Employment Background Checks: Your Legal Rights

Posted by on March 14, 2012 in Employee Background Checks [ 3 Comments ]

Employers have both a legal and moral obligation to conduct background checks before taking you on as an employee. The reasons why speak for themselves. According to the Small Business Administration:

  • 30% of small business failure is caused by employee theft.
  • Internal employee-related thefts occur 15 times more often than external theft.

Further, the Association of Certified Fraud Examiners found that in 2010, the typical organization loses 5% of its annual revenue to fraud.

And it’s not just theft that employers are nervous about – deception is a form of fraud as well, and it can put a company in serious jeopardy if they employ someone that isn’t credentialed or legally qualified to complete the necessary tasks. That’s especially true for some government jobs or those that have you working directly with children. The National Credit Verification Service says that 25% of the MBA degrees it verifies on resumes are false, and college registrars report that at least 60% of the verifications they receive are falsified.

Since the average act of committed fraud lasts a year and a half before it’s even detected, you can’t blame your future employer for trying to keep his or her workplace, customers, financials and reputation safe.

What can your future employer check on?

First, it’s important to know that an employer must ask your permission in writing to conduct a background check. This form must be separate from your application. The request should be detailed, as well. For instance, if they want to talk to your character references, or look into your criminal background, they must get your consent for what’s known as an investigative consumer report. Investigation into your medical records requires another specific consent form. If you sign any consent form for a background check, it’s safe to assume that the company you might potentially work for will be looking into it. If you’re not asked for consent, you shouldn’t be screened for anything listed below.

In addition to checking in with your previous employers and other work references, employers are able to inquire about the following aspects of your background:

Character references

A character reference is different from a work reference in that an employer may want to understand more about your personality outside of your work style and accomplishments. A character reference be requested if you’re working with sensitive populations (such as the elderly or disabled) or for an organization where group work is critical. It’s important that you line up character references before they’re asked of you.

Court records

Employees can review public court records to see if you have an arrest record or have been involved in any court cases. It’s important that you make sure the files are correct and up to date, particularly if you’ve been a victim of identity theft or your case has been dismissed.

Credit reports & bankruptcy

A credit check will usually occur if your potential employment involves you working in a financial, accounting, or payroll capacity. If a credit report is still requested — even though your job doesn’t require you to handle money — it may be that the employer is looking to use your credit history to gauge your level of responsibility. If the employer finds that your credit report is grounds to deny your application for employment, they must give you a copy of the report, as well as a copy of the Fair Credit Reporting Act. You can dispute inaccurate or incomplete information by contacting the company that issued the report.

Criminal & incarceration records

Each state has different requirements in terms of using your criminal history to make a hiring decision. Look into the laws of your own state online or at your state’s Department of Safety or Division of State Police.

Driving records and vehicle registration

If you’re seeking a role that involves you being on the road often (or even infrequently), or transporting products or clients, a driving record and vehicle registration check should be required as part of your background screening. Driving record checks usually include:

  • Accidents
  • Traffic Violations
  • Suspensions
  • Drug or Alcohol Related Convictions
  • License Status
  • Date of Issuance/Expiration

Military service

Military service records may be released, as long as the company has your specific consent, though the military can offer up your name, rank, assignments, awards, and duty status without you having to give explicit permission.

Social Security Number

Federal law requires employers to verify your eligibility to work in the United States, which means you’ll be required to fill out an I-9 form. This form asks that you provide your social security number, as well as other information that give more insight into your citizenship.

Workers’ Compensation Records

According to the Small Business Administration: “Workers’ compensation appeals are a matter of public record. Information from a workers’ compensation appeal may be used in a hiring decision if the employer can show the applicant’s injury might interfere with his ability perform required duties.”

Drug test records

Depending on the job you are attempting to land, your prospective employer may inquire about whether you took a drug test, refused a drug test, or tested positive for any previous drug tests.

Sex offender lists

Companies look into sex offender lists to determine if you’re an appropriate applicant for the job and the work environment, and to avoid hiring someone with a past history that may put their clients or employees at risk. This is particularly the case if you may be looking to work with vulnerable populations or within the fields of education, health care, or non-profit.

Social Media

Just last year, the U.S. Federal Trade Commission gave Social Intelligence Corp the go ahead to include Facebook profile activity in its employee background checks when screening potential hires. Not all companies may be interested in this information, but it’s worth being aware of as more and more companies seek access to your public profile information from sites like Facebook.

What is off limits?

Medical Records

Under the Americans with Disabilities Act, employers can only inquire to see if you’re able to perform specific job duties, and are not allowed access to your medical records. As long as you can do the job, an employer may not make the decision to deny you employment based on your disability.

Education Records

Under the Family Educational Rights and Privacy Act and similar state laws, transcripts, recommendations, and financial aid information are confidential and will not be disclosed to anyone other than the individual who studied at that facility or university.

Social Media

Unlike the public Facebook profile activity that employers might be interested in seeing, more and more employers are asking job applicants for their usernames and passwords to see all the “under the hood” details of their accounts. Most cases involve law-enforcement jobs, but this request raises red flags with privacy experts. It’s under your personal discretion as to whether or not you want to provide this information to a potential employer, though privacy experts believe it could put companies at legal risk.

What are legal recourses?

The FCRA requires that potential employers get your written consent before conducting an employment background check. Failure to do so means legal consequences that are enforced by the Federal Trade Commission (FTC).

If you suspect that a potential employer is pulling background information on you without getting your consent, you can do something about it. For instance, if they fail to get your approval before getting a copy of your credit report, or fail to provide the notice that they’ve opted not to hire you because of your credit history, you should report it to the FTC, who will in turn sue the employer for not cooperating with the law.

Discrimination lawsuits could also come to light if you feel an employer makes a hiring decision based on what is called a “protected category” instead of on your qualifications and cleared background checks. These categories include race, color, sex, disability, religion, pregnancy, or union activity. Some states also have protections against discrimination based on sexual orientation, marital or parental status, or political affiliation. If you feel a potential employer is discriminating against you, you should file a claim with the US Equal Employment Opportunity Commission (EEOC). The EEOC will investigate the claim and then file a lawsuit if they feel it’s appropriate.

Photo source: businessinsider.com; drivingrecord.net; womenshealthency.com


3 thoughts on “Employment Background Checks: Your Legal Rights


  1. avatarDavid

    This is a great article as it relates to pre-employment background checks and drug testing. It’s SO important that employers choose a credible screening firm. Thank you Resource Nation!


  2. avatarmichelle guy

    what is the federal law that mandates that a potential employer provide me with a copy of my background report. a company that I was going to work for is refusing to give it to me. I had an expungement on my record and I want to see what code they ran my background under and I want to see what they saw.



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