Read More Below:

Expand all Collapse all

• I don't have anything to hide. Why should I worry about a background check?

  It’s true that a spotless personal background can only enhance a job candidate’s chances of landing a job. However, as in any field, there are those report providers who cut corners and don’t follow the federal and state laws, creating bad reports for an otherwise clear background. Sometimes irrelevant or outdated information is used to produce the report, not respecting the responsibility of the provider to use accurate and up-to-date sources. A further concern is that the report might include information that is illegal to use for hiring purposes or which comes from questionable sources.

  The solution to these concerns is to only work with a reputable background check provider that can answer live questions on the phone with employees in a physical commercial location. An even better level of competency and security is provided by those background screening firms that are state-licensed investigators.

• What Is Included in a Background Check?

  The term “background check” is a vague description that can range from a simple SSN verification to an executive-level report. Here are some of the components or information that might be included in a background check.

    Driving records
    Vehicle registration
    Credit records
    Criminal court records
    Social Security Number
    Education records
    Civil court records
    Workers' compensation
    Bankruptcy
    Character references
    Neighbor interviews
    Medical records
    Property ownership
    Military records
    State licensing records
    Drug test records
    Past employers
    Personal references
    Incarceration records
    Sex offender lists
    Liens & Judgments
    Government Sanctions and Excluded Parties list

  Information to be included in a background check will almost certainly depend to a large extent on the employer and the scope of the job involved. The level of scrutiny should match the position being filled. Where necessary a clearly defined business need for a credit report must be demonstrated.

• What Cannot Be Included a Background Check Report?

  The federal Fair Credit Reporting Act (FCRA) sets national standards for employment screening or employment background check. However, the law only applies to background checks performed by an outside company, called a "consumer reporting agency" under the FCRA. The law does not apply in situations where the employer conducts background checks in-house, unless the employer utilizes commercial services to acquire their data.

  Some states may have stronger laws, such as California's Investigative Consumer Reporting Agencies Act (Civil Code §1786) and the California Consumer Credit Reporting Agency Act (Civil Code §1785). In addition, many state labor codes and state fair employment guidelines limit the content of an employment background check.

  Under the FCRA, a background check report is called a "consumer report." This is the same "official" name given to your credit report, and the same limits on disclosure apply. 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
  
  
  
  The most recent change to the FCRA made criminal convictions reportable indefinitely in most states. California still follows the seven-year rule (CA Civil Code 1786.18) as do some other states.

• Tell me more about California’s background screening laws

  CA Arrest information

  While arrest records are public information, employers cannot seek and should not utilize from any source the arrest record of a potential employee. If that arrest resulted in a conviction, or if the applicant is out of jail but pending trial, that information can be used. (California Labor Code §432.7).

  An exception exists for the health care industry where any employer who has an interest in hiring a person with access to patients can ask about sex related arrests. Additionally, when an employee may have access to medications, an employer can ask about drug related arrests.

  CA Criminal history

  In California, 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. (California Penal Code §§11105, 13300)

  With the advent of computerized court records and arrest information, however, there are private companies that compile criminal record databases from the participating counties and states across the nation. This database is not a comprehensive list of an individuals’ criminal past as not all jurisdictions report.

  Often these criminal record database reports offered to the public by web-based information brokers are not always accurate, may not include a secondary identifier such as date-of-birth or they are not updated regularly. These “raw” records violate both federal and California law when reported and used this way. Also, in California, an employer may not inquire about a marijuana conviction (personal use; under 28 grams) that is more than two years old.

  The county court record is the most reliable and accurate source of criminal records available. The reputable and professional background screen companies will default to the county courthouse criminal record search format.

• CA Worker’s Compensation

  In California, employers may access Workers' Compensation records after making an offer of employment. Although the agency may not reveal medical information and the employer may not rescind an offer due to a workers' compensation claim (California Labor Code 132a), 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.

• How is this information used?

  Although the various federal and state 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 from web-based information brokers might not be verified for accuracy or completeness.

  For example, if you were arrested but never convicted, a database search might reveal the arrest. For many suppliers this is what is delivered. A superficial report not delving further into the public records to determine if you were acquitted or the charges were dropped might be returned. Reputable employment screening companies always verify negative information obtained from data base searches against the actual public records filed at the courthouse.

• Can an employment application ask about things that should not be reported?

  The FCRA does not prohibit an employer from asking questions in an employment application. For example, an employment application might ask if you have "ever" been arrested. The FCRA says a consumer reporting agency cannot report an arrest that from date of entry was more than seven years ago. It does not say the employer cannot ask the question.

  State employment laws may limit the questions an employer includes on a job application. For example, in California an application may ask "job related questions about convictions except those that have been sealed, or expunged, or statutorily eradicated," but applications cannot ask "general questions regarding an arrest."

• Aren't some of my personal records confidential?

  The following types of information may be useful for an employer to make a hiring decision. However, under the federal Fair Credit Reporting Act, the employer is required to get your permission before obtaining the following types of records:

    Education records
    Military service records
    Medical records
    Driving Records
    Credit History
  
  

  There are other questions such as age, marital status, and certain psychological tests that employers cannot use when interviewing. These inquiries are beyond the scope of just gathering identification information.

• What can my former employer say about me?

  A former employer can say anything that is truthful about your performance. However, most employers have a policy to only confirm dates of employment, final salary, and other limited information. For instance, California law prohibits employers from intentionally interfering with former employees' attempts to find jobs by giving out false or misleading references. (California Labor Code §1050)

• Who Conducts the Background Checks?

  There are many companies that specialize in employment screening. The most important thing to keep in mind is that companies conducting background checks fall into several broad categories. This can range from individuals commonly known as "private investigators," to companies that specialize in employment screening and to online data brokers. It is always wise to deal with reputable agencies, such as those that are members of The National Association of Professional Background Screeners.

• The Fair Credit Reporting Act and Background Checks

  The federal Fair Credit Reporting Act (15 USC §1681 et seq.) does not require employers to conduct employment background checks. But the law sets a national standard that employers must follow in employment screening. State laws may give an employee more rights than the FCRA.

• Do I have a right to know when a background check is requested?

  Under the FCRA, the employer must obtain the applicant's written authorization before the background check is conducted. The authorization must be on a document separate from all other documents such as an employment application. In California, at the time an employer obtains permission for a background check, the applicant or employee should also be told that he or she may request a copy of the report. The FCRA, in contrast, says the subject is entitled to a copy of the report if a pre-adverse notice is given.

  Under federal law, if the employer uses information from the consumer report for an "adverse action" - that is, denying the job applicant, terminating the employee, rescinding a job offer, or denying a promotion - it must take the following steps:

   Before the adverse action is taken, the employer must give the applicant a "Pre-Adverse Action Disclosure." This includes a copy of the report and an explanation of the consumer's rights under the FCRA.
  
   After the adverse action is taken, the individual must be given an "Adverse Action Notice." This document must contain the name, address, and phone number of the employment background check company, a statement that this company did not make the adverse decision, rather that the employer did, and a notice that the individual has the right to dispute the accuracy or completeness of any of the information in the report.
  
  

• There is an error in my background check report. They have me mixed up with another person with a similar name and a criminal record. What should I do?

  First, talk to the employer. Explain the report’s errors, and tell the employer you intend to file a dispute with the employment screening company. Although the FCRA does not require the employer to hold the job for you, a sympathetic employer may be willing to give you a chance to correct any errors.

  Next, file a dispute with the employment screening company that you believe made the error. You may first call the company and tell them about the error. Then follow-up with a written dispute letter pointing out the errors in the report. Send your letter certified mail, return receipt requested.

  Along with your letter you may submit information that verifies your side of the story. For example, you may have a common name. The background check report may show a criminal record for someone with your first and last name but with a different middle initial.

• What happens after I file a dispute with the employment screening company?

  After you file your dispute, the screening company has 30 days to investigate. If, during that 30 day period, you file additional information, the investigation may be extended by another 15 days. So, 45 days is the maximum time allowed for considering your dispute.

  If information in your background screening report cannot be verified, it must be deleted. You must receive written notice of the results of the investigation not later than five business days after the investigation is completed. You can ask the screening company to send the revised report to anyone who has received an employment report about you within the last two years. You also have the right to receive another free copy of your report within 60 days.

  For more on employment background checks and your rights under the FCRA, see the Federal Trade Commission publication and Credit Reports.

• FCRA Update: Workplace Investigations

  Recent amendments to the FCRA, known as the Fair and Accurate Credit Transactions Act of 2003 or FACTA, set a new standard for what FACTA calls "employee misconduct investigations."

• What is an "employee misconduct investigation?"

  This is an investigation conducted by a third-party your employer may hire if the employer suspects you of:

   Misconduct relating to your employment.
   A violation of federal, state or local laws or regulations.
   A violation of any preexisting written policies of the employer.
   Noncompliance with the rules of a self-regulatory organization that, for example, oversees the securities and commodity futures industry.

• If my employer suspects me of misconduct, what does this mean for me?

  It means your employer does not have to give you notice and get your permission to conduct a misconduct investigation. Like other inquiries covered by the FCRA, this only applies if the employer hires an outside party to conduct the investigation.

  It also means you will not receive a notice of your rights as others who are subject to a standard employment background check normally would. If, at the end of the investigation, the employer decides to take some action against you, you receive the "adverse action" notice only after the action has been taken.

  You will receive only a "summary" of the investigation report, but not the more detailed report that may include sources.

• Who will see the investigation report?

  The report may be communicated to:

   The employer or its agent.
   Any federal or state officer, agency or department or any officer, agency or department of a unit of general local government.
   Any self-regulatory organization with regulatory authority over the activities of the employer or the employee.
   Others, as is otherwise required by law; or
   A government agency, in accordance with an existing FCRA section that allows a consumer reporting agency to disclose personal identifying information to a government agency.
  

   

• Can I dispute the findings?

  Not under the FCRA dispute procedure. That is because this new section on workplace misconduct investigations was affected by removing this type of investigation from the definition of "consumer report." Thus, the usual protections that apply to a "consumer report" conducted for employment purposes do not apply to workplace misconduct investigations. If you find yourself in this position, you will probably want to seek the advice of an employment law attorney

• Background Checks and Your Credit Report

  An employment background check often includes a copy of your credit report. The three major credit reporting agencies (Experian, TransUnion, and Equifax) provide a modified version of the credit report called an "employment report." An "employment report" includes information about your credit-payment history and other credit habits from which current or potential employers might draw conclusions about you.

  An employment report provides everything a standard credit report would provide. However it doesn't include your credit score or date of birth. Nor does it place an "inquiry" on your credit file that may be seen by a company looking to issue you credit. Having too many credit inquiries tends to lower your credit score.

• My job doesn't require handling money. Why does the employer do a credit check?

  Often employers use your credit history to gauge your level of responsibility. Whether a valid assumption or not, some employers believe if you are not reliable in paying your bills, then you will not be a reliable employee. Unfortunately, a bad credit report can work against you in your search for employment. For more on how a credit record can affect your job search, see the FTC's fact sheet on this topic, In addition to your payment history, a credit report typically includes information about your former addresses and previous employers. Employers can use this as one way to verify the accuracy of information you provide on an application or resume.

• Can my employer continue to check my credit after I’ve been hired?

  Yes. The FCRA allows employment checks not only for hiring purposes but for other employment purposes such as promotion, retention, or transfer. Credit checks for the purposes of retaining you as an employee allows the employer to check you credit periodically. Once you have given your permission, you generally need not be asked again.

  Employers may run periodic checks, for example, as a way to identify individuals who have a high debt to salary ratio. To an employer, an employee who is overextended financially may be more prone to stealing from the company.

• Can an employer ask my friends and neighbors about me?

  Yes they can. Under the FCRA, a background check that includes interviews with "neighbors, friends, or associates" about your "character, general reputation, personal characteristics, or mode of living" is called an "investigative consumer report." When information about you is gathered from interviews, the FCRA requires a separate disclosure. In California, only a licensed Private Investigative Agency can conduct an "investigative consumer report."

• Contacting Government Agencies

  U.S. Equal Employment Opportunity Commission (EEOC)

  1801 L Street, N.W.
  Washington, D.C. 20507
  Phone: (202) 663-4900
  TTY: (202) 663-4494
  Web: www.eeoc.gov

  
  

  EEOC Field Offices

  To be automatically connected with the nearest EEOC field office, call:
  Phone: (800) 669-4000
  TTY: (800) 669-6820

  
  

  Federal Trade Commission (FTC)

  Consumer Response Center, CRC-240
  Washington, D.C. 20580
  Phone: (877) FTC-HELP (877-382-4357)
  TTY: (866) 653-4261
  Web: www.ftc.gov

  
  

  California Department of Fair Employment and Housing

  The Department of Fair Employment and Housing does not currently accept complaints through the Internet or by mail. For information on how to file an employment-related complaint, call one of the numbers below:
  (800) 884-1684 (Within California)
  (916) 227-0551 (Outside California)
  Web site: www.dfeh.ca.gov

  We acknowledge the assistance of the Privacy Rights Clearinghouse™, the National Association of Professional Background Screeners™ and Barry Nadell, Nadell Investigations™ in developing this information guide.