Are Background Checks for Employment Regulated?

background checks for employmentWell, sort of.  The truth is the regulation of background checks for employment is very conditional. Okay, what does that mean?  Yes there is the Fair Credit Reporting Act (FCRA), the Driver Privacy Protection Act (DPPA), EEOC and a myriad of state laws.

And it is true that they offer some form of regulation.  For example, the FCRA limits the reporting of non-convictions (arrests, not guilty, pre-trial diversion, etc) to 7 years….Well, sort of.  The FCRA adds a condition that if the employment position exceeds $75K then the reporting limit is removed.

There are a handful of states that further restrict reporting of criminal records.  Most of them also add a condition that the restriction only applies if the salary of the position is under $20K or $25K.

New Mexico is a state that provides regulations with no conditions.  If the criminal record, conviction or non-conviction, is older than 7 years then it is not reportable.  That means NM employers will not see the criminal record of a murderer or sex offender if the applicant has been released from prison and off parole for more than 7 years.

There have been a half dozen states pass laws restricting the use of credit reports for employment (CA and CT most recently).  Most of these states stipulate that an employment credit report can still be used for financial positions.

As you can see, most of the regulations relate to what can and cannot be reported, a strong focus on consumer protection.   There are not any employer protections to make sure you are receiving high quality background checks.

There is absolutely nothing in the FCRA, EEO or state laws that require background screening firms to adhere to high quality standards for conducting background checks for employment.  There is absolutely no standard of care in the industry.

The FCRA does NOT require:

  • Comprehensive background checks.  As a standard, most firms only provide a 7 year search.  So do you want to work with a firm providing a 7 year search or a 20 year search?
  • Alias or Other Names to be searched.  Do you want to work with a screening firm that searches all names associated with the applicant or just the name you enter?
  • Criminal records to be verified with a court of record.  It encourages this but also allows for the reporting of “stored data” as long as the same information is provided to the applicant.  Poor practice.

So where does that leave us?  We need to understand that background checks for employment are not highly regulated and this has lead to a low quality standard from the screening industry.  Yes, you may live in a state with further restrictions and it is critical to understand this.  However, most screening firms will place the onus of compliance on you.

Not us.  We start our education during the onboarding process and it operates continuously through our blog and webinars.  We are not just a data provider but a partner and are committed to making your background screening program the most comprehensive available which includes keeping you informed of changes in laws or best practices.

Are you ready to work with a screening firm that provides the highest standard of care possible?  Contact us today.