Employee Background Screening: Part II, A closer look at requirements and methods

Background checks are widely used in hiring and promotion decisions. Job applicants and existing employees and volunteers may be asked to submit background checks. For certain positions, screening may actually be required by state or federal law. This article develops on background screening practices and regulations introduced in a previous article.

Sources of Information

Employers may consult a wide variety of information sources as part of a pre-employment check, including:

  • Credit reports – Under the Fair Credit Reporting Act, businesses are required to obtain an employee’s written consent before seeking an employee’s credit report.
  • Criminal records – State law determines the extent to which a private employer may consider an applicant’s criminal history in making employment decisions. Federal law also gives the Federal Bureau of Investigation (FBI) the authority to conduct a criminal history record check for non-criminal justice purposes. The FBI can exchange criminal history record information with officials of state and local governments for employment, licensing, which includes volunteers, and other similar non-criminal justice purposes.
  • Lie detector tests – The Employee Polygraph Protection Act (EPPA) prohibits most employers from using lie detector tests, for pre-employment screening or during the course of employment. However, the EPPA includes a list of exceptions that apply to businesses that provide armored car services, alarm or guard services, or those that manufacture, distribute, or dispense pharmaceuticals. Although there is no federal law prohibiting use of a written honesty test on job applicants, these tests frequently violate federal and state laws that protect against discrimination and privacy violations.
  • Medical records – Under the Americans with Disabilities Act (ADA), employers cannot discriminate based on a physical or mental impairment or request an employee’s medical records. However, businesses are permitted to inquire about an applicant’s ability to perform specific job duties. Some states also have stricter laws protecting the confidentiality of medical records.
  • Bankruptcies – Bankruptcies are a matter of public record and may appear on an individual’s credit report. The federal Bankruptcy Act prohibits employers from discriminating against applicants because they have filed for bankruptcy.
  • Military service – These records may be released only under limited circumstances, and consent is normally required. The military is permitted to disclose name, rank, salary, duty assignments, awards and duty status without the service member’s consent.
  • School records – Under the Family Educational Rights and Privacy Act (FERPA) and other similar state laws, educational records such as transcripts, recommendations and financial information are confidential and will not be released by the school without a student’s consent.
  • Worker’s compensation records – Worker’s compensation appeals are a matter of public record. Information from appeals may be used in a hiring decision, if the employer can show the applicant’s injury might interfere with his/her ability to perform required duties.
  • Psychological and personality testing – Such tests may assess individuals’ general aptitude, intelligence and personality.

Blind Spots

Under the Fair Credit Reporting Act (FCRA), background checking agencies are required to maintain procedures to ensure the accuracy of the information they report about the consumer. The FCRA regulates what can and cannot be included on reports, however there are two major loopholes. The first is if the employer does not use a third-party screening company, but opts to conduct the background check itself, it is not subject to the notice and consent provisions of the FCRA.

Secondly, the employer might tell the rejected applicant that the adverse decision was not based on the contents of the background investigation, but that the job pool was so exceptional that it made its hiring decision based on the fact that there were individuals more qualified than the applicant.

In both situations, the applicant would not have the ability to obtain a copy of the background check to find out what negative information it contained.


Job applicants and existing employees and volunteers may be asked to submit background checks for a wide variety of reasons. This article introduces the various methods and sources of information for background checks and pre-employment screening. While the Fair Credit Reporting Act (FCRA) regulates the type of information that may be included on background reports, there are two major loopholes that are commonly used in the screening process.

CIPP Exam Preparation

In preparation for the Certified Information Privacy Professional/United States (CIPP/US) exam,  a privacy professional should be comfortable with topics related to this post, including:

  • Employee background screening (IV.B.a.)
  • Screening requirements under FCRA (IV.B.a.i.)
  • Screening methods (IV.B.a.ii.1. – IV.B.a.ii.4.)

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