Skip to main content

Background Checks: What Employers Need To Know Before Hire

By May 22, 2019June 4th, 2019Human Resources

By Derek Ross, Human Resources Consultant, East Coast Risk Management

During the hiring process, employers often want to consider the backgrounds of potential employees for liability reasons. For example, some employers might try to find out about the person’s work history, education, criminal record or driving record. However, any time you use an applicant’s or employee’s background information to make an employment decision, you must comply with applicable state and federal laws.

Please Note: It’s important to review the laws of your state and municipality regarding the use of background information for employment purposes.

For example: Many states hold employers to disclosure requirements that go beyond the requirements of the FCRA. Those states include California, Georgia, Illinois, Minnesota, New York and Oklahoma. Other states set limits on the information an employer may use when making a decision not to hire or promote. For instance, many states will not allow employers to consider a charge without an actual conviction. Some states also prohibit employers from using ANY information about convictions that are more than 7 years old while others may allow the use of the information, but require employers to justify how that criminal record would impact an individual’s ability to perform a specific job.

A few other states have very specific limitations. For example, Georgia and Massachusetts limit the use of “first offense” cases, while California limits the use of sex offender registry information or marijuana-related convictions that are more than two years old. Due to the fact that state laws vary widely and continue to change, it is best to check with your state’s department of labor for more information about what is required for your background check process.

For an extensive listing of state laws regarding employer use of conviction records, click here.


Abiding By the FCRA

The Fair Credit Reporting Act (FCRA) is a federal law that regulates credit reporting agencies and compels them to ensure the information they gather and distribute is a fair and accurate representation of a consumer’s credit history.

The FCRA has a number of requirements employers must follow when using the background information of an applicant or employee if that information is run by a third party consumer reporting agency. Failure to comply with these requirements can result in legal action against the employer.

One such requirement is that an employer CANNOT disqualify or take action against a candidate or employee based on the results of a background check without providing the individual with the following information:

  1. A copy of a form summarizing rights under FCRA
  2. A copy of the individual’s consumer report
  3. A copy of applicable state or local notices
  4. An opportunity to dispute the information contained with report

It is highly advisable for employers to have background and credit check forms as well as procedures reviewed by legal counsel to ensure compliance with FCRA requirements. Failure to comply with any of the above requirements is a violation of the FCRA and leads to liability.  Regarding #1 on that list, employers need to utilize the new summary of rights form required as of September 21, 2018. Not sure if you’re in compliance? Check out our blog on the new FCRA form.


Overall Best Practices When Approaching Background Checks:

  • Determine the business purpose for gathering criminal history before you post the position
  • Do not run a check until after you have a conditional offer of employment
  • Keep convictions in context if they were relatively minor, occurred more than 5 years ago, and there is no history of repeat offenses
  • Give the candidate an opportunity to respond
  • Protect the candidates’ privacy
  • Document everything


If you are an employer with questions about this or any issue relating to safety, human resources or workers’ compensation, contact East Coast Risk Management by calling 724-864-8745 or emailing us at

Disclaimer: The information provided on this web site is for informational purposes only and not for the purpose of providing legal advice. Use of and access to this Web site do not create an attorney-client relationship between East Coast Risk Management or our employment law attorney and the user or browser.