Background checks are utilized by companies today to decide whether or not you
will be permitted to work for them. Information in these reports can reveal
many things about you to a prospective employer; it is critical that you be
aware of what a company may uncover via a background check before one is
conducted. You need to be aware of what steps you must take to protect
yourself should negative information about you be uncovered.
Background checks [or reports] can range from a corroborating an applicant's
Social Security number to a detailed description of the prospective employee's
history and friends. There are several bits of information that might be
included in a background check. Please note that many of these sources are
created by governmental agencies and are, in fact, public records:
Bankruptcy; Character References; Court Records; Credit Records;
Criminal Records; Driving Records; Drug Test Records;
Incarceration Records; Medical Records;
Military Records; Neighbor Interviews;
Personal References; Property Ownership; Sex Offender Lists;
Social Security No.; State Licensing Records;
Vehicle Registration; Workers'
The federal Fair
Credit Reporting Act (FCRA) sets national standards for
employment screening. This law, however, only applies to background checks
performed by an outside company, called a "consumer reporting agency" under
the FCRA. The law does not apply in situations where the employer conducts
background checks internally.1
Depending on in which state you reside you may have stronger laws than what
the federal government mandates. One example can be found in California with
Consumer Reporting Agencies Act (Civil Code Sections 1786
- 1786.6) and the California
Consumer Credit Reporting Agency Act (Civil Code
§1785). Your state may have similar fair employment guidelines and labor codes
in place that can put a limit on the content of an employment background
check. Google a search for "consumer reporting agencies" and "your state's
name" to find out this information.
Under the FCRA, a background check report is called a "consumer report." This
is the same "official" name given to your credit report, and the same limits
on disclosure apply. The FCRA says the following cannot be reported:2
* Cases under title 11 [United States Code] or under the Bankruptcy Act that,
from the date of entry of the order for relief or the date of adjudication, as
the case may be, antedate the report by more than 10 years.
* Civil suits, civil judgments, and records of arrest that from date of entry,
antedate the report by more than seven years or until the governing statute of
limitations has expired, whichever is the longer period.
* Paid tax liens which, from date of payment, antedate the report by more than
* Accounts placed for collection or charged to profit and loss which antedate
the report by more than seven years.
* Any other adverse item of information, other than records of convictions of
crimes which antedates the report by more than seven years.
You have every right to know before a background check is being performed that
one will be done. Under the FCRA, the employer must obtain the applicant's
written authorization before the background check is conducted. The
authorization must be on a document separate from all other documents such as
an employment application.
The company may not perform its own credit report, rather the report must be
prepared by an outside company [such as those listed on the right side of this
page]. The term "consumer reporting agency" means any person which, for
monetary fees, dues, or on a cooperative nonprofit basis, regularly engages in
whole or in part in the practice of assembling or evaluating consumer credit
information or other information on consumers for the purpose of furnishing
consumer reports to third parties, and which uses any means or facility of
interstate commerce for the purpose of preparing or furnishing consumer
reports. (FCRA §603f)3
If you believe that the information obtained by the company was incorrect you
need to inform your potential employer immediately. Request copies of all
documentation and make sure that any incorrect information is expunged from
your account. Will any of this effect whether you are hired or not? I cannot
give you a clear yes/no answer. Much depends on the content of the report, how
it is interpreted, and whether or not the information contained therein can be
construed as damaging to you.
1 Privacy Rights
2 Federal Trade
Commission, FCRA Paragraph 607
3 Federal Trade
Commission, FCRA Paragraph 603