Eliminate Background Check Risks: A Primer

Eliminate Background Check Risks: A Primer
By foleyfoleypc on May 6, 2026

Background checks feel routine. They’re not.
This is one of the most heavily regulated steps in your entire hiring process — and most employers don’t realize it until they’re staring down a lawsuit.

Between the Fair Credit Reporting Act (FCRA), a patchwork of state laws, and anti-discrimination rules, the margin for error is razor thin. Automated hiring tools are making things faster. They’re also making compliance mistakes easier to miss.

Here are three mistakes we see employers make — and how to avoid them.

Inconsistent Practices
If you’re screening some candidates one way and others differently, you have a problem. Inconsistency doesn’t just look bad — it creates discrimination exposure and makes your hiring decisions nearly impossible to defend.
The fix is straightforward: build a standardized process and stick to it. Every time. For every applicant. Across every jurisdiction you operate in.

FCRA Violations
Here’s what surprises most employers: the FCRA isn’t just about credit checks. It governs any background screening performed by a third-party company.

And the violations that land employers in litigation? They’re usually procedural — not substantive. The underlying hiring decision was fine. The paperwork wasn’t.

If you’re using an outside screening company, you are required to:

• Obtain written authorization
• Provide required disclosures
• Issue pre-adverse action letters
• Allow time for disputes
• Issue final adverse action notices

Miss any one of these steps and you’ve got exposure — even if the candidate never should have been hired in the first place.

Ignoring State-Specific Rules
What’s compliant in one state can be illegal in the next. Full stop.
Dozens of states have enacted “Ban the Box” and fair chance laws that prohibit criminal history questions on applications and restrict when background checks can even be initiated. Many states also require an individualized assessment — considering the nature of the offense, time elapsed, and relevance to the job — before any adverse decision is made.

If you’re a multi-state employer running a one-size-fits-all background check process, you are almost certainly out of compliance somewhere.

The Bottom Line
Audit your hiring process. Train your team. Apply your policies uniformly — every time, everywhere. Proactive compliance is always cheaper than reactive litigation. And once you get your procedure in place, you will be good to go. Get it right and be done.