Employee Rights in Background Checks and Credit Reports

Background checks are almost standard procedure in the hiring process. Employers want to know they are hiring reliable people who will not threaten the safety of the workplace or their reputation.

There are legal limitations, however, that protect employees’ privacy rights and ensure fair treatment. If you have questions about a background check and its effect on your job prospects, find an employment lawyer near you to talk about your specific situation. 

Can an Employer Require a Background Check? 

Yes, employers can require background checks for potential and current employees. However, employers must get your written consent before they do a background check, request a background check from a third-party background check company, or request a credit report from the credit bureaus and consumer reporting agencies.

Employees and job candidates have the right to refuse, but refusing consent for the background check may affect your chances of getting the job. 

What Information Can Be Included in a Background Check? 

Background checks can contain a wide range of information. This includes your criminal history, criminal record, employment history, and education history. It can also contain your credit history, credit report, and your driving record if relevant to the job. A credit report contains your detailed financial history including bankruptcies, credit information, your credit score, credit accounts, past loans, current loans, and the amounts and lenders of those loans. Your driving record will contain any driving infractions.

There are limits, however. For example, some states forbid criminal background checks from including arrests, indictments, and certain convictions older than seven years. 

What Can an Employer Do With Background Screening Information? 

There are laws requiring employers and potential employers to use the information they get in a background report responsibly. For example, employers can’t discriminate based on age, race, gender, gender identity, sexual orientation, and other protected categories. The information they use to make their hiring decisions must be relevant to the job. 

Can an Employer Use a Credit Report To Make Hiring Decisions? 

Employers can use credit reports in hiring decisions in certain situations. For example, if a job’s essential functions include financial responsibilities or dealing with money, employers and potential employers can consider a job applicant’s credit report in their hiring decision. The employer can also periodically check a current employee’s credit report.

The employer or potential employer must inform you in advance they are pulling your credit report and must obtain your written consent. If the employer decides not to hire you or to terminate you based on something they discovered in your credit report, they must give you a copy of the credit report and inform you of your right to dispute the information on the credit report. 

What Are the Rights of Employees Under the Federal Fair Credit Reporting Act (FCRA)? 

A federal law called the Fair Credit Reporting Act (FCRA) provides several protections for employees and several responsibilities for employers. These include your right to right to know if information in your credit report has affected you in an employment decision.

You also have the right to dispute inaccurate information in your credit report and to obtain a free copy of your credit report if you are denied a job based on the credit report. An employment attorney can help you with the dispute process. 

What Should I Do if I Think I Have Been Unfairly Denied A Job Based on a Background Check or Credit Report? 

If you believe an employer has treated you unfairly based on an employment background check or credit report, you should take immediate action. The costs of a lost employment opportunity are huge. You should request a copy of the report, identify any inaccuracies, and file a dispute with the background check company or credit reporting agency. You should also contact an experienced employment lawyer. 

How Can I Protect My Privacy When Undergoing a Background Check? 

To protect your privacy when undergoing a background check, you should only provide information that is necessary and relevant to the job. You should ask the employer or potential employer about the scope of the background check. You should also ask them how they will protect your personal information. You have the right to withhold consent for overly intrusive background checks. 

Get the Legal Help You Need

There are several resources to help you if an employer or potential employer has unfairly denied you employment because of a background check or credit report. Government agencies like the Equal Employment Opportunity Commission (EEOC) and the Federal Trade Commission (FTC) can provide guidance and investigate complaints. Your state’s attorney general’s office may also have a consumer protection office or department.

For answers to specific concerns you should consult a local and experienced employment law attorney for legal advice. A lawyer will advocate for you and can speak to employers and the government on your behalf.