Employers do not have unlimited rights to investigate applicants’ backgrounds and personal lives. If an individual’s privacy rights are violated, he or she can take legal action against you. The following list summarizes the types of information that employers often consult as part of a pre-employment check and the laws governing access and use for making hiring decisions.
- Credit reports. Under the Fair Credit Reporting Act (FCRA), employers must obtain an employee's written consent before seeking an employee's credit report. If you decide not to hire or promote someone based on information in the credit report, you must provide a copy of the report and let the applicant know of his or her right to challenge the report under the FCRA. Be aware that some states have more stringent rules limiting the use of credit reports.
- Criminal records. To what extent a private employer may consider an applicant's criminal history in making hiring decisions varies from state to state. Because of this variation, you should consult with a lawyer or do further legal research on the laws of your state before probing into whether or not an applicant has a criminal past.
- Lie detector tests. The Employee Polygraph Protection Act prohibits most private employers from using lie detector tests. The law includes a list of exceptions that apply to certain sensitive businesses that provide armored car services, alarm or guard services, or manufacture, distribute, or dispense pharmaceuticals.
- Medical records. Under the Americans with Disabilities Act, employers may inquire only about an applicant's ability to perform specific job duties and cannot request an employee's 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. Military service records may be released only under limited circumstances, and consent is generally required. The military may, however, disclose name, rank, salary, duty assignments, awards, and duty status without the member's consent.
- School records. Under the Family Educational Rights and Privacy Act and 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.
- Workers' compensation records. Workers' compensation appeals are a matter of public record. Information from a workers' compensation appeal may be used in a hiring decision if the employer can show that the applicant's injury might interfere with his ability perform required duties.
Source: U.S. Small Business Administration; http://www.SBA.gov.