The Law Office of Diana Macias Valdez - Employment Background Checks

Employment Background Checks

Employment Law News Flash…

The Equal Employment Opportunity Commission (EEOC) and Federal Trade Commission (FTC) recently joined forces to co-publish two technical assistance articles for employers and employees related to employment background checks.  This is the first time the agencies have partnered to provide compliance assistance regarding the respective laws enforced by both agencies related to back ground screening, including the federal anti-discrimination laws enforced by the EEOC and the Fair Credit Reporting Act (FCRA) enforced by the FTC. The publications can be found at: and

The agencies aim to educate employers and employees on the requirements mandated by the Fair Credit Reporting Act (FCRA) when employers rely on background checks in making employment decisions, as well as emphasize the importance of complying with federal anti-discrimination laws to ensure that screening practices do not discriminate on the basis of race, color, national origin, sex, religion, age (40 or older), disability, or genetic information, including family medical history, regardless of how or where the information was obtained.  The agencies reiterate the importance of allowing applicants or employees an opportunity to review and respond to information contained in a background reports prior to taking an adverse action due to the prevalence of inaccuracies contained in certain reports and issues that could be caused by identity theft.

The EEOC offers the following guidance to employers when relying on background checks:

  • Apply the same standards to everyone, regardless of their race, national origin, color, sex, religion, disability, genetic information (including family medical history), or age (40 or older). For example, if employers don't reject applicants of one ethnicity with certain financial histories or criminal records, employers can't reject applicants of other ethnicities because they have the same or similar financial histories or criminal records.
  • Take special care when basing employment decisions on background problems that may be more common among people of a certain race, color, national origin, sex, or religion; among people who have a disability; or among people age 40 or older.  In legal terms, the policy or practice has a "disparate impact" and is not "job related and consistent with business necessity."
  • Be prepared to make exceptions for problems revealed during a background check that were caused by a disability. For example, if an employer is inclined not to hire a person because of a problem caused by a disability, an employer should allow the person to demonstrate his or her ability to do the job - despite the negative background information - unless doing so would cause significant financial or operational difficulty.

The FTC advises of the following FCRA statutory requirements when employers take adverse action (i.e. not hiring or terminating an employee) based on background information:

  • Before employers take an adverse employment action, they must provide the following to the applicant or employee:
    • a notice that includes a copy of the consumer report relied upon in making the decision; and
    • a copy of "A Summary of Your Rights Under the Fair Credit Reporting Act."
  • After an adverse action is taken, employers must advise the applicant or employee (orally, in writing, or electronically):
    • that he or she was rejected because of information contained in a background report;
    • the name, address, and phone number of the company that sold the report;
    • that the company selling the report didn't make the hiring decision, and can't give specific reasons for it; and
    • that he or she has a right to dispute the accuracy or completeness of the report, and to get an additional free report from the reporting company within 60 calendar days.

The publications also provide helpful guidance on record keeping requirements, as well as additional resources related to background checks provided by both agencies.

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