Epps & Coulson Logo


Background checks are an essential part of the hiring process and can help employers make better hiring decisions by uncovering valuable information about a candidate’s work experience, however employers need to be mindful of the rules surrounding them.  Background checks are governed by The Fair Credit Reporting Act (“FCRA”) which means to ensure accuracy, fairness and privacy for the information contained in consumer reporting agency and other confidential files.  The FCRA is the national standard for employment background checks and permits background checks if the employer obtains written authorization from the person subject to the background check and furnishes an appropriate written pre-disclosure.  It also allows the applicant to file a dispute if the background check contains inaccurate or incomplete information.

Employers are required to follow the FCRA guidelines, which even apply when hiring a third-party vendor to do the background check.  The employer must do the following or be subject to a lawsuit for violation of the FCRA:

  •      •Provide the applicant with written notice that a background check and report may be required.
  •      •Obtain the applicant’s written permission to conduct a background check (usually via an authorization form).
  •      •Obtain even more specific permission if the job requires the collection of medical information.
  •      •Provide notice if the employer intends to use the applicant’s “character, general reputation, personal characteristics, or mode of living in the employment decision. The FCRA calls this an “investigative consumer report.”
  •      •Notify the applicant if the information contained in a background check is used to make an adverse hiring decision.


If an employer compiles a background check report on its own, FCRA provisions do not apply, however, employers should ensure their background checks remain compliant with all applicable federal, state, and local laws.  In a 2018 California Supreme Court ruling known as Connor v. First Student, Inc., the employer was subject to both the investigative Consumer Reporting Agencies Act (“ICRAA”) and the Consumer Credit Reporting Agencies Act (“CCRAA”) limitations, which now apply to certain employer background checks.  Because of this, employers may need to ensure that they comply with both laws, in addition to ensuring their background checks remain compliant with all other applicable federal and state laws.

The penalties for violating background check laws are severe.  In some cases, employers can be required to pay actual damages or up to $10,000 per violation, in addition to the applicant’s attorney fees and costs, which is why complying with laws like the FCRA are critical.

As more states and localities adopt more stringent laws and are limiting the information that can be obtained by employers during the pre-employment screening process, employers are facing challenges with all of the compliance rigmarole.  Multiple jurisdictional employers and the advent of work from home or remote working make it wise to consider whether to have multiple policies or a universal policy based on the strictest laws, even if the employer does not have a physical location in one of the more stringent jurisdictions.

Here at Epps & Coulson, LLP, we work to remain up to date with the changes to the laws as they occur.  To learn more about pre-employment background checks in your state, and how we can help you, please contact dawn at: dcoulson@eppscoulson.com

Information contained in this Memo is intended for informational and educational purposes only and does not constitute legal advice or opinion, nor is it a substitute for the professional judgment of an attorney.  It is likely considered advertising.  Epps & Coulson, LLP encourages you to call to discuss these matters as they apply to you or your business.

Attorneys admitted to practice in California, New York, Colorado, Texas, and Oregon