An employment background check is a process where an employer verifies information provided by a job candidate and reviews their personal history using third-party services. The results inform the hiring decision, ensuring the applicant is suitable for the position. The timing of when an employer can initiate this screening is complex, depending heavily on a combination of federal, state, and local regulations. While federal law establishes the procedural groundwork, various jurisdictional rules often dictate exactly when the process can begin during the hiring cycle.
Federal Requirements for Background Checks
The Fair Credit Reporting Act (FCRA) is the foundational federal law that regulates how employers use consumer reporting agencies (CRAs) to conduct background screenings. This law applies whenever an employer uses a third party to collect information about a job candidate’s character, general reputation, or mode of living for employment purposes. The FCRA mandates two distinct actions from the employer that must occur before any background check is initiated.
The employer must first provide the applicant with a clear and conspicuous written disclosure that a consumer report, or background check, may be obtained for employment purposes. This disclosure has a strict “stand-alone” requirement, meaning it must be in a document that consists solely of the disclosure itself, without any extraneous information like liability waivers or job application details. The purpose of this rule is to ensure the applicant’s attention is focused on the fact that a report will be requested.
In addition to the disclosure, the employer must obtain written authorization from the applicant to consent to the background check. This signed authorization form gives the company permission to order and receive the consumer report from the screening provider. Both the clear disclosure and the written consent must be secured before the employer can legally request the report from the third-party agency.
State and Local Laws Governing Timing
While federal law requires disclosure and consent before the check begins, it does not explicitly prohibit a check prior to a formal job offer. However, numerous state and local laws introduce strict timing restrictions, often requiring a conditional offer to be extended first. These are largely driven by “Ban the Box” laws, which aim to prevent the automatic disqualification of applicants based on past criminal history. These laws restrict when employers can inquire about or check an applicant’s criminal record.
For instance, laws in jurisdictions like California, Illinois, and New York City prevent employers from conducting criminal history checks until after a conditional offer of employment has been made. The intent is to ensure that a candidate’s qualifications for the job are assessed first, before their criminal history becomes a factor in the decision-making process. These local rules often supersede the federal FCRA on the matter of timing, meaning employers must comply with the strictest law that applies to their location.
The scope of these timing restrictions can also vary beyond criminal records, with some state or local ordinances limiting when credit checks can be performed. Employers must navigate this patchwork of regulations, making the conditional job offer a necessary procedural step to ensure compliance with the most restrictive law in their operating area. Failing to follow the specific timing requirements can expose the employer to significant legal penalties and lawsuits.
Utilizing the Conditional Job Offer
The conditional job offer is the primary mechanism employers use to comply with the various local and state timing restrictions while still conducting necessary due diligence. This is a formal offer of employment that is explicitly contingent upon the candidate successfully meeting one or more specific requirements. The most common conditions tied to such an offer are the satisfactory completion of a background check, a drug test, or the verification of professional licenses.
By issuing the offer first, the employer satisfies the legal requirement in many jurisdictions that background screening for certain information, particularly criminal history, cannot occur earlier in the process. The offer establishes the employer’s intent to hire the individual, contingent only on the final verification steps. If the candidate fails to meet the specified conditions, the employer can then legally withdraw the offer.
The conditional offer allows the company to secure a candidate quickly while reserving the right to conduct necessary verifications before the start date. This procedural step legally validates the timing of the subsequent background check, placing it at the stage required by state and local ordinances.
What Information Employers Typically Verify
The scope of an employment background check is determined by the employer based on the role, industry, and legal requirements. A standard screening often begins with identity verification, ensuring the applicant is who they claim to be, often through a Social Security number trace. The information gathered is intended to provide a comprehensive view of the applicant’s suitability for the specific job.
Employers typically verify several areas:
- Identity verification, often through a Social Security number trace, which is necessary to accurately search public records.
- Past employment history, confirming dates of employment and job titles provided by the applicant.
- Education verification, checking with academic institutions to confirm degrees, certifications, or licenses.
- Motor vehicle records, especially for positions involving driving a company vehicle or operating machinery.
- Criminal history, though its scope is heavily regulated by law, often limited by a seven-year lookback period for non-conviction records.
- Credit history checks, generally only for roles involving significant financial responsibility or access to sensitive funds.
Required Steps After a Negative Finding
If a background check reveals information that leads an employer to consider not hiring a candidate, the FCRA mandates a strict two-step process known as Adverse Action. This process must be followed precisely to ensure the applicant has an opportunity to review and dispute the information before a final decision is made. The first step is the Pre-Adverse Action notice.
The employer must send the applicant a written notice that includes a copy of the background check report and a summary of the applicant’s rights under the FCRA. This pre-adverse notice signals the employer’s intent to potentially take a negative action based on the report’s contents. The employer must then allow a reasonable amount of time, generally considered at least five business days, for the applicant to review the report and contact the CRA to dispute any inaccuracies.
If the employer still decides to move forward with the negative decision after the waiting period, they must then issue a Final Adverse Action notice. This final letter confirms the adverse decision, such as withdrawing the conditional job offer. The notice must again include contact information for the CRA that furnished the report, and inform the applicant of their right to obtain another free copy of the report and to dispute its accuracy.