Many companies utilize pre-employment background checks to screen candidates prior to hiring. Background checks consist of many facets, including criminal history, credit check and health history. There are several federal and state laws that govern what information companies are allowed to collect from an applicant, and also what information a business can use in a hiring decision.
According to Business.gov, the laws on criminal history checks vary from state to state. Generally, businesses can factor in felony convictions, as well as recent misdemeanor convictions. Business.gov recommends consulting with an attorney before attempting to utilize criminal history in a hiring decision.
According to Business.gov, the Fair Credit Reporting Act, or FCRA, states that a company must obtain the written consent of an employment candidate before attempting to obtain her credit score. If a company decides not to offer employment to a candidate based on her credit history, the company must provide a copy of the candidate's credit report along with information on the candidates rights under FCRA. Under the FCRA, it is illegal to discriminate against applicants because they have filed for bankruptcy, according to Business.gov.
Health history is also a factor that can be used in a hiring decision. Under the Americans with Disabilities Act, or ADA, a company can only inquire about health issues that directly prevent the candidate from performing the duties of the position. If a candidate can perform the duties of the position with "reasonable accommodation," then a company may not deny him employment based on his disability, according to Business.gov.