WiseBizz - Your online resource for success in both home and office business matters...

Your Number 1 Stop For Business Resources

Idea - Execution - Results

Employment background check: your legal rights

Employment background check: your legal rights

What are the laws surrounding employment background checks?

The Fair Credit Reporting Act (FCRA) classifies an 'employment background check' as a consumer report and sets down the criteria for employment screening. According to the Act an employer must notify you of their intent and get written consent for a background check into your work or life history. You can refuse permission but this can prevent you from being shortlisted for the job.

The report can then be used to evaluate you for hiring, promotion, reassignment or retention as an employee. The information received as part of the employment background check cannot be used in violation of federal or state laws or regulations on equal opportunities. This means that an employer cannot discriminate against you solely because of a disability. And although information on a bankruptcy or bad debts may be revealed this cannot be used against you.


If an employer decides not to offer you a job as a consequence of the information revealed during the background check they must give you a ‘pre adverse action disclosure’ that includes a copy of the consumer report, a summary of your rights under the Fair Credit Reporting Act and information on how to dispute the report. This is followed by an ‘adverse action notice’ that must explain why you have not been hired and must include the name and address of the consumer reporting agency that carried out the pre-employment background check. Employers must keep the information contained in the report confidential and cannot store any of the information on your employment file.

What a previous employer can say about you and your history as part of the screening process

If you leave a job in unfavourable circumstances your ex-employer can disclose this as part of an employment background check. Laws differ from state to state but you may have signed an authorization on revealing employment-information as part of your contract or have agreed to abide by the company policy manual which may also contain a section on authorization for background checks.

Some states have also passed laws that give employers immunity from defamation lawsuits if they reveal information about previous employees during a background check. This allows employers to speak frankly about job performance and reasons for termination without fear of a lawsuit. However, many states also allow you to sue if your ex-employer states false or misleading information about you that prevents you from getting a job.

If you feel an employer has violated the Fair Credit Reporting Act you can file a complaint with the Federal Trade Commission on 1-877-FTC-HELP.