Felony Background Check: What Employers Can See

Introduction

A felony background check is a comprehensive screening process that reveals serious criminal convictions in an individual’s history, providing employers with critical information for making informed hiring decisions. Unlike misdemeanor offenses, felonies represent the most serious category of crimes under U.S. law, typically punishable by imprisonment for more than one year or significant fines.

This type of background screening applies to virtually all employers across industries, from small businesses hiring their first employee to large corporations conducting enterprise-level screenings. However, the process is heavily regulated by federal laws like the Fair Credit Reporting Act (FCRA) and various state and local “ban-the-box” legislation.

Understanding felony background check compliance isn’t just about following the rules—it’s about protecting your organization from discrimination lawsuits, ensuring workplace safety, maintaining regulatory compliance in regulated industries, and building a fair, transparent hiring process. Non-compliance can result in significant financial penalties, legal liability, and reputational damage that far exceeds the cost of proper implementation.

Legal Overview

Federal Framework

The Fair Credit Reporting Act (FCRA) serves as the primary federal law governing felony background checks when conducted through third-party Consumer Reporting Agencies (CRAs). Under the FCRA, employers must obtain written consent from candidates before ordering background checks and provide adverse action notices if they decide not to hire based on criminal history.

The Equal Employment Opportunity Commission (EEOC) provides additional guidance through its enforcement of Title VII of the Civil Rights Act. The EEOC’s position, established in its 2012 guidance, is that blanket exclusions of individuals with criminal records may constitute disparate impact discrimination against protected classes, particularly racial minorities who are statistically overrepresented in the criminal justice system.

Key Rights and Obligations

Pennsylvania Background:

Obtain written authorization before conducting background checks
Use only FCRA-compliant reporting agencies
Follow adverse action procedures, including pre-adverse action notices
Conduct individualized assessments rather than blanket exclusions
Maintain confidentiality of background check information

Candidate Rights:

Right to disclosure and consent before screening
Right to receive copies of background reports
Right to dispute inaccurate information
Right to know if criminal history affected hiring decisions
Protection from discriminatory screening practices

Enforcement and Penalties

FCRA violations can result in actual damages, statutory damages up to $1,000 per violation, punitive damages, and attorney fees. The Federal Trade Commission (FTC) and Consumer Financial Protection Bureau (CFPB) actively enforce FCRA compliance, with recent settlements reaching millions of dollars.

EEOC discrimination claims based on criminal history screening have resulted in significant penalties, including a $1.6 million settlement with Dollar General in 2013 for overly broad criminal history exclusions.

Who Must Comply

Covered Entities

All Private Employers: Any business that hires employees, regardless of size, must comply with FCRA requirements when using third-party background check services. This includes:

Corporations and LLCs
Partnerships and sole proprietorships
Nonprofit organizations
Staffing agencies and contractors

Government Employers: Federal, state, and local government agencies conducting background checks on civilian employees must follow FCRA rules, though different standards may apply to law enforcement and security positions.

Licensing Boards: Professional licensing organizations that consider criminal history in licensing decisions must comply with relevant federal and state requirements.

Limited Exemptions

Direct Employer Screening: When employers conduct background checks directly (without using a CRA), they’re not subject to FCRA requirements but must still comply with EEOC guidance and state laws.

Certain Regulated Positions: Some positions in banking, healthcare, education, and transportation have specific statutory exclusions for certain types of criminal history, though individualized assessment requirements may still apply.

Independent Contractors: While not technically employees, many courts have found that FCRA requirements apply to Background Check FAQ:s on contractors and gig workers.

Determining Applicability

Employers should evaluate whether they’re using a Consumer Reporting Agency (any third-party service that provides background checks), whether they’re making employment decisions based on criminal history, and what state and local laws apply to their specific locations and industry.

Requirements Breakdown

FCRA-Specific Obligations

Disclosure and Authorization: Employers must provide candidates with a clear, standalone disclosure that a background check may be obtained and secure written authorization. The disclosure cannot be buried in employment applications or combined with other documents.

Certification to CRA: Employers must certify to the background check company that they have obtained proper authorization, will comply with FCRA requirements, and will not use the information unlawfully.

Pre-Adverse Action Process: Before making a negative hiring decision based on criminal history, employers must:
1. Provide the candidate with a copy of the background report
2. Include a summary of FCRA rights
3. Allow reasonable time (typically 3-5 business days) for the candidate to respond

Final Adverse Action Notice: If proceeding with the negative decision, employers must provide a final adverse action notice including the CRA’s contact information, a statement that the CRA didn’t make the hiring decision, and the candidate’s right to dispute the report’s accuracy.

EEOC Individualized Assessment Requirements

Rather than implementing blanket bans on hiring individuals with criminal records, employers should consider:

Nature of the Crime: How does the offense relate to the specific job duties and responsibilities?

Time Since Conviction: Has sufficient time passed to indicate rehabilitation? The EEOC doesn’t specify exact timeframes but encourages considering the individual circumstances.

Nature of the Job: Does the position involve security, financial responsibility, or vulnerable populations that create legitimate business necessity for criminal history restrictions?

Documentation Requirements

Employers must maintain records of their background check processes, including authorization forms, background reports, adverse action notices, and documentation of individualized assessments. These records should be kept separate from personnel files and maintained according to FCRA retention requirements.

Compliance Steps

Implementation Checklist

1. Policy Development

Create written criminal history screening policies
Define which positions require background checks
Establish criteria for evaluating criminal history
Train hiring managers on proper procedures

2. Vendor Selection

Choose an FCRA-compliant Consumer Reporting Agency
Verify the vendor’s accreditation and compliance procedures
Review service agreements for liability and accuracy provisions

3. Process Implementation

Integrate disclosure and authorization into hiring workflow
Create systems for tracking adverse action timelines
Establish procedures for candidate disputes and corrections
Implement secure storage for background check information

4. Training and Monitoring

Train HR staff and hiring managers on FCRA requirements
Regular compliance audits and process reviews
Stay updated on changing state and local laws
Monitor EEOC guidance and enforcement trends

Best Practices

Timing Considerations: Many employers now delay background checks until after extending conditional offers of employment to comply with ban-the-box laws and reduce unconscious bias.

Clear Communication: Provide candidates with information about your background check process, what you’re looking for, and how criminal history factors into hiring decisions.

Consistent Application: Apply criminal history screening policies consistently across all candidates for similar positions to avoid discrimination claims.

Regular Updates: Review and update criminal history policies annually to ensure compliance with changing laws and business needs.

Common Violations

Frequent FCRA Mistakes

Inadequate Disclosure: Using disclosures that are too small, buried in other documents, or combined with liability waivers. A major retailer paid $1.2 million in 2017 for FCRA violations including inadequate disclosure forms.

Rushed Adverse Action: Failing to provide adequate time between pre-adverse action notices and final decisions. Courts have found that same-day or next-day final adverse action notices violate FCRA requirements.

Improper Authorization: Using broad, open-ended authorizations that don’t specify the types of reports being obtained or combining authorization with other employment documents.

EEOC Discrimination Issues

Blanket Exclusion Policies: Automatically disqualifying all applicants with any criminal history, regardless of relevance to the job. A transportation company settled for $2.2 million in 2019 for such practices.

Failure to Consider Rehabilitation: Not allowing candidates to provide evidence of rehabilitation, education, or other mitigating factors.

Inconsistent Application: Applying different standards to different candidates or positions without legitimate business justification.

How to Address Violations

Immediate Remediation:

Stop problematic practices immediately
Review and correct policies and procedures
Retrain staff on proper compliance procedures
Consider re-evaluating affected candidates

Ongoing Prevention:

Implement regular compliance monitoring
Establish clear escalation procedures for unusual situations
Maintain detailed documentation of all decisions
Consider periodic legal review of policies and practices

State Variations

Ban-the-Box Laws

Over 35 states and 150+ cities have enacted “ban-the-box” legislation requiring employers to delay criminal history inquiries until later in the hiring process. Key variations include:

Coverage: Some laws apply only to public employers, while others include private employers (often those with 15+ employees).

Timing: Most require waiting until after the initial application, though some specify waiting until after interviews or conditional offers.

Exceptions: Many provide exceptions for positions involving security, vulnerable populations, or roles with specific statutory restrictions.

Notable State Requirements

California: The Fair Chance Act prohibits most private employers from asking about criminal history until after extending a conditional offer and requires individualized assessments with specific procedural requirements.

New York: Both state and New York City laws restrict criminal history inquiries, with the city requiring a detailed fair chance analysis for any adverse decisions.

Texas: While lacking comprehensive ban-the-box laws, Texas has specific protections for certain types of criminal records and restrictions on considering arrests that didn’t lead to convictions.

Multi-State Considerations

Nationwide Employers: Companies operating in multiple states should generally adopt policies that comply with the most restrictive applicable laws to ensure consistent, compliant practices.

Remote Work: With increased remote work, consider the laws applicable to where employees work, not just where the company is headquartered.

Vendor Compliance: Ensure your background check provider can accommodate varying state requirements and provide appropriate disclosures for different jurisdictions.

FAQ

1. How far back can felony background checks go?

Most states allow employers to consider felony convictions indefinitely, though some states like California limit reporting of most convictions to seven years. However, the EEOC encourages employers to consider the age of convictions when making hiring decisions, as older offenses may be less relevant to current job performance.

2. Can employers automatically disqualify applicants with felony convictions?

Generally no. Federal guidance strongly discourages blanket exclusions and requires individualized assessments considering the nature of the crime, time elapsed, and job relevance. Some positions in regulated industries may have specific statutory disqualifications, but these are narrow exceptions.

3. What’s the difference between arrests and convictions on background checks?

Arrests without convictions generally shouldn’t be used in hiring decisions as they don’t establish guilt. Many states prohibit considering arrests that didn’t result in convictions. Focus on convictions, which represent completed legal proceedings establishing criminal responsibility.

4. Do sealed or expunged records show up on background checks?

Properly expunged or sealed records should not appear on background checks, though database errors sometimes occur. If sealed records appear, candidates have the right to dispute the information, and employers should not consider such records in hiring decisions.

5. How long should employers keep background check records?

FCRA requires maintaining background check information for at least one year after the hiring decision. However, many employment attorneys recommend longer retention periods, and some state laws require extended retention. Keep these records separate from personnel files and ensure secure disposal when no longer needed.

Conclusion

Navigating felony background check requirements requires balancing legitimate business interests with legal compliance and fair hiring practices. The landscape continues evolving with new state and local laws, changing EEOC guidance, and increased focus on criminal justice reform.

Success requires staying current with legal developments, implementing robust policies and procedures, training staff properly, and working with reliable, compliant service providers. While the requirements may seem complex, proper implementation protects both employers and job candidates while supporting fair, informed hiring decisions.

The investment in compliance pays dividends through reduced legal risk, better hiring outcomes, and demonstration of corporate responsibility. Organizations that get this right create competitive advantages through access to broader talent pools and stronger employer brands.

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This article provides educational information and should not be considered legal advice. Consult with qualified employment attorneys for guidance on your specific situation and jurisdiction.