At-a-Glance Compliance Overview

State Mini-FCRA Laws

Texas does not maintain a consumer reporting statute comparable to the “mini-FCRA” laws adopted in states such as California, Massachusetts, or Colorado.

Employment background checks obtained from consumer reporting agencies are governed primarily by the Fair Credit Reporting Act (15 U.S.C. §1681 et seq.).

Employers using third-party background screening providers must comply with federal requirements, including:

• providing a clear written disclosure before obtaining a consumer report
• obtaining written authorization from the applicant or employee
• providing pre-adverse action and adverse action notices when information in a consumer report influences an employment decision.

Criminal Record Reporting Rules

Texas law includes a reporting limitation under:

Tex. Bus. & Com. Code §20.05

This statute purports to limit the reporting of certain criminal history information to a seven-year period, with an exception for positions paying more than $75,000 annually.

However, the reporting of criminal history information in consumer reports is governed by Section 605 of the Fair Credit Reporting Act (15 U.S.C. §1681c), which permits the indefinite reporting of criminal convictions.

Under 15 U.S.C. §1681t(b)(1)(E), state laws addressing the reporting of information in consumer reports are preempted where they regulate subject matter covered by FCRA §605. Because §20.05 regulates the reporting of criminal convictions–an area expressly governed by federal law–FCRA controls the reporting framework.

Practical Rule

Employers should ensure their screening practices align with FCRA reporting standards.

Record Sealing / Expungement

Texas provides mechanisms for both expunction and order of nondisclosure.

Relevant statutes include:

Tex. Code Crim. Proc. Art. 55.01 – Expunction
Tex. Gov’t Code §411.071 et seq. – Nondisclosure

Eligible individuals may:

• seek expunction for certain non-convictions
• obtain nondisclosure for certain offenses following deferred adjudication.

Expunged records are removed from public access, while nondisclosure limits disclosure to certain entities.

Fair Chance / Ban-the-Box Law

Texas has not adopted a statewide ban-the-box law affecting private employers.

Private employers may inquire about criminal history during the hiring process, including on initial job applications.

Texas law does not require employers to delay criminal history inquiries or conduct individualized assessments as a matter of statute.

Credit Check Rules

Texas does not restrict employer use of credit reports for employment purposes.

Employers may obtain credit reports if they comply with the Fair Credit Reporting Act, including:

• disclosure
• authorization
• pre-adverse action notice
• adverse action procedures.

Cannabis & Drug Testing Rules

Texas does not provide employment protections for marijuana use.

Medical marijuana is permitted only in limited circumstances under the Texas Compassionate Use Program, but the law does not require employers to accommodate marijuana use.

Employers may:

• maintain drug-free workplace policies
• require pre-employment drug testing
• discipline employees for positive marijuana test results.

Pay Equity & Salary History Rules

Texas does not maintain a statewide salary history ban or pay transparency law affecting private employers.

Employers must still comply with federal anti-discrimination laws governing compensation.

Local Fair Chance or Screening Ordinances

Texas has enacted legislation that preempts local regulation of private employer hiring practices, including fair chance hiring ordinances.

As a result:

• previously enacted local ordinances (such as those in Austin and DeSoto) are not applicable to private employers
• private employers are governed by state and federal law only

Key Statutes

• Consumer Reporting Limitation – Tex. Bus. & Com. Code §20.05
• Expunction – Tex. Code Crim. Proc. Art. 55.01
• Order of Nondisclosure – Tex. Gov’t Code §411.071 et seq.
• FCRA Preemption – 15 U.S.C. §1681t(b)(1)(E)

Employer Compliance Checklist

Employers conducting background checks in Texas should implement several compliance practices.

• Follow federal Fair Credit Reporting Act disclosure, authorization, and adverse action requirements when ordering background checks.

• Apply FCRA reporting standards for criminal history, including indefinite reporting of convictions.

• Ensure expunged or sealed records are not considered in employment decisions where applicable.

• Apply criminal history screening policies consistently to reduce discrimination risks.

• Maintain clear workplace drug testing policies addressing controlled substance use and workplace impairment.