The Definitive Guide to Pre-Employment Background Checks

As an employer, you need more information about your prospective job applicants before you can properly finalize your hiring decision. After all, some individuals may give false or incomplete information, or keep crucial information about their personal lives and their pasts firmly in the dark. Hence, it makes business sense to perform pre-employment background checks on job applicants to determine if they are the right people for the job.

Since employers are legally held responsible for ensuring the safety of their employees and the workplace, a streamlined and well-established pre-employment screening process also reduces the risk of negligent hiring liability.

The following list covers the types of information that employers often consult as part of the pre-employment screening process. Included are the federal and state laws that govern access to information and deliberation during the hiring process.

Credit Reports

Under the Fair Credit Reporting Act, or FCRA (15 U.S.C. §1681), employers are required to obtain applicants’ or employees’ written consent before seeking their credit reports. Written consent is also required before employers can hire third-party agencies to provide these consumer reports.

A consumer report includes any information regarding an applicant’s credit or character and information about credit history, criminal history, and employment history

If you decide not to hire someone based on the information found on the report, you must provide a copy of the report to the applicant and inform the applicant of his or her right to challenge the report under the FCRA. Additionally, some states may apply stricter rules limiting the use of consumer reports in pre-employment screenings, including checking an applicant’s credit history.

The recent recession—and the resulting damage to credit reports and credit scores of numerous Americans—has led many politicians to question whether it’s really appropriate for employers to use credit reports to influence their hiring decisions. Seven states have passed laws prohibiting employers from pulling up credit reports, or limiting them from basing their hiring decisions on such reports. Twenty more states are in the process of considering such legislation.

Criminal Records

To what extent a private employer may consider an applicant’s criminal history during the hiring process varies from state to state (with some states having additional requirements). The FCRA prohibits consumer reports from including arrest records that are more than seven years old, unless the position pays an annual salary of more than $75,000. On the other hand, there is no time limit on conviction records.

As requirements vary from state to state, it is vital that employers consult lawyers or do further legal research before deciding to hire or disqualify applicants based on their criminal records. Some states prevent employers from asking about arrests that did not lead to convictions, convictions that occurred many years ago, juvenile crimes, or sealed records.

Some states only allow employers to consider criminal records if the crimes committed are relevant to the job. Other states, meanwhile, allow employers to consider criminal history for jobs that require licensing such as nursing, childcare, and private investigation. For more information on state laws, check out Nolo’s helpful article.

For Federal Bureau of Investigation (FBI) checks, check out these resources:

  FBI Services for Businesses

 FBI Criminal History Checks for Employment and Licensing

 FBI Checks on Employees of Banks and Related Entities

Many state-wide employment screenings agencies also provide statewide criminal checks, national sex offender searches, most wanted criminals list searches, and SSN validation with address history trace.

Lie Detector Tests                 

The Employee Polygraph Protection Act (EPPA) prohibits most private employers from using lie detector tests for pre-employment screenings. The law, however, provides exceptions to businesses that provide armored car services, security alarm services, and security guard services. Exceptions are also provided to businesses that manufacture, distribute, or dispense pharmaceuticals.

Lie detector tests are generally unadvised without legal exceptions because these tests frequently violate federal and state laws that protect against discrimination and violations of privacy.

Medical Records and Workers’ Compensation Records

Under the Americans with Disabilities Act (ADA), employers can neither discriminate based on an applicant’s physical or mental impairment nor can they request an employee’s medical records. Also, some states have laws protecting employees’ medical records.

However, an employer may consider a workers’ compensation appeal, which can be found in the public record, during the hiring process if the applicant’s injury might potentially interfere with his ability to perform the required duties. For more information on how employers can avoid disability discrimination when hiring employees, check out Nolo’s helpful article.


Bankruptcies are a matter of public record and may appear on the applicant’s consumer report. Under the FCRA, consumer reports may not include bankruptcy records that are more than a decade old. Moreover, while federal law prohibits employers from discriminating employees who’ve filed for bankruptcy, the same protection does not apply to job applicants.

Military Service

Military service records can only be released under limited circumstances, and consent from the service member is generally required. However, the military may disclose name, rank, salary, duty assignments, duty status, and awards without the service member’s consent.

Driving Records

Employers are advised to check the driving records of employees whose jobs require a great deal of driving (e.g., courier services and transportation services). These records are sometimes available for a small fee at the state’s DMV.

Academic Records

Under the Family Educational Rights and Privacy Act (FERPA) and similar state laws, academic records—such as transcripts, recommendations, and financial information—must remain confidential and will not be released by the school without the student’s’ consent.

Tips to Remember When Performing Background Checks

While it is your legal right as an employer to do a little fact-checking before making a job offer, you also have to remember that workers have a right to privacy in certain matters. Workers can legally enforce this right by suing you if you dig a little too deeply into their personal lives.

Consider the following tips if you wish to stay out of legal trouble:

  1. Ensure that your inquiries are related to the job.

When performing pre-employment screenings, stick to the information and checks that are relevant to the position you’re hiring for. Criminal background checks may not be necessary for jobs that don’t endanger the lives of others or require a great deal of security such as retail assistants and cashiers, but they might be vital or even legally mandated for key industries such as security, finance, and pharmaceuticals.

  1. Ask for written consent before conducting checks.

You’re on safe legal turf if you ask applicants for a written consent before you perform background checks. Explain clearly in the consent form what you plan to check and how you will gather information. This gives applicants the chance to remove themselves from the candidate pool should they decide to protect their privacy. Written consent is legally sound because it prevents applicants from later claiming that you’ve invaded their privacy.

  1. Stay within reasonable limits when conducting checks.

If you want to stay out of hot water, avoid being too thorough or enthusiastic in your background checks. Avoid checking records or verifying information that isn’t directly related to the job position.

  1. Be fair and consistent in the screening process.

Ensure that the pre-employment screening process is unbiased and transparent for all applicants. Different job types may require different investigation processes, but for the same job title, it is best to keep all background checks uniform to avoid charges of discrimination.

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