Employee Background Check

An employee background check is a report an employer uses to screen applicants or current workers. It can include criminal records, credit history, driving records, past employment, education, and drug tests. When an employer hires an outside screening company to prepare the report, it is a "consumer report" and the Fair Credit Reporting Act applies.

The FCRA sets specific steps. Under 15 U.S.C. 1681b(b)(2), an employer must give a clear and conspicuous written disclosure, in a document that consists solely of the disclosure, and get the person's written authorization before getting a background report for employment purposes. Before taking an adverse action, such as withdrawing an offer, based on the report, the employer must give the person a copy of the report and a summary of their rights, so they can point out errors. The FTC explains these steps in its guidance for employers.

These rules generate many class actions. Common claims are that an employer buried the disclosure in a long application with other terms, skipped the pre-adverse action notice, or that the screening company reported old, sealed, or someone else's records. Willful FCRA violations allow statutory damages of $100 to $1,000 per person without proof of actual loss, which makes class treatment practical. Some states and cities add their own "ban the box" and fair chance hiring rules.

If you were turned down for a job because of a background check, ask for a copy of the report and check it for mistakes. Our background check errors page and FCRA guide explain your rights.