What Is Covered in a Background Check? Legal vs. Illegal Reporting Items 16 Nov 2017


Definition of a Background Check: it is a review of an individual’s educational, criminal, financial, and workplace records. Usually, the company’s human resources department conducts a background check. It is very important because it verifies the information provided on a job application or on a resume.

For instance, if you hire an employee screening company to run a background check on a candidate, they are required to follow specific Fair Credit Reporting Act (FCRA) guidelines. Under the FCRA, a background check report is called a “consumer report” and the company you use is called a “consumer reporting agency.”

There are many rules that these agencies must follow. If you decide to work with a reputable organization, you can be sure that your background checks won’t have any legal mismatches. For instance, if you decide to run a background check in-house, FCRA guidelines do not apply. However, it’s important to proceed with caution to ensure you don’t violate any fair hiring or anti-discrimination laws.

The FCRA regulates consumer reporting agencies to help protect candidates’ rights. In case a candidate is vying for a job where they’ll make less than $75,000, reporting certain items isn’t necessary.

Illegal Background Check Information for Salaries <$75K

  • Bankruptcies after 10 years.
  • Tax liens seven years after payment.
  • Accounts in collection after seven years.
  • Civil suits after seven years.
  • Civil judgments after seven years.

Illegal Criminal History Information for Salaries <$75K

Illegal Criminal History Information on a Background Check

The FCRA does not have limits for criminal convictions on employee screening reports. Hence, that means you’ll be able to see convictions for as far back as they go. However, the exception is if you’re located in a state that has specific limitations to criminal conviction reporting. Some states, such as California and Texas, follow a seven-year rule where criminal convictions should not be reported after that time has passed. Therefore, reporting after seven years would be illegal.

What about arrests that didn’t necessarily end in a conviction? Sometimes an employer may show interest in a broader look at a candidate’s criminal history. But, because arrests are public record, they may decide to explore this information in-house. It’s important to proceed with great caution if you decide to do this on your own. Keep in mind this statement from the U.S. Equal Employment Opportunity Commission:

“The fact that an individual was arrested is not proof that he engaged in criminal conduct. Therefore, an individual’s arrest record standing alone may not be used by an employer to take a negative employment action (e.g., not hiring, firing or suspending an applicant or employee). However, an arrest may trigger an inquiry into whether the conduct underlying the arrest justifies such action.”

Getting Permission to Run a Background Check

Background Check


Before you hire an employee screening agency to run any type of background check, the FCRA requires you to get permission from the candidate first.

· Notify the applicant in writing that you will be running a background check.

· Alert the applicant that the information found on the background check may influence your hiring decision.

· Obtain the applicant’s written consent to move forward with the background check.

If, after you review a fair and legal background report, you find some red flags that cause you to change your mind about hiring an employee, you also must follow important FCRA guidelines. Read “How to Lawfully Reject a Candidate After a Negative Employment Criminal Background Check” for more information.