Question: I own a company where my employees have to enter the homes of my clients. Can I have criminal background checks done on my current employees?

Answer: Yes, the law allows consumer reports and investigative consumer reports (commonly referred to as background checks) on existing employees for the purpose of evaluating the employee for promotion, reassignment or retention as an employee. Specific disclosures must be provided to your employees, along with written authorization as required by the federal Fair Credit Reporting Act (FCRA), the California Investigative Consumer Reporting Agencies Act (ICRAA), and the California Consumer Credit Reporting Agencies Act.

Consumer reports and/or investigative consumer reports contain information such as criminal histories, DMV reports, verification of education, license, and past employment history. By contrast, a consumer credit report contains information about an individual’s creditworthiness, credit standing, and credit capacity, which is used in determining the individual’s eligibility for employment. An employer is not required to comply with the California Consumer Credit Reporting Agencies Act requirements unless the employer seeks to obtain a consumer credit report.  A consumer credit report can only be obtained by employers in certain circumstances; so contact legal counsel if you wish to obtain an employee’s consumer credit report.

Both the FCRA and the ICRAA require employers to do the following before obtaining a consumer report and an investigative consumer report:

  • Provide separate FCRA and ICRAA written notices to the employee of the intent to obtain a background check report.
  • The FCRA notice must: (1) State that the report may be obtained for employment purposes; (2) Be clear, conspicuous, and in writing; and (3) Be in a document that consists solely of the disclosure.
  • The ICRAA notice must: (1) Be clear, conspicuous, and in writing; (2) Be in a document that consists solely of the disclosure; (3) State that an investigative consumer report may be obtained; (4) State the permissible purpose of the report; (5) State that the disclosure may include information about the employee’s character, general reputation, personal characteristics, and mode of living; (6) Identify the investigative consumer reporting agency that will conduct the investigation by name, address, and telephone number; (7) State the nature and scope of the information requested; (8) Provide a summary of the employee’s rights under the ICRAA; and (9) Contain a box that the employee may check to receive a copy of the credit report.
  • Obtain the employee’s written authorization before the background check is obtained;
  • The employer must certify to the reporting agency performing the background check that the employer has complied with the requirements of the FCRA and the ICRAA by making the applicable disclosures to the employee; and
  • The employer (or reporting agency) must provide a copy of the report to the employee if the employee requests it. Agencies who conduct background checks often provide the necessary notices for obtaining background checks, and may help you obtain employee authorizations. It is important to use an agency that follows the FCRA and ICRAA requirements. When you receive the background check reports, if you believe you will be discharging an employee based on the report’s findings, you should contact an attorney to discuss the report’s findings since the law restricts employment decisions based on an employee’s criminal history. There are also certain procedures that must be adhered to before discharging an employee based on criminal history.