Background Check Before Job Offer: FCRA, ADA, and Adverse Action Rules

A background check before a job offer is legal under federal law for most types of screening, provided the employer gives you a written disclosure and gets your written permission first. The two big exceptions run in opposite directions: criminal history questions and searches are pushed to after a conditional offer in roughly 37 states and more than 150 cities and counties, and medical examinations are prohibited before a conditional offer everywhere under the Americans with Disabilities Act. Everything else — identity, employment history, education, driving records, and, with separate consent, credit — can generally be checked before an offer is on the table.

What the FCRA Requires Before Any Check

The Fair Credit Reporting Act governs any background check an employer orders through a consumer reporting agency, which covers almost all commercial employment screening. The FCRA does not restrict timing. It restricts process.¹

Before ordering the report, the employer has to tell you in writing that a consumer report may be obtained for employment purposes, and it has to get your written permission. The disclosure must be a standalone document. It cannot sit inside the job application, be tacked onto an employee handbook, or be combined with a liability waiver. A short description of what a consumer report is may be included, but nothing else that distracts from the notice.¹

The consent form usually asks for your full name, date of birth, Social Security Number, and past addresses so the screening company can identify the correct jurisdictions to search. If the authorization is meant to cover future background checks during your employment, the form has to say so clearly.²

Criminal History and Ban-the-Box

Federal law is silent on when a criminal history check can happen, but state and local law often is not. Roughly 37 states and more than 150 cities and counties have adopted ban-the-box or fair-chance hiring rules that pull criminal history questions off the application and delay criminal record searches until later in the hiring process. In most of these places, an employer cannot ask about arrests or convictions until after making a conditional offer.

At the federal level, the Fair Chance to Compete for Jobs Act bars most federal agencies and federal contractors from requesting criminal history before extending a conditional offer, with limited exceptions. Private employers outside that law have to look to state and city rules, and those rules vary. Some cover only public employers. Others reach private businesses above a certain size. If a prospective employer is asking about your record before an offer, it is worth checking what your state or city allows.

Medical Exams and Drug Tests Under the ADA

The Americans with Disabilities Act draws a line the FCRA does not: medical examinations and disability-related inquiries are not permitted before a conditional offer. An employer can ask whether you are able to perform specific job functions, but it cannot require a medical exam or ask questions designed to reveal a disability until after an offer is extended.³

Once a conditional offer is on the table, the employer can require a medical exam and can condition the offer on the results, but only if every entering employee in the same job category faces the same exam regardless of disability.

Drug tests generally are not considered medical examinations under the ADA, so pre-offer drug screening is typically allowed. State law is a separate question. A growing number of states regulate how employers can use marijuana test results in particular, and the rules differ from one jurisdiction to the next.³

Credit Reports and Salary History

An employer can pull your credit report only with your written consent, and a growing number of states restrict credit checks to positions that involve real financial responsibility. When a credit report is used, it can show payment history, collection accounts, and bankruptcies going back up to ten years.⁴

Salary history is a related but separate issue. Roughly 22 states and about two dozen local jurisdictions bar employers from asking applicants about pay history, and in those places employers also cannot get that information indirectly through a background check vendor’s employment verification report. Some of these laws go further and prohibit using voluntarily disclosed salary history to set pay.

What a Pre-Offer Background Check Can Cover

The scope of a pre-offer check depends on the role and applicable state law. Common categories include:

Criminal records across national, federal, state, and county databases, subject to the ban-the-box timing rules above. Consumer reporting agencies generally cannot report arrests that did not lead to conviction after seven years, and some states impose the same seven-year cap on convictions.
Identity verification through a Social Security Number trace, which also produces an address history.
Employment history — dates of employment and job titles with previous employers.
Education verification with the school, covering enrollment, attendance dates, and degrees earned.
Driving records, primarily for positions that involve driving. These show license status, violations, and accident history.
Credit reports, only with separate written consent and only where state law allows.⁴
Professional license verification with state licensing boards for regulated fields like nursing, law, or engineering.

If the Check Comes Back Bad: The Adverse Action Process

If something in the report makes the employer want to pull the opportunity, the FCRA requires a specific two-step process. You should see it play out before the rejection becomes final.

Pre-Adverse Action Notice

Before making a final decision, the employer has to send you a pre-adverse action notice with a copy of the background report and a copy of “A Summary of Your Rights Under the Fair Credit Reporting Act.” The point is to give you a chance to review the report and flag errors before the decision is locked in.⁵

The FCRA does not spell out an exact waiting period. It requires only a “reasonable” opportunity to respond. Five business days has become the common practice.

Final Adverse Action Notice

If the employer moves forward after the waiting period, it must send a final adverse action notice that includes the consumer reporting agency’s name, address, and phone number; a statement that the agency did not make the hiring decision and cannot explain the reasons for it; notice of your right to dispute the accuracy or completeness of the report with the agency; and notice that you can request a free copy of the report from the agency within 60 days. The notice can be delivered in writing, orally, or electronically.⁵

If you dispute information in the report, the consumer reporting agency must complete a reinvestigation within 30 days of receiving the dispute, extendable by 15 days if you submit new supporting information during the initial period.

Discrimination Limits on Criminal History Screening

A background check that complies with the FCRA can still run into Title VII of the Civil Rights Act. The EEOC’s enforcement guidance says that criminal-history screening policies can create a disparate impact against Black and Hispanic applicants, and that a blanket policy — everyone with a felony conviction, for example — can violate Title VII without adequate business justification.⁶

The EEOC recommends a targeted screen that weighs three factors known as the Green factors: the nature and gravity of the offense, how much time has passed, and whether the offense has a direct relationship to the duties of the job. The guidance also recommends an individualized assessment, giving a flagged applicant a chance to explain the circumstances — rehabilitation, post-conviction work history, character references, or evidence that the record itself is wrong — before the decision is final.⁶

The EEOC’s position on arrests without convictions is firm: rejecting someone based only on an arrest that did not result in a conviction is not job-related or consistent with business necessity. An employer can consider the underlying conduct if it is relevant to the position, but the arrest by itself is not evidence of wrongdoing.⁶

1
Federal Trade Commission. Background Checks – What Employers Need to Know
2
Federal Trade Commission. Background Checks – Prospective Employees: Keep Required Disclosures Simple
3
eCFR. 29 CFR 1630.14 – Medical Examinations and Inquiries Specifically Permitted
4
Consumer Financial Protection Bureau. A Summary of Your Rights Under the Fair Credit Reporting Act
5
Federal Trade Commission. Using Consumer Reports: What Employers Need to Know
6
U.S. Equal Employment Opportunity Commission. Enforcement Guidance on the Consideration of Arrest and Conviction Records in Employment Decisions Under Title VII of the Civil Rights Act