Background Checks: A Guide for Employers

June 27, 2018

Employers need to be aware of the important protocols to be followed when retaining outside vendors to conduct background checks. Anytime an employer uses an applicant’s background information to make an employment decision, the employer must comply with federal, state and local laws that protect applicants. This article will outline how these laws impact background checks and what employers need to do to comply.

Background checks, when utilized properly, can provide employers with valuable information about candidates for employment and prevent employers from making a bad hire. However, inappropriate use of background checks can potentially lead to employer liability.

Background Check Protocols

If an employer performs a background check through a third-party company in the business of compiling background information, the employer must comply with the Fair Credit Reporting Act (“FCRA”). Before the employer can collect background information on an applicant, the individual must be notified in writing that the background check will be conducted and may impact his or her eligibility for employment. The notification must be a stand-alone document and be separate from the employment application. Once the applicant is given the notice, he or she must provide written consent to the background check. Also, if in the course of performing the background check, any personal interviews are conducted regarding an applicant’s character, reputation or lifestyle, the applicant has a right – and must be told of that right – to a description of the nature and scope of the interviews.

Any background information received cannot be used to discriminate against the applicant. Therefore, the employer must apply the same standards to everyone, regardless of race, national origin, color, sex, religion, disability, genetic information (including family medical history), or age (typically 40 or older).

If an employer finds adverse information in the report, there are certain protocols they must follow to avoid legal trouble. The background report may reveal a range of infractions, such as arrests, summonses, violations, misdemeanors or felonies. If the report includes adverse information, there are specific forms that need to be distributed to the applicant and must include particular language outlining the applicant’s rights. Most importantly, before denying the applicant the position, the employer has a duty to present the findings to the applicant and give the applicant the opportunity to dispute or explain the adverse information.

State “Ban-the-Box” Laws

In addition to the federal laws regarding background checks, several states and cities have passed more stringent requirements for background checks. Many states have implemented “ban-the-box” laws, which prohibit employers from inquiring, in the initial stages of the selection process, about the applicant’s criminal conviction history. Outlined below are the relevant laws for New York State, New York City, New Jersey and Connecticut.

New York State

New York Correction Law Article 23-A, which is required to be posted in all workplaces in the State of New York, prohibits employers from unfairly discriminating against individuals with prior convictions. The only exceptions to this law are when: (1) there is a direct relationship between the criminal offense(s) and the job duties the applicant will perform; or (2) the applicant could endanger the property, safety or welfare of the individuals he or she would be working with, or the general public. Article 23-A provides several factors employers need to consider in order to make informed and fair hiring decisions about applicants with prior criminal convictions.

An applicant with a criminal record who is denied employment may request an explanation for the denial. The employer then has thirty days from the request to provide a written statement setting forth the reasons for the denial.

New York City

The Fair Chance Act (“FCA”), described in a prior newsletter, governs New York City (“NYC”) employers’ duties regarding the use of criminal record information obtained in background checks. The FCA prohibits most NYC employers with four or more employees from inquiring about applicants’ criminal conviction history before the applicants receive conditional offers of employment. However, the conditional offer can be revoked based upon the results of a criminal background check.

Although NYC employers may inquire into an applicant’s criminal history after making a conditional offer of employment, the employers must still comply with the notice obligations of Article 23-A and the FCRA. However, prior to making the conditional offer, NYC employers cannot inquire into an applicant’s criminal history in any manner, including researching public information. The FCA provides procedures that employers must follow in order to revoke a conditional offer of employment.

NYC employers must also comply with the Stop Credit Discrimination in Employment Act (“SCDEA”), which was summarized in an earlier newsletter. Under the SCDEA, employers are prohibited from asking applicants about their credit histories or from discriminating on the basis of their credit history, including requesting consent to perform a credit check.

New Jersey

The Opportunity to Compete Act (“OTCA”), explained in a previous newsletter, prohibits all New Jersey employers with 15 or more employees from inquiring about an applicant’s criminal history until after a candidate advances past an initial interview. Immediately following the initial interview an employer may then inquire about, and make an employment decision based on, the applicant’s criminal history.


Connecticut’s “ban-the-box” law, entitled, “An Act Concerning Fair Chance Employment,” (the “Act”) prohibits all Connecticut employers from inquiring about an applicant’s prior arrests, criminal charges or convictions on an initial employment application. An employer is exempt from this law if state or federal law requires criminal background checks to be conducted for the position.  Under the Act, Connecticut employers may still inquire into an applicant’s criminal histories, but these background inquiries can only occur if the candidate advances to the interview stage.

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