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Fact Sheet 16: Employment Background Checks
Copyright 1994 - 2002. Utility Consumers' Action Network /
Privacy Rights Clearinghouse.
Released Dec. 1994. / Revised August 2000.
This copyrighted document may be copied and distributed for nonprofit,
educational purposes only. The text of this document may not be altered without
express authorization of the Privacy Rights Clearinghouse. This fact sheet
should be used as an information source and not as legal advice. PRC fact sheets
contain information about federal laws as well as some California-specific
information. Laws in other states may vary. But in general, our fact sheets are
applicable to consumers nationwide. This publication was originally developed
under the auspices of the University of San Diego.
Privacy Rights Clearinghouse
3100 - 5th Ave., Suite B
San Diego, CA 92103
Voice: (619) 298-3396
Fax: (619) 298-5681
E-mail: prc@privacyrights.org
http://www.privacyrights.org
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.
Which companies conduct background checks?
There are many companies that specialize in conducting pre-employment
background checks. The following is a partial list of companies that perform a
variety of services for employment background checking: Avert, Equifax
Employment Services, CDB Infotek, Information America, Trans Union, IRSC. To
find other companies that conduct background checks, look in the Yellow Pages
under "Investigators."
With the information age upon us, it is easier for employers to gather
background information themselves. Much of it is computerized, allowing
employers to "log on" to public records and commercial databases
directly through dial-up networks or via the Internet.
Here are just a few such Web-based services:
Employers may also create a "clearinghouse" of information about
potential employees. A group of employers establish a data exchange program to
screen applicants. The database is comprised of information submitted by the
member companies about their employees. When a jobseeker submits an application
to a member company, that employer will check with the clearinghouse for
information on the applicant. Examples of such companies are Employers Mutual
Association (retail industry), DAC (truck drivers), and Employers Information
Services (oil-rig workers).
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 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. 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.
- 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.
For more information
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