Employment Background Checks: A Jobseeker's Guide
Why does an employer conduct background checks?
Whether you are hired or promoted for a job may depend on the information gathered by the employer in a background check. Employers use them to verify the accuracy of information provided by jobseekers. Background reports may also uncover information left out of the application or interview.
Today, more employers are being sued for "negligent hiring" for not checking carefully enough into the background of a potential employee. If an employee's action hurts someone, the employer may be liable. That is one reason more background checks are being conducted.
The "information age" also accounts for the increase in background checks--the availability of computer databases containing millions of records of personal data. As the cost of searching these sources drops, employers are finding it more feasible to conduct background checks.
I don't have anything to hide. Why should I worry?
While some people are not concerned about background investigations, others are uncomfortable with the idea of an investigator poking around in their personal history. In-depth background checks could unearth information that is irrelevant, taken out of context or just plain wrong. A further concern is that the report might include information that is illegal to use for hiring purposes or which comes from questionable sources.
What types of information might be included in a background check?
Background reports can range from a verification of an applicant's Social Security number to a detailed account of the potential employee's history and acquaintances. Here are some of the pieces of information that might be included in a background check. Note that many of these sources are public records created by government agencies.
- Driving records
- Vehicle registration
- Credit records
- Criminal records
- Social Security no.
- Education records
- Court records
- Workers' compensation
- Bankruptcy
- Character references
- Neighbor interviews
- Medical records
- Property ownership
- Employment verification
- Military service records
- State licensing records
What types of information can't the employer consider?
Federal and state laws limit the types of information employers can use in hiring decisions.
Arrest information. Although arrest record information is public record, in California employers cannot seek out the arrest record of a potential employee. However, if the arrest resulted in a conviction, or if the applicant is out of jail but pending trial, that information can be used. (California Labor Code § 432.7)
Criminal history. In California, criminal histories or "rap sheets" compiled by law enforcement agencies are not public record. Only certain employers such as public utilities, law enforcement, security guard firms, and child care facilities have access to this information. With the advent of computerized court records and arrest information, however, there are private companies that compile virtual "rap sheets." (California Penal Code §§ 11105, 13300)
Workers' compensation. When an employee's claim goes through the state system or the Workers' Compensation Appeals Board, the case becomes public record. Only if an injury might interfere with one's ability to perform required duties may an employer use this information. Under the federal Americans with Disabilities Act, employers cannot use medical information or the fact an applicant filed a workers' compensation claim to discriminate against applicants. (42 USC §12101)
Bankruptcies. Bankruptcies are public record. However, employers cannot discriminate against applicants because they have filed for bankruptcy. (11 USC §525)
Aren't some of my personal records confidential?
The following types of information may be useful for an employer to make a hiring decision. However, the employer is required to get your permission before obtaining the records. (See PRC Fact Sheet No. 11, "From Cradle to Grave: Government Records and Your Privacy.")
Education records. Under both federal and California law, transcripts, recommendations, discipline records and financial information are confidential. A school should not release student records without the authorization of the student or parent. However, a school may release "directory information," which can include name, address, dates of attendance, degrees earned, and activities, unless the student has given written notice otherwise. (California Education Code §§ 67100, 76200; 20 USC §1232g)
Military service records. Under the federal Privacy Act, service records are confidential and can only be released under limited circumstances. Inquiries must be made under the Freedom of Information Act. Even without the applicant's consent, the military may release name, rank, salary, duty assignments, awards and duty status. (5 USC §§ 552, 552a)
Medical records. In California, medical records are confidential. There are only a few instances when a medical record can be released without your knowledge or authorization. If employers require physical examinations after they make a job offer, they have access to the results. The Americans with Disabilities Act www.pacdbtac.org allows a potential employer to inquire only about your ability to perform specific job functions. (California Civil Code § 56.10; 42 USC §12101)
There are other types of questions such as age, marital status and certain psychological tests that employers cannot use when interviewing. These issues are beyond the scope of this fact sheet. If you have further questions, contact the resources at the end of this fact sheet.
What can my former employer say about me?
Often a potential employer will contact an applicant's past employers. A former boss can say anything [truthful] about your performance. However, most employers have a policy to only confirm dates of employment, final salary, and other limited information. California law prohibits employers from intentionally interfering with former employees' attempts to find jobs by giving out false or misleading references. (California Labor Code § 1050)
Documents in your personnel file are not confidential and can be revealed by an employer. Only medical information in a personnel file is confidential. If you are a state or federal employee, however, your personnel file is protected under the California Information Practices Act or the federal Privacy Act of 1974 and can only be disclosed under limited circumstances. Under California law, employees have a right to review their own personnel files, and make copies of documents they have signed. (California Civil Code § 56.20; California Labor Code §§ 432, 1198.5; California Government Code § 1798; 5 USC §552a)
Does the applicant have a right to be told when a background check is requested?
Yes. Amendments to the Fair Credit Reporting Act ( FCRA, 15 USC §1681), in effect September 30, 1997, increase the disclosure and consent requirements of employers who use "consumer reports." Such reports might consist only of a credit check. More extensive reports might include criminal histories, driving records and interviews with neighbors, friends and associates.
To be covered by the FCRA, the Federal Trade Commission says that a report must be prepared by a "consumer reporting agency," a business that "for monetary fees ... regularly engages in ... assembling ... information on consumers for the purpose of furnishing consumer reports to third parties." (FCRA Section 603f)
Before the employer obtains a consumer report on a job applicant or existing employee, it must notify the individual in writing. The employer must also obtain the applicant's written authorization before the background check is conducted. If the employer uses information from the consumer report for an "adverse action" that is, denying the job applicant, terminating the employee or denying a promotion it must take the following steps, which are explained further in the Federal Trade Commission's web site www.ftc.gov/bcp/conline/pubs/buspubs/credempl.htm
Before the adverse action is taken, the employer must give the applicant a "pre-adverse action disclosure" that includes a copy of the report and an explanation of the law. After the adverse action is taken, the individual must be given an "adverse action notice." This document must contain the name, address and phone number of the background check company; a statement that this company did not make the adverse decision, rather that the employer did; and a notice that the individual has the right to dispute the accuracy or completeness of any of the information in the report. The employer must follow these same procedures when ordering a copy of your credit report. A credit report can tell an employer a lot about you. It may contain public records information such as court cases, judgments, bankruptcies and liens; also, outstanding credit accounts and loans, and the payment history for each account. Credit report entries can remain in the report for up to ten years. (See PRC fact sheet no. 6, "How Private Is My Credit Report?") In California, when a credit report is requested for employment purposes, the credit bureau must block all references to age, marital status, race, religion and medical information. Although federal and state laws allow credit bureaus to include criminal record information, it is an industry policy not to do so. (California Civil Code §§ 1785.18, 1785.20.5)
What can the job applicant do to prepare?
Order a copy of your credit report. If there is something you do not recognize or that you disagree with, dispute the information with the creditor or credit bureau before you have to explain it to the interviewer. (See PRC Fact Sheet No. 6, "How Private is My Credit Report?")
Check public records files. If you have an arrest record or have been involved in court cases, go to the county where this took place and inspect the files. Make sure the information is correct and up to date. Request a copy of your driving record from the Department of Motor Vehicles, especially if you are applying for a job that may involve driving.
Alternatively...
Do your own background check. If you want to see what an employer's background check might uncover, hire a company that specializes in such reports to conduct one for you. That way, you can discover if the data bases of the information vendors contain erroneous or misleading information. (Consult the Yellow Pages under "Investigators.")
Ask to see a copy of your personnel file from your old job. Even if you do not work there anymore, you have a right to see your file until at least a year from the last date of employment. You are allowed to make copies of documents in your file that have your signature on them. (California Labor Code § 432.) You may also want to ask if your former employer has a policy about the release of personnel records. Many companies limit the amount of information they disclose.
Read the fine print carefully. When you sign a job application, you will be asked to sign a consent form if a background check is conducted. Read this statement carefully and ask questions if the authorization statement is not clear. Unfortunately, jobseekers are in an awkward position, since refusing to authorize a background check may jeopardize the chances of getting the job.
Tell neighbors and work colleagues, past and present, that they might be asked to provide information about you. This helps avoid suspicion and alerts you to possible problems.