Employers need to use caution in checking criminal records.
• Workers’ compensation. In most states, when an employee’s claim goes through the state system or the Workers’ Compensation Appeals Board (WCAB), the case becomes public record. An employer may only use this information if an injury might interfere with one’s ability to perform required duties. Under the federal Americans with Disabilities Act, employers cannot use medical information or the fact an applicant filed a workers’ compensation claim to discriminate against applicants. Employers may access workers’ compensation records after making an offer of employment. Although WCAB may not reveal medical information and the employer may not rescind an offer due to a workers’ compensation claim, employers sometimes discover that applicants have not revealed previous employers where they had filed claims. In such situations, employers often terminate the new hire because it appears they falsified the application.
• Bankruptcies. Bankruptcies are public record. However, employers cannot discriminate against applicants because they have filed for bankruptcy.
Although these laws should prevent an employer from considering certain information, there is no realistic way for the applicant to determine whether such information will be revealed in a background check. This is particularly true for investigations conducted online where the information obtained might not be verified for accuracy or completeness.
Reputable employment screening companies such as GroupOne always verify negative information obtained from database searches against the actual public records filed at the courthouse.
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