While many employers rely on pre-employment background checks or questions on applications that ask applicants to provide information about their background as a practical measure to help provide them with a fuller picture of each applicant, there are some serious legal considerations about what an employer can and can’t inquire about at each stage of the hiring process.
With some exceptions, it’s not illegal for employers to ask questions about an applicant’s background or require a background check. (Exceptions include medical and/or genetic information.) What tends to get employers into trouble is using that background information to make employment decisions.
There are two federal agencies that regulate employment background checks: the Equal Employment Opportunity Commission (EEOC) and the Federal Trade Commission (FTC). The EEOC enforces federal laws that protect applicants and employees from discrimination, and the FTC enforces the Fair Credit Reporting Act (FCRA). Employers must comply with the regulations of both agencies as they apply to conducting background checks and the use of information about an employee’s background in personnel decisions.
First things first: it’s illegal for employers to check the background of either applicants or employees when the decision to do so is passed on one of the following protected classes: race, national origin, color, sex, religion, disability, genetic information, or age (40 years or older).
The FCRA also establishes additional requirements for employers using a company “in the business of compiling background information” (commonly known as consumer reporting agencies or CRAs) to get background information from applicants or employees: