What Employers in 2023 Need to Know About Background Check Compliance and Regulation

Fairness in hiring and an economy that works for everyone are two topics almost always present in legislative sessions nationwide. That remains true even at the federal level. For employers, this often means a complex environment for background check compliance, and regulations can change very suddenly. It's essential to stay up to date on the latest changes to know when you may need to change your policies or update your process. Failing to do so could mean hefty fines, regulatory action, or even lawsuits.

Changes Keep Occurring at Every Level

Complicating efforts to keep up with background check regulation is that changes continue to occur everywhere — not just at the local city level but also at the county and state levels. In recent years, even the federal government has made key changes based on the trends observed in more local governments. Let’s review the updates in these areas that you need to know, beginning with the federal government.

Changes in Federal Background Check Legislation

With the widespread adoption of ban-the-box laws in varying forms across the nation, it was only a matter of time before the federal government would take notice. In 2020, a federal Fair Chance Act was passed as part of a larger bill and signed into law. Officially titled the Fair Chance to Compete for Jobs Act of 2019, this law does not establish a national "ban the box" rule. Instead, it creates one for certain kinds of federal employment.

The federal government itself now "bans the box" and has established a similar requirement for businesses that contract with the government to provide services. Such employers may not ask job applicants criminal history-related questions before an initial, conditional job offer. Employers and agencies alike cannot circumvent this requirement by using non-official channels to search for information on candidates.

The law makes some exceptions, such as for jobs related to national security or otherwise mandates a security clearance. This law has been in effect since late 2021. Business owners who may supply work for the federal government should review their procedures to ensure they comply with these rules.

Changes to State and Local Laws to Know

Outside of the federal government's purview, states have wide latitude to enact their own laws related to employment practices. Changes in recent years have included alterations to laws pertaining to drug testing, the rolling out of new fair chance laws in places that did not have them before, and more. Let's look at each of the major changes you should know.

Important Alterations to State Marijuana Laws

With legal and medical access to marijuana continuing to grow rapidly, many states and employers alike have had to contend with the impact of this change on drug testing policy. Several states and cities have made notable changes in the last few years that could impact your business if you operate in or otherwise do business in these areas.

  1. Connecticut

As of July 1, 2022, employers in Connecticut now face new restrictions on who they can deny employment to on the basis of drug use. If a candidate has used marijuana off-duty or before the application process, employers cannot act against them. This includes both job applicants and existing employees. Only at-work drug use is actionable, and you must have a written policy defining the circumstances around such use that would trigger dismissal. 

This law does not cover manufacturing, driving jobs, or jobs involving care for children or the infirm and public safety-related roles.

  1. Virginia

In Virginia, a similar law has been created that has been in effect since July 2021. Under this law, legal users of medical marijuana products such as cannabis oil have new protections in the state. Employees cannot use these products at work or be impaired on the job, but if they provide a doctor's certification, they cannot be fired for off-duty use. Likewise, applicants with a doctor's note can't have adverse action taken against them for medical cannabis use.

  1. Pennsylvania

Pennsylvania state courts issued a ruling in 2021 that changed the predominant interpretation of the state's medical marijuana law. Like the other states we've mentioned, the PA courts ruled that state law makes it illegal for employers to make decisions about hiring or firing individuals based solely on their usage of marijuana. Lawful medical marijuana users enjoy a shield against adverse action and may even sue companies that violate their rights.

  1. Philadelphia

In Pennsylvania, Philadelphia has also taken steps to level the playing field for cannabis users. As of January 2022, employers under the city's jurisdiction cannot test candidates for marijuana usage. You may still make conditional offers contingent on background checks and drug tests, but you cannot screen for marijuana.

Updates to State-Level Clean Slate, Fair Chance, or “Ban the Box” Regulation

Marijuana-related laws aren't the only things changing state legislatures. A few more states have recently decided to adopt or expand fair chance laws. Remember, violating these laws can bring unwanted scrutiny to your business and the potential for legal action.

  1. Colorado

In 2019, Colorado passed its version of Fair Chance legislation, dubbed the "Chance to Compete" Act. After a graduated rollout over several years, all private employers in the state are now covered by this law as of September 2021. The law lays out several features common to "ban the box" laws.

You cannot advertise that you won't consider those with criminal records in job listings or job applications. You may also not ask about criminal records on the application. However, unlike many ban-the-box laws, there is no requirement to do an interview or make a conditional job offer before an employer chooses to conduct a background check.

  1. Maine

Maine's "ban the box" law came into force in October of 2021, which applies to all private employers. As in Colorado, you may not make statements discouraging those with records from applying, nor may you ask about someone's record on a job application. Exceptions exist when laws otherwise require the exclusion of individuals with certain types of records.

  1. Louisiana

Louisiana has also implemented a box-banning law in force since August 2021. The law requires an individualized assessment of all criminal records; in other words, you cannot deny someone based on a specific conviction without first considering the circumstances and factors surrounding the crime. You may no longer ask for or consider arrests unrelated to an eventual conviction. Similar to the rules already established by the FCRA, Louisiana businesses must provide copies of the background report in response to a candidate's written request.

Updates to Local-Level Ban the Box Regulation

In states whose hiring laws don't go far enough in the eyes of some fair chance advocates, changes can occur at the local level. This is most often the case for large metropolitan areas with job markets that involve millions of employable adults. Here's a quick look at the most recent local changes.

  1. Philadelphia

Alongside modifying its drug testing laws, Philadelphia has also looked to expand its already-existing ban-the-box law to more workers. As of April 2021, independent contractors and gig workers now enjoy the same protections as other workers. These workers no longer have to answer criminal history questions on job applications, and you cannot use background checks without first making a job offer.

  1. New York City

New York City is already home to one of the country's most restrictive and complex ban-the-box laws. Following amendments that became active in July 2021, employers face even more requirements. For example, non-criminal history screening must take place prior to making any conditional job offers. That can mean license verification, educational history and employment verification, and more. Criminal background checks must wait until you've completed this process and made a conditional job offer.

Redaction of Birth Dates from Criminal Records

Birthdate records are important in matching criminal records to a specific individual. In some cases, it may be one of the only reliable ways to make a certain match. Unfortunately, some states have begun to look at redacting this information from records to make their use less desirable to employers. Here's what to know.

  1. California

In 2021, a California court decision sent shockwaves throughout the state as judges ruled that existing law prohibited the inclusion of certain identifying information in public records. Birthdates were one such type of information. Since then, California county clerks have had standing orders to remove birthdates and other information from criminal records. The process has increased the importance of working with a proven vetting provider in California as the court has made background checks significantly more complicated.

  1. Michigan

A similar rule would have gone into effect in January of 2022 based on a ruling by the Michigan Supreme Court. However, employers who ask applicants for consent to match their birth date to criminal records may continue to do so. Employers should note that this is a separate form of consent than that required by the FCRA. Do not include this consent form as a part of the "standalone disclosure" the FCRA stipulates, or you could be in violation of federal law.

Changes to Volunteer Background Checks in California

Many organizations, especially non-profits, rely on volunteers to pad out their workforce and provide more opportunities to deliver services. However, volunteers aren't always subject to the same level of scrutiny as other employees. After high-profile concerns about volunteers, California chose to take action with additional legislation targeting this type of worker.

As of January 2022, any youth-related organization must now comply with a mandatory background check law. This includes not only the volunteers that work with youth in such organizations but also any regular employees and even the administrative staff. Prior convictions for child abuse or neglect are now automatically disqualifying.

Banning Salary History Considerations in Nevada

Some employers see salary as an important consideration in the hiring process. They may want to know whether they can entice an applicant with a higher offer, or they may want to judge whether the candidate is overvalued compared to their skillset. However, an increasing number of states have deemed this practice to be potentially discriminatory. Nevada has become the most recent state to place restrictions on salary history. You may not ask for this information or use it in your considerations, even if an applicant offers it.

The Rising Presence of AI in Hiring

Almost overnight, the presence of AI-like tools took hold in many industries. The hiring sector is no stranger to hype about the next major tool to simplify the job and streamline hiring the best employees. However, many people have misgivings about this technology. Concerns about inherent biases, unexplainable choices, and potential discrimination lead to serious scrutiny of AI tools.

Already, the EEOC has begun working with the Department of Justice to determine how AI tools might relate to the enforcement of the Americans with Disabilities Act. The Federal Trade Commission is also engaged heavily in studying the issue, and the Department of Commerce may be formulating formal regulations to propose.

Some states and cities are already moving ahead of the federal government's pace. As of 2023, New York City's law makes using any AI hiring tool illegal without a city-approved audit for any inherent biases. California, Colorado, Vermont, Washington, and Illinois have all also initiated efforts to study AI and, perhaps, to ultimately produce legislation on the subject.

While employers may be eager to embrace new technologies to improve the quality of every hire, AI is an area where businesses should navigate with care. Monitor these changes and stay current on legislation that may be coming in your area of operation.


In a hiring landscape that continues to shift in many ways from year to year, background check compliance isn’t always easy. However, vigilance and attention to detail can ensure that your business remains in the law's good graces without compromising on hiring quality. Whether it’s changes in cannabis law or expanding “ban the box” rules, smart hiring starts with a strong attitude towards good governance. 

At backgroundchecks.com, we provide employers with a robust set of tools for vetting employees and support our partners in understanding background check compliance and regulation. Explore our extensive Learning Center filled with more information or speak with us today to learn how we can support your hiring processes.

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Michael Klazema

About Michael Klazema The author

Michael Klazema is the lead author and editor for Dallas-based backgroundchecks.com with a focus on human resource and employment screening developments

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