Background Checks and Employment: What Employers Can and Cannot Do

Employment background checks are common, but they're also governed by specific federal and state rules designed to protect applicants and employees from unfair or inaccurate use of their history.

Federal Disclosure and Consent Requirements

Under the Fair Credit Reporting Act, an employer using a third-party background check company must provide clear written disclosure and obtain the applicant's written consent before running the check.

If information from the background check leads the employer to consider not hiring or to terminate someone, specific pre-adverse and adverse action notice procedures must generally be followed, giving the individual a chance to review and dispute the report before a final decision.

Ban-the-Box and Criminal History Restrictions

Many states and cities have "ban-the-box" laws that prohibit employers from asking about criminal history on an initial job application, delaying that inquiry until later in the hiring process.

Some jurisdictions go further, requiring an individualized assessment of how a specific criminal conviction relates to the job in question, rather than allowing a blanket policy of disqualifying anyone with a record.

Credit Checks and Other Limitations

A growing number of states restrict employers from using credit history in hiring decisions except for certain positions, such as those involving financial responsibility.

Applicants who believe a background check was used improperly, or that inaccurate information wasn't corrected despite a timely dispute, may have claims under both federal and state law.

Frequently Asked Questions

Can an employer reject me based on an old criminal conviction?

It depends heavily on state and local law and the nature of the job — many jurisdictions require some individualized assessment rather than an automatic disqualification.

What if my background check contains inaccurate information?

You generally have the right to dispute inaccurate information with the reporting agency and to have it corrected before an adverse employment decision is finalized.

Background check disputes involve specific procedural protections that employers don't always follow correctly. An employment attorney can help you understand your rights if a background check affected a job opportunity.