Preparing for Background Screening Legislative Updates

Vice President, Solutions, Marketing and Partnerships

Changes in background screening legislation are occurring at state and local levels across the U.S. This complex patchwork of regulations creates a complicated landscape for enterprise organizations operating across multiple states and municipalities. Local legislative changes can develop rapidly, so employers must be alert to remain compliant.

“A number of legislatures are looking at additional requirements and restrictions with respect to various components of a background check,” says Kevin Coy, Partner at Arnall Golden Gregory LLP. “States and localities are continuing to put restrictions in place around the use of criminal history information during the employment process.”

Here are some of the background check legislative updates on the horizon and how you can prepare to implement them at your organization.

Monitor Trends in Screening Legislation

There are several changes on the horizon at the state and local municipality levels. New York City, for instance, recently expanded its Fair Chance Act. Among other changes, employers could previously avoid the onerous Fair Chance process when criminal charges were disclosed that hadn’t yet resulted in a conviction or a dismissal. “You can't do that anymore under the new changes in New York City,” says Jasmin Farhangian, Partner at Greenwald Doherty LLP. Effective April 1, 2021, one of many expansions to Philadelphia’s ban-the-box law is the inclusion of independent contractors and other gig workers. Maryland and Colorado recently passed new ban-the-box laws, and Illinois recently expanded its law, requiring employers to provide written notice when making a decision based on someone’s criminal history, among other changes. 

Read up on court cases, too, to see trends in background screening case law that could impact your screening program. “There have been some noteworthy decisions out of the Ninth Circuit dealing with the disclosure and authorization forms,” says Professional Background Screening Association (PBSA) Executive Director Melissa Sorenson. “The court in Gilberg v. California Check Cashing Stores LLC and Walker v. Fred Meyer Inc. provided some practical takeaways for disclosure forms that all employers should review.” Sorenson also recommends that employers keep an eye on Ramirez v. TransUnion LLC, which is currently before the Supreme Court, and could set a precedent for class-action lawsuits.

Legislation is awaiting review in the House, but federal legislation often moves more slowly than state and local bills. Check with your background screening partner or professional associations for updates to legislation that could impact you. For example, view the complete list of bills the PBSA is tracking here. Sign up for newsletters outlining legislative updates through these organizations.

Balance Standardized Policies With Local Requirements

Companies operating across state or even municipal lines could be subject to a patchwork of different laws governing screening processes. This can complicate policies and procedures. Your company must decide whether to develop standardized background screening policies across the organization or adopt location-specific rules. Employers have two primary options. One option is to manage processes at a state-by-state level and seek to do the maximum screening they are allowed to do in each locality.

“Another approach is to think about what the needs of the organization are and design towards a highest common denominator,” Coy says. If some states prohibit questions regarding a previous salary, for instance, you could opt to apply that standard across locations. But certain localities could have specific requirements that may not lend themselves to a national rule. There are also advantages to developing uniform procedures, especially for large organizations. You should determine whether a uniform or a location-specific approach is more effective for your organization.

Maintain Dynamic Screening Policies

The background screening legislative landscape is constantly changing. Partner with outside help from your background screening partner and legal counsel to maintain compliant policies and practices. “It's important to use a reputable background check agency to assist you, and to consult with counsel to make sure that your procedures, both in writing and in practice, are compliant,” Farhangian says.

And remember: Don’t just update your background screening policies in relation to hiring. Ensure that the language and practice of your policies cover background screening requirements for existing employees, too. The language in your notice signed by a candidate to authorize a pre-employment screening, for instance, may not extend to an annual background check. Work with legal counsel to draft and implement policies that are effective and compliant.

State and local changes to background legislation can move quickly. Keep potential changes on your radar, and know the resources available to stay updated. Remaining compliant requires maintaining awareness.