Beyond the FCRA – State and Local Background Check Laws

When it comes to running contractor background checks, federal law isn’t the only thing to consider. A growing number of states and localities have their laws for criminal background checks. You must ensure your background checks are being appropriately conducted based on the specific state and local laws that apply. Even if you outsource this task to a third-party background screening service or a contract staffing back-office, it will fall back on you.

Here are some standard variables to watch out for:

Ban the Box laws

The practice of asking candidates about their criminal histories on the application has come under fire. This attention has inspired many states and localities to pass what is known as a “Ban the Box” law. Some laws only apply to public employers, while others also include private businesses. These laws also vary on when in the hiring process an employer CAN inquire about a candidate’s criminal background. However, it is generally best practice to wait until a contingent job offer has been made before running a criminal background check, even if there is no law on the matter.

Arrest records 

In several areas, the use of arrest records to make employment decisions is either limited or prohibited. The logic behind these laws is that someone who has been arrested and charged may not ultimately be found guilty.

Length of Time

Some laws set limits on how far you can go back. Remember that the Fair Credit Reporting Act (FCRA), which applies no matter where you are doing business, prohibits the use of civil suits, civil judgments, records of arrest, and other non-conviction records older than seven years old. In areas with specific background check laws, these types of restrictions apply to conviction records, as well. 

However, some of these laws waive this restriction if the salary will exceed a certain amount or if the person will be working in specific positions. For instance, California prohibits credit reporting agencies from disclosing records that are seven years old or older, but they will allow older files to be used if the person is underwriting life insurance involving $250,000 or more. Colorado’s 7-year restriction on records can be lifted if the person will be making $75,000 or more per year.

Taking adverse action

Some areas prohibit employers from taking adverse action based solely on a conviction and require them to take certain factors into account, such as the relationship of the sentence to the specific position, how long it has been since the candidate was convicted or released, and whether or not they have been formally rehabilitated.

Keep Variations in Mind

These are just some of the most common examples. Other states and localities may have restrictions not covered here. It is important to note that the level of restrictions can vary from state to state, too. Two states may have a Ban the Box law, but in one state, you may be able to ask about criminal background after the first interview where you may have to wait until you have made a job offer in another state. 

The point is to be sure you are following all the laws in any state where you are placing contractors. This can be particularly difficult to keep track of if you are doing business in multiple states. Using a background check screening service can make it easier, but you will want to make sure that they are on top of these ever-changing laws. 

Also, keep in mind that these restrictions may cause delays in getting your background check results. Be sure that your clients understand how long it could take. If they require that contractors clear a background check before they can start, this could impact the start date.

Finally, you want to be sure that the FCRA and the EEOC’s guidelines are always being followed. This can help ensure that a process that is intended to protect your firm and clients will not instead cause more harm than good.

This general summary of these laws should not be used to solve individual problems since changes in each situation may require a material variance as to the applicable law. This article is for information purposes only and should not be construed as legal advice.

Posted in EOR