State-by-State Background Check Compliance Laws

While the federal Fair Credit Reporting Act (FCRA) establishes baseline requirements for employment background checks, many states have enacted additional laws that create a complex compliance landscape. Employers operating in multiple states face the challenge of navigating these varying requirements while maintaining consistent hiring practices.

This guide provides an overview of key state-level compliance considerations for employment background screening.

Categories of State Laws

State background check laws generally fall into several categories:

• Ban-the-box/Fair chance hiring: Restrictions on when criminal history can be considered
• Criminal record restrictions: Limitations on what records can be reported or considered
• Consumer report restrictions: Additional FCRA-like requirements
• Industry-specific requirements: Special rules for certain sectors
• Salary history bans: Restrictions on inquiring about prior compensation
• Credit check restrictions: Limitations on use of credit reports in employment

States with Significant Requirements

California

California has some of the most comprehensive background check regulations:

• Fair Chance Act (AB 1008): Employers with 5+ employees cannot inquire about criminal history until after a conditional offer
• Seven-year rule: Consumer reports cannot include convictions older than 7 years
• Individualized assessment required: Must consider nature of offense, time elapsed, and job-relatedness
• Pre-adverse action notice: Must provide specific notice with factors considered
• Salary history ban: Cannot ask about or use prior salary information
• Credit check restrictions: Limited to specific positions (financial, managerial, etc.)

New York

New York combines state and local requirements:

• Article 23-A: Requires specific factors be considered when evaluating criminal records
• NYC Fair Chance Act: Criminal history inquiry only after conditional offer; specific notice requirements
• Written analysis required: Must provide written statement of Article 23-A factors if denying employment
• Salary history ban: Cannot inquire about or rely on salary history
• Seven-year limit on convictions: Applies to certain consumer reports

Illinois

Illinois has several significant restrictions:

• Job Opportunities for Qualified Applicants Act: Employers with 15+ employees cannot inquire about criminal history until interview stage or conditional offer
• Employee Credit Privacy Act: Prohibits credit checks for most positions
• BIPA (Biometric Information Privacy Act): Strict requirements for biometric data (fingerprints)
• Salary history ban: Cannot inquire about prior wages

"The patchwork of state laws means employers must develop location-specific compliance strategies rather than one-size-fits-all approaches."

Massachusetts

• CORI Reform: Criminal history only after determining candidate is otherwise qualified
• Lookback limits: Felonies within 10 years, misdemeanors within 5 years only
• Sealed records: Cannot inquire about sealed or expunged records
• Pay equity law: Salary history inquiry prohibited

New Jersey

• Opportunity to Compete Act: Employers with 15+ employees cannot inquire about criminal history on initial application
• Specific timing: Can only inquire after first interview
• Written notice required: Before adverse action based on criminal history
• Salary history ban: Cannot screen applicants based on prior salary

Pennsylvania

• Criminal History Record Information Act: Only felony and misdemeanor convictions can be considered, and only if they relate to job suitability
• Philadelphia: Ban-the-box for employers with 10+ employees
• Pittsburgh: Fair chance hiring ordinance

Colorado

• Chance to Compete Act: Employers with 11+ employees cannot inquire about criminal history on application
• Can only consider after interview or conditional offer
• Equal Pay for Equal Work Act: Salary history ban and pay transparency requirements

Washington

• Fair Chance Act: Cannot advertise positions as not available to people with criminal records; cannot inquire until after determining applicant is otherwise qualified
• Seattle: Additional fair chance requirements for city employers
• Equal Pay and Opportunities Act: Salary history ban

Connecticut

• Ban-the-box: Cannot inquire about criminal history on initial application
• Credit check restrictions: Limited to financial institutions and certain positions
• Salary history ban: Cannot inquire about or rely on wage history

Hawaii

• Criminal history inquiry restrictions: Cannot consider arrests not resulting in conviction
• Conviction consideration: Must consider relationship to job, rehabilitation evidence
• Salary history ban: Cannot inquire about or consider prior wages

Oregon

• Ban-the-box: Cannot require disclosure of criminal history until after interview
• Pay Equity Act: Salary history inquiry prohibited
• Portland: Additional restrictions at city level

Vermont

• Fair Employment Practices Act: Cannot inquire about criminal history on application
• Credit check prohibition: Cannot use credit reports for employment decisions
• Salary history ban: Cannot seek prior wage information

Common State Law Categories

Ban-the-Box States (Private Employers)

States with ban-the-box laws affecting private employers include:

• California
• Colorado
• Connecticut
• Hawaii
• Illinois
• Maine
• Maryland (with fair chance certification)
• Massachusetts
• Minnesota
• New Jersey
• New Mexico
• New York
• Oregon
• Rhode Island
• Vermont
• Washington

States with Credit Check Restrictions

States limiting use of credit reports in employment include:

• California
• Colorado
• Connecticut
• Delaware
• Hawaii
• Illinois
• Maryland
• Nevada
• Oregon
• Vermont
• Washington

States with Salary History Bans

States prohibiting salary history inquiries include:

• California
• Colorado
• Connecticut
• Delaware
• Hawaii
• Illinois
• Maine
• Maryland
• Massachusetts
• Nevada
• New Jersey
• New York
• Oregon
• Rhode Island
• Vermont
• Washington

City and County Ordinances

In addition to state laws, many cities and counties have enacted their own requirements. Major jurisdictions include:

Major Cities with Fair Chance Hiring Laws

• New York City: Comprehensive fair chance act with specific notice requirements
• Los Angeles: Fair Chance Initiative for Hiring Ordinance
• San Francisco: Fair Chance Ordinance
• Philadelphia: Fair Criminal Records Screening Standards
• Chicago: Ban-the-box for employers with 15+ employees
• Seattle: Fair Chance Employment Ordinance
• Austin: Fair Chance Hiring Ordinance
• Portland: Ban-the-box ordinance
• Washington D.C.: Fair Criminal Record Screening Amendment Act

Industry-Specific State Requirements

Healthcare

Many states have specific background check requirements for healthcare workers including:

• Mandatory FBI fingerprint checks
• State healthcare worker registries
• Abuse registry checks
• Specific disqualifying offenses

Education

Most states require:

• Fingerprint-based background checks for school employees
• Checks against sex offender registries
• State education department clearances

Financial Services

State insurance and banking regulations may require:

• Credit checks
• Fingerprint submissions
• Specific licensing background checks

Transportation

State requirements may supplement federal DOT rules:

• Additional MVR requirements
• State-specific endorsement checks
• Livery and rideshare driver requirements

Compliance Best Practices

For Multi-State Employers

1. Create a compliance matrix: Document requirements for each state where you operate
2. Consider uniform policies: Adopt the most restrictive requirements company-wide for consistency
3. Stay current: Laws change frequently; review requirements at least annually
4. Work with qualified vendors: Ensure your screening provider understands state requirements
5. Train HR staff: Ensure interviewers and hiring managers understand location-specific rules

Documentation Requirements

• Maintain records of individualized assessments
• Document decision-making factors for criminal history evaluations
• Retain copies of all notices provided to candidates
• Keep records of timing (when criminal history was inquired about)

Penalties for Non-Compliance

State law violations can result in:

• Civil penalties: Many states impose per-violation fines
• Private lawsuits: Candidates may sue for violations
• Class actions: Systemic violations can lead to class action litigation
• Regulatory enforcement: State agencies may investigate and impose sanctions
• Injunctive relief: Courts may require changes to policies and practices

Trends to Watch

Expanding Ban-the-Box

More states and cities are adopting fair chance hiring laws, with broader coverage and stricter requirements.

Cannabis Legalization Impact

As more states legalize cannabis, laws protecting off-duty use and limiting employer action on positive tests are emerging.

Pay Transparency

Salary history bans are being supplemented by pay transparency requirements mandating disclosure of salary ranges in job postings.

Algorithmic Accountability

States are beginning to regulate automated decision-making tools, including those used in screening.

How Clear Facts Solutions Helps

Clear Facts Solutions helps employers navigate state compliance complexity:

• State-specific compliance guidance for your hiring locations
• Compliant forms and disclosures that meet state requirements
• Jurisdiction-aware adverse action processes
• Screening packages designed for state law compliance
• Regular compliance updates as laws change
• Training resources for HR teams
• Audit support for compliance reviews