What Information Can Be Reported Legally In My Background Check?

In Part I of this series, we discussed the Fair Credit Reporting Act (“FCRA”) and its application to background checks on job seekers, and current employees alike. As mentioned in that article, the FCRA is the floor, not the ceiling. As such, certain states (like California) sought to provide their citizens with even greater protections in the employment context than the Federal government provided.       

In Part II of this series, we discussed the much more stringent requirements placed on background checks by California. In Part IV of this series, we will discuss why California felt it necessary to provide further protections to their citizens. In this part of the series, we will address what most of our readers are thinking: “ok, I know what rules an employer has to follow, but what information is allowed to be reported on a background check?”

California’s Investigative Consumer Reporting Agency Act (“ICRAA”) continues with the Fair Credit Reporting Act’s general seven (7) year limitation on reporting negative information as it relates to employment decisions[1]. You will recall however, that the FCRA contains an exception allowing criminal convictions to be reported indefinitely. The ICRAA departs from this exception to the rule and prohibits criminal convictions from being reported after the seven (7) year mark, unless there is another California statute that requires an employer to investigate an employee’s criminal background[2].

As a general rule of thumb, background checks frequently republish information from public records. California law requires the Investigative Consumer Reporting Agency (“ICRA”) to verify the information they have obtained from public records during the thirty (30) day period prior to the issuance of the report, prior to reporting that information.

There are a few other notable departures from the FCRA requirements in California: (1) All information relating to arrests, and misdemeanor complaints, can be reported up to seven (7) years after the fact unless a conviction did not follow as a result of the misdemeanor complaint or arrest[3]; and  (2) Criminal convictions can only be reported for up to seven (7) years, and cannot be reported if pardoned[4].

As should be clear at this point, California is very protective about the disclosure of a potential employee’s history with the criminal justice system. As such, California’s “Ban the Box” law prohibits an employer from inquiring about: (1) arrests that did not culminate in a conviction, (2) any arrests where the employee has successfully completed a pretrial diversion program[5], and (3) criminal conduct, where the records have been sealed, dismissed, or expunged[6].

Finally, California restricts the inclusion of a credit report in connection to an employment background check, except for a few specifically enumerated exceptions: (1) the employee is seeking a job with the Deportment of Justice (“DOJ”), (2) the employee is seeking a managerial position, (3) the employee is seeking a position in law enforcement[7], (4) the employee is seeking a position where the law requires that a credit report be obtained, (5) the employee is seeking a job that provides them access to specific personal information[8], and (6) the employee is seeking a job, which requires that they be named on their employer’s bank account or otherwise have access to the employer’s finances,

In the next portion of this series, Part IV, we will discuss why California provides their citizens with greater protections than the FCRA.

[1] Bankruptcy information is the exception to this rule, and can be reported up to ten (10) years after it occurred. Also note that jobs and insurance policies involving certain dollar amounts may be reported over the seven (7) year cut-off, and criminal convictions are allowed to be reported indefinitely under the FCRA.

[2] Laws mandated security clearance for example.

[3] There are some exceptions to this rule, but will not be covered in this article.

[4] As mentioned above, this exception does not apply if there is a separate law requiring an employer to investigate a potential employee’s criminal record further.

[5] Diversion programs are frequently offered in cases involving drug crimes.

[6] As a practical matter, is for this reason that anyone with a juvenile record should seek to have that record sealed, dismissed, or expunged.

[7] In order to allow for this, it must be a “sworn” peace officer, not someone who performs similar functions.

[8] The positions that trigger this exception are not within the scope of this article.