Employers often conduct background checks to obtain information on job applicants. The background checks can include several types of information, but laws do place some restrictions on what data can be collected and used in decisions.
An employer needs to obtain an applicant’s written consent to check a credit report and to hire an outside agency to conduct a background check. Written consent may also be required to obtain school transcripts and records of military service. Employers can gather some information on their own, but they usually request authorization before conducting any type of background check to avoid allegations of privacy violations and to allow candidates to opt out if there is information they do not want disclosed.
An applicant can refuse to consent to a background check. However, if an employer has a legal right to obtain the information requested, the company can refuse to consider an individual as a candidate for the job.
Federal law allows an employer to obtain a copy of an applicant’s credit report with consent. An employer has to tell an applicant if he or she was not hired because of information in the credit report. Some states have passed laws limiting how employers can use information in credit reports.
An employer can find out if an applicant declared bankruptcy from a credit report or a search of public records. An employer can decide not to hire someone who has filed for bankruptcy in the past but cannot fire a current employee for filing for bankruptcy.
Educational records, including recommendations, financial information, and transcripts, are generally confidential. Most schools will not release information without a student’s consent, except to verify when a degree was awarded.
Most states allow an employer to require a candidate to take a drug test prior to employment. An applicant can refuse but can be denied the job.
Federal law prohibits arrests older than seven years from being included in a consumer report, unless the position has a salary over $75,000 per year. There is no limit on how long conviction records can be included in a consumer report. An employer must notify an applicant if the decision not to offer employment was based on information in a consumer report.
Many states have laws about how information on criminal history can be used in employment decisions. Some states do not allow employers to ask about arrests that did not lead to convictions. Some states only allow employers to ask about convictions that occurred in a specific time frame or that are relevant to the job. Many states prohibit employers from asking about records that were sealed or expunged. Some states only allow employers to consider criminal history for sensitive positions.
Military service records can only be released under limited circumstances and with a service member’s consent. The military can disclose a person’s name, rank, salary, duty assignment, awards, and duty status without the individual’s consent.
Some employers interview people who know an applicant personally to obtain additional information about the person’s character, activities, and past drug use. This is legal in some cases, such as when a security clearance is needed, but it can violate an applicant’s privacy rights if the background check is too intrusive to be reasonable for the position for which the individual is applying.
An applicant who believes an employer has violated his or her privacy rights can take the case to court. The court will consider the applicant’s reasonable expectations of privacy and the employer’s reasons for seeking information and will decide whether the employer crossed a line.