Background Checks and What You Can Lawfully Ask

Why this matters

Shops rarely get in trouble for what they checked. They get in trouble for what they did with the answer. A report comes back with something on it, the owner quietly moves to the next candidate, and in that one silent step they have skipped a federal procedure that exists for a specific reason: consumer reports carry a real rate of mismatched identity and stale dispositions, and the applicant is the only person who can spot that their report is somebody else's. The procedure is short and mechanical, and the claims that follow skipping it are procedural, which means the applicant does not have to prove the decision was wrong to win.

This is orientation on how the sequence runs, not legal advice about your hiring. One point below is marked where your own state and your own counsel take over, because the content rules are almost entirely state and local.

The FCRA sequence, which is the part that gets skipped

The Fair Credit Reporting Act (15 U.S.C. 1681 et seq.) applies whenever you use a third party, a consumer reporting agency, to obtain a report for employment purposes. It does not apply to your own internet search of a candidate, which is governed by other rules and carries its own problems. The moment you pay a screening company, this sequence is mandatory.

1. Standalone written disclosure. Before you order the report, a clear and conspicuous written disclosure that a consumer report may be obtained, in a document consisting solely of that disclosure (15 U.S.C. 1681b(b)(2)). Federal appellate decisions have held that burying a liability release in that document defeats the requirement, and that extraneous material does too, so the paragraph waiving claims against the shop belongs on a different page of the application packet.
2. Written authorization from the applicant.
3. Pre-adverse action notice, before you decide. If the report is any part of why you are declining, you first give the applicant a copy of the report and the written summary of rights prescribed for this purpose (15 U.S.C. 1681b(b)(3)).
4. A genuine interval in which they can respond and dispute.
5. Final adverse action notice after the decision, naming the consumer reporting agency with its address and phone number, stating that the agency did not make the decision and cannot give reasons for it, and telling the applicant of the right to dispute the report's accuracy and to a free copy within 60 days (15 U.S.C. 1681m(a)).

If you order a report that involves interviews about character and general reputation, an investigative consumer report, additional disclosure obligations attach under 15 U.S.C. 1681d.

Why the interval is the whole point

The statute does not name a number of days, and the Federal Trade Commission's staff guidance has long treated about five business days as generally reasonable. Employers who know both notices exist still fold them into one envelope on the same afternoon, which is the violation in its most common form, and it is a violation even where the underlying decision was correct.

The reason the gap exists is worth stating, because owners who understand it stop resenting it. Screening reports are assembled from court and agency records against a name and a date of birth, common names collide, dispositions get amended, and sealed records sometimes appear anyway. The applicant is the only person who knows their own middle name, their own record, and whether the charge was dismissed. Holding the seat for a handful of days is what keeps you from rejecting a good tech over somebody else's file.

What you may ask about, by category

This is the state and local layer and it moves. The federal procedure above is nearly uniform; almost everything below is not.

• Criminal history timing. More than thirty states and a long list of cities restrict when you may ask, and many reach private employers. California's Fair Chance Act (Gov. Code 12952) reaches private employers with five or more employees and bars any criminal inquiry until after a conditional offer. Assume the question cannot go on your application form until you have checked your own state and city.
• Arrests. An arrest is not a conviction and does not establish that conduct occurred; the EEOC's 2012 enforcement guidance treats reliance on arrest records alone as a Title VII problem, and several states bar it outright.
• Credit history. Roughly a dozen states and several cities restrict employment credit checks to positions where credit history is genuinely job-related, California (Labor Code 1024.5) and Illinois (Employee Credit Privacy Act, 820 ILCS 70) being the commonly cited examples. For a field technician it is almost never defensible, and pulling it anyway creates exposure and tells you nothing you needed.
• Salary history. More than twenty states and localities bar asking what an applicant earned previously. It gets confused with the pay-range posting rules, a separate obligation covered by the pay-transparency card in the References.
• Drug screening. Its own regime, covered by the drug-testing card in the References, and increasingly its own state law.

The conviction question, and the individualized assessment

Where a conviction does turn up, a blanket rule ("no felonies, ever, any role") is the shape most likely to fail, because it carries disparate impact exposure under Title VII with no job-relatedness behind it. The EEOC's guidance frames the analysis on three factors: the nature and gravity of the offense, the time elapsed since the offense or the completion of the sentence, and the nature of the job held or sought. Several states now require an individualized assessment on essentially those terms by statute, California and Illinois among them, and some require a written preliminary decision and a response window before the rejection is final.

The practical version is a written standard set in advance and applied the same way every time: which categories of offense are disqualifying for which roles, over what lookback. A standard written before the candidate is in front of you is the difference between an assessment and a reaction, and it is the document that answers why this applicant was declined and the last one was not.

This is the hand-off point. Whether your state requires a fair-chance assessment, in what form, and on what clock is a question for your own counsel or your state labor agency, not for an article.

The driving record, which is the one a trade shop genuinely needs

Most of this article is about restraint. The motor vehicle record is the exception: a shop putting someone in a van has an obvious interest in how they drive, and the cleanest way to handle it is not ad hoc judgment but your insurer's own driver acceptability standard, which gives you a written, externally set threshold applied identically to everyone.

Two mechanics. Pulled through a screening company, the record is a consumer report and the whole FCRA sequence above applies to it, both notices included. And where the role requires a commercial driver's license, the Federal Motor Carrier Safety Regulations impose separate inquiry obligations on the motor carrier, including a safety performance history investigation of prior employers and driving record checks covering the preceding three years, at 49 CFR 391.23.

Worked example: an applicant with a seven-year-old conviction

A residential plumbing shop has a written standard: a theft-related conviction within ten years disqualifies a candidate from any role with unsupervised access to customers' homes or to shop inventory.

Day 0. Conditional offer made. The applicant signs a standalone disclosure and a separate authorization. The old form had a liability release inside the disclosure; it was moved to the application packet after counsel read it.

Day 3. The report arrives with two entries: a felony theft conviction seven years ago, sentence completed six years ago, and a misdemeanor from two years ago.

Day 4. The individualized assessment is written down. Nature and gravity: theft from an employer, which goes directly to the job. Time: seven years since the offense, six since the sentence ended, nothing in between. Job: unsupervised entry into occupied homes and daily access to stock. The assessment comes out adverse on the nature-and-job axis and favourable on the time axis, and against the shop's own standard seven years sits inside the ten-year window, so the conviction disqualifies this role. The same day, the pre-adverse action notice goes out with a copy of the report and the summary of rights, and the seat is held.

Day 7. The applicant responds. The misdemeanor is not his: different middle name, different date of birth, a common surname. He also provides context on the felony, including completed restitution and five years of continuous employment since, with a letter from that employer.

Day 10. The screening company corrects the report and removes the misdemeanor. That correction is the entire reason this procedure exists. A shop that had merged the two notices into one email on day 4 would have declined this applicant partly on a record belonging to a different human being and would never have found out.

Day 11. The shop reconsiders on the corrected report and reaches the same conclusion on the felony, because its written standard and the job's unsupervised access point the same way. It offers a shop-based fabrication and stocking role with no unsupervised home access, a job it needed filled. The applicant declines it.

Day 12. The final adverse action notice goes out, naming the screening company with its address and phone number, stating that the company did not make the decision and cannot explain it, and setting out the right to dispute and to a free copy within 60 days.

The corrected report changed the facts and did not change the outcome on this role, because the disqualifying entry was real and the standard was written in advance. The cost of doing it properly was eight days. In a state with its own fair-chance statute the sequence runs longer still, because the state's written preliminary decision and response window stack on top of the federal ones.

The other side of the ledger

None of this is an argument for checking less. Negligent hiring is a live state-law exposure that scales with the risk the role creates, and few roles create more of it than one that hands a stranger a key and sends them into an occupied home. A shop that checked nothing on a person who then harmed a customer is answering a much harder question than the one in this article. The balance is a check that is thorough, consistent and job-related, run through the procedure above, rather than either a blanket exclusion or a shrug.

How to verify you got this right

Pull your disclosure form and confirm it contains the disclosure and nothing else, with the authorization as a separate signature. Find the pre-adverse action step in your hiring process, confirm someone owns it and that a real interval separates it from the final notice, then check whether anyone has used that interval in the last year. Read your application form for a criminal history question and check it against your state and city. Write your disqualification standard down if it currently lives in your head, and pull the last two declines to see whether it was applied the same way to both.

References

• Fair Credit Reporting Act, 15 U.S.C. 1681 et seq., in particular 1681b(b)(2) and (b)(3), 1681d and 1681m(a)
• U.S. Equal Employment Opportunity Commission, Enforcement Guidance on the Consideration of Arrest and Conviction Records in Employment Decisions Under Title VII (2012)
• 49 CFR 391.23, investigation and inquiries required of motor carriers for CDL drivers
• Your state and city fair-chance, credit-check and salary-history statutes, which are the binding layer on content
• See related: Drug Testing Programs for Service Business; Pay Transparency and the Job Post Rules Spreading by State; Badging, Background Checks and Getting Onto the Site
• See related: Interview and Hire Scripts for Tradespeople, and The Hiring Decision Checklist, for the rest of the hiring sequence this sits inside