Employment Background Checks: 5 Things You Can and Cannot Do

“The proper question is not, ‘Can the employer conduct a background check?” but rather, “Can an employer use the information found on the background check to deny employment to the applicant or employee?’” (From Background Checks: Employers Beware! by Janette Levey Frisch) 

When hiring new employees, it’s common for employers to want more information than an applicant provides. But it isn’t always clear what you can look for, where you can look, and what you can do with the information you find. For your reference, a reading list of recent updates regarding background checks, from lawyers and law firms on JD Supra:

1. You cannot refuse to hire someone based on a criminal charge:

“Being charged with a crime does not show anything about actual guilt and certain minority groups tend to be victims of racial profiling, which is then carried into that employer’s hiring practices illegally.” (From Employee Background Checks: A Double Edged Sword for Employers by Collins & Collins, P.C.) 

2. You can consider social media and other internet information when evaluating candidates:

“There is nothing wrong with researching people on the Internet so long as it is done properly. The Internet has a wealth of useful information, some of it intentionally posted by job applicants for employers to consider such as LinkedIn profiles.” (From Legal Issues Surrounding Social Media Background Checks by Sheppard Mullin Richter & Hampton LLP) 

3. You cannot deny employment to someone who has filed for bankruptcy:

“… federal bankruptcy laws prohibit public employers from denying employment to, or discriminating in employment against, a person “solely” because that person is or has been a bankruptcy debtor or is associated with a debtor. Private employers, on the other hand, are prohibited from discriminating in employment against a bankruptcy debtor ‘solely’ because of that status, but almost every court has found that prohibition does not extend to a private employer’s refusal to hire a bankruptcy debtor.” (From Pre-Employment Background Checks: The Cure Can Be As Bad As The Disease by Warner Norcross & Judd) 

4. In some cases, you can run credit checks on potential employees:

“The ease of obtaining information in the current electronic age has made it very simple for employers to routinely check whether an applicant has any criminal record and also to check the applicant’s credit history. While this information can certainly be put to fair and good use by prospective employers, the federal Fair Credit Reporting Act … [has] certain notice and disclosure requirements that must be followed in order to avoid any potential liability when an employer uses this information as part of the hiring process.” (From Checking Applicants’ Criminal And Credit Histories? Make Sure You Follow The Rules by Hopkins & Carley) 

5. Unless you’re in California, Connecticut, Maryland, and a handful of other states, in which case you cannot:

“On October 9, 2011, California Governor Jerry Brown signed a bill that dramatically limits the circumstances under which an employer may use consumer credit information in connection with hiring and employment decisions in California… [joining] Connecticut, Illinois, Hawaii, Maryland, Oregon, and Washington, all of which states restrict the use of credit reports for employment purposes.” (From California Restricts Use of Consumer Credit Reports for Employment Purposes by Morrison & Foerster LLP) 

“The Maryland Job Applicant Fairness Act prohibits employers from using an applicant’s or employee’s credit report or credit history in determining whether to deny employment; discharge an employee; or determine compensation, terms, conditions or privileges of employment.” (From Maryland To Restrict Credit Reports In Employment Decisions by Duane Morris LLP) 

“The Connecticut Legislature recently passed a law prohibiting employers from requiring an employee or prospective employee to consent to a request for a credit report that contains information about the employee or prospective employee’s credit score, credit account balances, payment history, savings or checking account balances or savings or checking account numbers as a condition of employment.” (From Connecticut Passes Law Narrowing Scope Of Background Checks by Siegel, O’Connor, O’Donnell & Beck, P.C.) 


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