There is a complex web of federal, state, and local laws impacting background checks and the information employers may consider in hiring decisions. These regulations may vary based on a candidate or employer's location, which can be challenging for any HR team to manage. Learn how Checkr helps enable compliance so you can hire faster with less risk.
Background checks are often used by employers during the hiring process. They can provide insight to identify qualified applicants and help mitigate the possibility of negligent hiring claims when used appropriately. However, while background checks can be a valuable tool, employers who use them for employment decisions must understand the numerous screening laws pertaining to a fair and legally-compliant hiring process.
Background check compliance is complex. There are screening laws at the federal, state, county and city levels that may restrict the timing of when you can run a background check as well as the type of information you can consider.
Failing to adhere to compliance laws may have serious consequences, which may include potential legal action from government entities or candidates, expensive fines, damage to company reputation, and more.
Organizations should pay attention to background screening requirements that might apply to them. However, because there are numerous compliance guidelines, and because they change often, it can be difficult to efficiently meet every requirement. Using an accredited, professional background check provider that prioritizes compliance for its customers can help simplify the process for you.
Below, we’ll discuss which background checks laws you need to know, and how Checkr simplifies background check compliance with responsible reporting, robust decisioning tools, and support for adverse action.
State of Screening Compliance
A new survey report highlights seven key insights into how organizations are managing background check compliance.
Background check laws to know
Background screening laws and regulations may vary at the city, county, state, and federal levels. Some of the most relevant laws pertaining to background checks include the following:
- Fair Credit Reporting Act (FCRA): The federal FCRA requires employers who use a background check provider to follow certain rules. These include disclosing to the candidate that a background check is being performed, and obtaining consent prior to performing the screening. Employers must also provide job candidates with a copy of their background check report, if requested.
- Ban the Box laws: Fair hiring laws, also called Ban the Box laws, may impact when employers are permitted to ask about a candidate's criminal history or run a criminal background check during the hiring process, among other stipulations. Ban the Box laws vary by state or local jurisdictions (though not all states have such laws) with some states restricting employers from performing a criminal background check until after an interview or making an official offer.
- EEOC guidelines: The Equal Employment Opportunity Commission enforces laws that prohibit employers from discriminating against candidates based on their race, color, sex, religion, national origin, age, disability, and/or genetic information. EEOC violations may result in fines or legal consequences. Additionally, the EEOC has provided guidelines for the consideration of how a candidate’s criminal background information is used during the hiring process.
- State regulations: Regulations pertaining to background checks vary by state, and even local jurisdictions. These regulations may impact how far back into a candidate's history the screening can go, which information can be reported, and more.
For example, 9 states (California, Kansas, Maryland, Massachusetts, Montana, New Mexico, New York, New Hampshire, and Washington) limit the reporting of felony or misdemeanor convictions to 7 years, unless an exception applies.
Regardless of partnering with a background check provider or searching on your own, employers are ultimately responsible for remaining up-to-date on applicable laws and ensuring compliance based on the needs of your company, your industry, or candidate location.
Managing compliance on your own is difficult
There is a complex web of laws impacting background checks and the information employers can consider in hiring decisions. Federal laws, such as the FCRA, may be applicable along with state and local fair hiring laws. The complexity is especially challenging when hiring in multiple locations. A DIY-approach to compliance is often a time-consuming, manual process. Moreover, reviewing background check results while trying to understand the myriad of applicable laws is prone to human error and unconscious bias, while slowing down the hiring process.
Utilizing a background check provider may enable your compliance with relevant city, county, state, and federal laws while also providing a streamlined and efficient hiring process. Checkr helps you avoid making hiring decisions based on information that’s not legally reportable by automatically filtering out records based on local restrictions.
How Checkr helps you hire faster with less risk
While background check providers may share similarities, not all of them help you meet compliance laws. Using a provider that lacks these capabilities may leave you vulnerable to potentially serious consequences. By building compliance workflows and features into its platform, Checkr helps its customers maintain compliance when using background checks to make hiring decisions. Here’s how we make meeting background screening regulations easy:
Disclosure and consent
The FCRA governs how background checks may be administered and requires employers to provide proper disclosure of their intent to conduct a background check and receive authorization from the candidate to do so. Checkr helps streamline this process by providing disclosures and authorizations within the platform for the candidate to sign electronically. If the candidate or job location is in a state with additional disclosure requirements (like California), Checkr may automatically provide the additional state-specific disclosures based on how the screening is ordered.
Smart decisioning tools
Checkr features robust decisioning tools that yield numerous compliance benefits. For example, Checkr features adjudication tools to help speed review time, reduce potential hiring bias and increase efficiency. Our adjudication suite allows you to define which charges are not relevant to the positions you’re hiring for and therefore do not need to be returned on a background check report. These can be filtered by severity (misdemeanor vs. felony), time elapsed, dismissal status, and more so you only see the information you want — and need — to see. By filtering out irrelevant offenses that don’t disqualify a candidate, you increase your pool of eligible candidates, save valuable time, and engage in more consistent hiring practices.
Support with adverse action
There may be times when you’re faced with a challenging hiring decision based on the results of a background screening. If you decide you may not hire a candidate, you must inform them of your decision through a process called adverse action. This includes sending the candidate a pre-adverse action notice allowing them to review the background check report and provide additional context about their records or address any information they consider inaccurate, reviewing the candidate’s response, and issuing a final adverse action notice explaining your decision. These notices must provide information about why the applicant was denied employment and their right to dispute any inaccurate information on their report.
Should this occur, it’s important to remain compliant with adverse actions regulations to mitigate risk of a potential lawsuit. Checkr helps you meet adverse action regulations by:
- Setting up an adverse action email address to send notices on your behalf
- Generating pre- and post-adverse action emails that include additional attachments, like a copy of the required documents or notices
- Managing mandatory waiting periods automatically
- Allowing candidates to provide additional context or dispute inaccuracies on their report within the Candidate Portal
- Providing optional steps to conduct individualized assessments in jurisdictions where it is required
Support with individualized assessments
Individualized assessments are used to review a candidate’s criminal record on a case-by-case basis. The process is used to help you determine whether or not a candidate's criminal history is relevant to a particular position. The EEOC suggests considering three criteria, known as the nature-time-nature test, when reviewing criminal history:
- The gravity and nature of the offense
- The time passed since the offense occurred
- The nature of the job being applied for or sought
This process may help you make more informed decisions as well as give candidates the opportunity to explain their circumstances.
Checkr offers our Candidate Stories feature that enables candidates to share additional context around records or prior circumstances. You can view this information directly on our platform, helping you to make faster, confident hiring decisions based on a more complete picture of the candidate. This can also help you comply with non-discrimination regulations and support fair hiring while expanding your hiring pool.
Get peace of mind with Checkr
The legal landscape is ever changing and it’s important to pay attention to your compliance needs with applicable regulations. Checkr’s compliance engine helps customers comply with federal, state, and local laws to help simplify alignment with requirements by location. Our intuitive and easy-to-use reporting filters, adjudication tools, and automated adverse action workflow also enable compliance for confident hiring.
The resources provided here are for educational purposes only and do not constitute legal advice. We advise you to consult your own counsel if you have legal questions related to your specific practices and compliance with applicable laws.
About the author
Sara Korolevich serves as checkr.com’s editor and content manager. In this role, she produces educational resources for employers on a broad range of screening topics, including background check compliance and best practices. She also writes about Checkr’s company and product news to keep customers updated and informed.