July 27, 2023

Pre-Employment Background Checks: Considerations for Employers When Screening Prospective Employees

6 min

Employers commonly conduct background checks on prospective employees in various areas that they may think relevant when deciding whether to hire an individual for a job. Yet, federal, state, and local laws are increasingly regulating and limiting pre-employment background checks to protect prospective employees from perceived unfair or illegal treatment. Given this trend, we thought it worthwhile to go over some considerations for employers when screening prospective applicants as well some practical tips for mitigating legal risk.

What Is a Pre-Employment Background Check?

Pre-employment background checks are intended to screen prospective employees during the hiring process to verify certain information about their backgrounds and evaluate their fitness for the job. Pre-employment background checks come in a variety of forms, which can vary by state, city, industry, and employer. For example, schools and other industries where employees work closely with children as well as certain government positions often require more rigorous background checks.

Some of the more common types of pre-employment background checks include:

  • Education, Professional Licenses, and Certifications: Did the candidate attend the school and receive the degree that they provided on their application? Do they have the certifications and/or licenses that they claim to have? If so, are they up to date?
  • Prior Employment: Did the employee work for the companies that they included on their resume? What were their job titles? How long were they employed?
  • Personal References: What is the candidate's work ethic like? How do others perceive this person? Do others agree with the candidate's stated skills?
  • Criminal History: Does the applicant have a criminal history? Do they only have an arrest record or were they convicted? When did the criminal conduct occur and how old was the applicant? How serious was crime? How, if at all, does the information on their criminal record relate to the position that they applied for and/or risks to the employer's workplace?

While these examples are a useful guide to understand the purpose of certain types of background checks, as we discuss further below, some states and/or cities may impose more or less restrictions than others on permissible inquiries and uses of background history.

What Are the Benefits of Conducting Pre-Employment Background Checks?

Pre-employment background checks provide companies with some insight into their prospective hires and allow them to make an informed decision to the benefit of the business. For example, employers can use pre-employment background checks to verify the information provided by applicants, such as their education and past employment, and to evaluate whether the applicant was truthful during the interview process and qualified for the position. Pre-employment background checks also allow employers to learn whether the applicant has a criminal history and evaluate whether there is anything in their past that may relate to the applied-for position and/or the employer's business that may prevent their employment.

What Are the Restrictions on Pre-Employment Background Checks?

At the federal level, pre-employment background checks are primarily governed by Title VII of the Civil Rights Act of 1964 and the Fair Credit Reporting Act (FCRA). Title VII prohibits discrimination based on race, color, national origin, sex, religion, disability, genetic information (including family medical history), and age. Criminal history is not a Title VII protected characteristic. However, an employer may violate Title VII when their reliance on a candidate's criminal history to deny employment is part of a discrimination claim based on a protected characteristic either because the applicant was treated differently than a similarly situated applicant or because a neutral policy has the effect of disproportionately screening out a protected group. One example provided by the Equal Employment Opportunity Commission states: the employer rejected an African American applicant based on his criminal record but hired a similarly situated White applicant with a comparable criminal record.

The FCRA restricts what information a credit reporting agency can retrieve and disseminate and what information employers can use in hiring decisions. For example, credit reporting agencies cannot release information that is seven or more years old about collections, liens, bankruptcies, judgments, or arrests that did not end in convictions. Under the FCRA, employers must give written notice of their intent to run a background check, obtain written consent before conducting the background check, provide the candidate with a copy of the background check results, and give them an opportunity to dispute any inaccuracies before making a final hiring decision.

While federal laws set a starting point for regulating pre-employment background checks, most of the restrictions on employers and the protections offered to applicants during this aspect of the hiring process come from state and local laws. Employment verification, education verification, reference checks, and other types of non-criminal background checks are generally subject to very little regulation. Instead, they are typically governed by an employer's policies and procedures, which should be applied consistently to all candidates to avoid potential discrimination claims.

Criminal history background checks on the other hand are heavily regulated in most states and cities. A common restriction is a complete ban on statements in job postings indicating that those with a criminal history should not apply and on questions on job applications asking whether the applicant has a criminal history, also known as "ban the box" laws. Some states and cities only prohibit employers from inquiring about criminal history prior to an interview, such as Maryland. Others, such as New York City and California, go further and prohibit inquiries about criminal history until after a conditional offer of employment is made. Another common restriction is the use of criminal history in making an employment decision. In New York, for example, an employer cannot withdraw a conditional offer based on the results of a background check absent a direct relationship between the criminal history and the position for which the person applied or if their employment would create an unreasonable risk to the property, safety, and welfare of certain individuals or to the general public. Some states, including New York, also require employers to provide rejected employees (or those whose offer was rescinded) based on criminal history with a written copy of the results, a written explanation of the employer's basis for its decision, and time to respond.

Key Takeaways for Employers

Background checks on prospective employees are an essential part of the hiring process and can help employers find the best candidate for the position and limit exposure to legal claims, such as negligent hiring. Just as important is lawfully conducting these background checks. Employers should take the opportunity to review and evaluate their pre-employment background check procedures and policies for compliance with any restrictions on conducting background checks and/or use of information obtained. To the extent that an employer is subject to laws prohibiting statements and inquiries during the application and interview process, employers should similarly review job postings, job applications, and interview materials. It is also worth noting that some laws currently only apply to public employers. However, there is a growing trend among states and cities of expanding these laws to apply to private employers. As such, it is beneficial to both public and private employers to review the laws governing pre-employment background checks.

Employers should also consult experienced employment counsel regarding the specific laws applicable to the jurisdictions in which they operate. Employers with questions about pre-employment background checks should feel free to contact the authors of this article or any other member of Venable's Labor and Employment Group.