Employment Background Checks

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:

• Bankruptcies after 10 years.
• Civil suits, civil judgments, and records of arrest, from date of entry, after seven years.
• Paid tax liens after seven years.
• Accounts placed for collection after seven years.
• Any other negative information (except criminal convictions) after seven years.

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In most states including California, when an employee's claim goes through the state system or the Workers' Compensation Appeals Board (WCAB), the case becomes public record. An employer may only use this information if an injury might interfere with one's ability to perform required duties.

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Bankruptcies. Bankruptcies are public record. However, employers cannot discriminate against applicants because they have filed for bankruptcy. (11 USC §525)

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First, if the employer does not use a third-party screening company but, rather conducts the background check itself, it is not subject to the notice and consent provisions of the FCRA.

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"employee misconduct investigations."

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job applicants and employees who have undergone an employment background screening covered by the FCRA may receive a free annual file disclosure from the company that performed the background check.

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My job doesn't require handling money. Why does the employer do a credit check?

Often employers use your credit history to gauge your level of responsibility. Whether a valid assumption or not, some employers believe if you are not reliable in paying your bills, then you will not be a reliable employee. Unfortunately, a bad credit report can work against you in your search for employment. For more on how a credit record can affect your job search, see the FTC's fact sheet on this topic, www.ftc.gov/bcp/conline/pubs/alerts/ngcrdtalrt.htm

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Yes. Under the FCRA, a background check that includes interviews with "neighbors, friends, or associates" about your "character, general reputation, personal characteristics, or mode of living" is called an "investigative consumer report." (The term "investigative consumer report" has a different meaning under California Law. See www.leginfo.ca.gov, Civil Code §1786.)

When information about you is gathered from interviews, the FCRA requires a separate disclosure. You are also entitled to know the "nature and scope" of an investigative consumer report, but you have to ask. For more on how the FTC staff interprets the term "investigative consumer report" and other keys topics under the FCRA, visit the FTC web site www.ftc.gov/os/statutes/fcra/index.htm

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And, you should not be asked to sign any document that waives your right to sue a screening company or the employer for violations of the law.

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