Do Your Contract Background Checks Meet ALL Applicable Laws?

When it comes to running contract background checks, most recruiters probably think about the Fair Credit Reporting Act (FCRA), or maybe the Equal Employment Opportunity Commission (EEOC), which provides guidelines for proper background check procedures.

However, recruiters also need to be aware of the growing number of state and local laws regulating criminal background checks.  Even if you outsource background checks to a third party, such as a background screening service or contract staffing back-office, you will want to be sure they are following the applicable laws and that ALL contract background checks are being conducted properly.

State and local laws impose a varying amount of restrictions on contract background checks.  Here are some of the most common:

  • Ban the Box laws—These laws are probably the most well-known.  They prohibit companies from asking candidates about their criminal histories on employment applications.  Some of these laws only apply to public employers.  Others include private businesses, as well.  These laws also differ when it comes to when it is okay to inquire about a candidate’s criminal background.  Remember, it’s usually considered a best practice to hold off asking about a candidate’s background until a contingent job is offered, regardless of the law.
  • Arrest records—Many areas ban the use of arrest records to make employment decisions.  This is because someone can be arrested and charged, but ultimately not be found guilty.
  • Length of time—State and local laws may enforce limits beyond those of the FCRA for how far back into a person’s records you can look.  The FCRA’s limit is seven (7) years for non-conviction records.  Some areas restrict how far back you can look for conviction records, as well.  Some of these laws do, however, waive the restriction if the salary will exceed a certain amount or if the person will be working in specific positions.  In California, credit reporting agencies can’t disclose records that are seven (7) years old or older unless the candidate will be underwriting life insurance involving $250,000 or more.  Colorado’s seven-year restriction on records can be lifted if the person will be making $75,000 or more per year.
  • Taking adverse action—You may be required to take certain other factors besides a conviction into consideration before taking adverse action in certain states and localities.  Some of those factors include the relationship of the conviction to the specific position, how long it is has been since the candidate was convicted or released, and whether or not they have been formally rehabilitated.

This is not an exhaustive list.  The take-away here is that, when running background checks on contractors, it is important to be aware of ALL of the applicable laws and make sure they are followed.

Also, please note that the severity of a restriction can vary from state to state, too.  A Ban the Box law in one state may be very different from one in another state in regards to when it’s okay to ask about criminal background, for example.  It can be very difficult to navigate all of these laws if you do business in multiple states.

You can use a background check screening service to make it easier, but be sure that they keep up with the ever-changing laws.  Keep in mind that these restrictions could cause delays in getting your background check results, as well.  It is important to be transparent with clients about how long it could take, especially if they require that contractors clear a background check before they can start.

Finally, always make sure that the FCRA and the EEOC’s guidelines are followed.  One slip-up could turn a process that is intended to protect your firm into a harmful practice.

(Editor’s note: This general summary of law 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 intended for informational purposes only and should NOT be construed as legal advice.)

Previous Back to Blog Next