What Employers Need to Know About Background Checks

By Michael Klazema on 3/11/2014

The publication offers guidance from both agencies to employers when considering the background of applicants and employees in making employment-related decisions. The EEOC enforces federal laws against employment discrimination based on a person’s race, color, religion, sex (including pregnancy), national origin, age (40 or older), disability, or genetic information. The FTC enforces the Fair Credit Reporting Act (FCRA), the law that protects the privacy and accuracy of the information in credit reports.

This update highlights the three main areas that these agencies discussed in the publication.

Before You Get Background Information

The EEOC offers the following guidance to employer before getting background information on an applicant or employee:

  • Treat everyone the same. It is important that if you conduct background checks on applicants and employees, that you conduct the checks on all applicants and employees the same.
  • Except in rare circumstances, do not try to get an individual’s genetic information, which includes family medical history.

The FTC requires the employer to follow these specific procedures before background information is obtained on an individual for employment purposes.:

  • Tell the applicant or employee that you might use the information when making a decision about his or her employment;
  • If you are asking for an “investigative report”, that is a report based on personal interviews about a person’s character, general reputation, personal characteristics, and lifestyle, you must tell the applicant or employee of his or her right to a description of the nature and scope of the investigation;
  • Get the individual’s written permission to conduct the background check; and
  • Certify to or another company from which you are getting the report that you complied with the FCRA requirements and that you will not discriminate against the applicant or employee, or misuse the information in violation of federal or state equal employment laws or regulations.

Using Background Information

When using background information, the EEOC states you should

  • Apply the same standards to everyone;
  • Take special care when making employment decisions based on background problems that may be more common among people of certain protected characteristics. The EEOC stresses that background information should only be used if it is job related and consistent with business necessity; and
  • Be flexible when considering background information. Employers should be prepared to make exceptions for problems caused by a disability and revealed during a background check.

The FTC requirements related to the use of background information are two-fold, that is before and after taking adverse action. Before taking adverse action, the employer must:

  • Give the applicant or employee a notice that includes a copy of the consumer report you relied on to make your decision; and
  • Give the individual a copy of “A Summary of Your Rights Under the Fair Credit Reporting Act”, received from or another company that sold you the report. This allows the person an opportunity to review the report and explain any negative history.

After taking adverse action, the employer must tell the applicant or employee (orally, in writing, or electronically) the following:

  • That he or she was rejected because of the information in the report;
  • The name, address, and phone number of the company that sold the report;
  • That the company selling the report did not make the hiring decision, and cannot give specific reasons for it; and
  • That he or she has a right to dispute the accuracy or completeness of the report, and to get an additional free report from the reporting company within 60 days.

Disposing of Background Information
With regard to records, the EEOC wants employers to keep all personnel or employment records made for one year or after a personnel action is taken, whichever comes later. This requirement is extended to two years for education institutions, state and local governments, and federal contractors that have at least 150 employees and a government contract of at least $150,000.

The FCRA requires that disposal of the reports and all information gathered from them be disposed of in a secure manner. Records should be burned, pulverized, or shredded, and electronic information destroyed so that it cannot be read or reconstructed. offers compliance products and services to clients. Our General Counsel, Chris Lemens, hosts a webinar entitled, “A Final Consensus on Criminal Background Checks and Equal Employment Opportunity” that offers in-depth instructional knowledge about compliance in this area. The next webinar is scheduled for May 13th. Go here to register:

The joint publication also offers access to sites identified by the EEOC and the FTC of related topics that may be helpful to employers. The publication can be viewed here:

Tag Cloud
Recent Posts

Latest News

  • July 17 — Hourly Employee Screening: What Makes It Unique and Important infographic?Modern employers conduct background checks on most of the people they hire. These checks are most often used to screen full-time salaried workers. Part-timers and hourly employees are typically less likely to face a thorough background check or even go through a background screening at all. According to a survey conducted by, 67 percent of employers screen all of their part-time employees, compared to 83 percent of their full-time employees.
  • July 17 A Kentucky school district recently decided to stop paying for volunteer background checks. Going forward, volunteers will be expected to cover the cost of their own checks, which is $10 per person.
  • July 12 Seeking fresh employees for businesses, some states seek to reduce the number of people denied employment based on old or nonviolent crimes.
  • July 11 Multinational aerospace company - Safran Group - trusts to screen new hires, The products they manufacture can have major implications for aircraft safety and worldwide security. As such, the company needs to be extremely careful and deliberate about who it trusts to join the organization.
  • July 11 Recently cited for driving too fast? Here’s what a speeding ticket will do to your background check report.
  • July 10

    Could your business be vulnerable to employee theft? Protect yourself with more thorough background checks.

  • July 09 While Social Security Numbers aren’t required for criminal history checks, they can be beneficial. Here’s why.
  • July 05

    In June, Chicago Public Schools came under fire after a Chicago Tribune piece accused the district of not protecting students from sexual abusers. The district has announced plans to run background checks on all employees.

  • July 04 — How important are volunteer background checks? Do they even matter?
    Organizations that rely in part on volunteer labor consistently find themselves asking these questions. The assumption is usually that volunteer background checks are less important than background checks for full-time or part-time employees. According to a CareerBuilder survey from 2016, 72 percent of employers conduct background checks on all employees. A parallel statistic isn’t even available for volunteer checks. They are less common – and less valued.
  • July 03 #MeToo harassment allegations continue to reshape workplaces in every industry. As a result, many companies are looking to safeguard themselves from liability.