No specific law precludes an employer from conducting a consumer background check before making a job offer (this is distinguished from a criminal background check). However, many employers wait to conduct consumer background checks until post-offer/pre-employment.
There are privacy concerns that should always be kept in mind when conducting a background check, regardless of the time. One is the additional layer of privacy offered to Californians by the right of privacy guaranteed to them in the California Constitution.
Not all states have a separate right of privacy, but California zealously protects its residents’ privacy. It is considered an invasion of that privacy to dig into someone’s background, but the offer of employment, even if conditional, is considered a reason to do that search.
Additionally, if an employer conducts a pre-offer background check and uncovers certain private information, then makes an adverse decision accordingly, it can be considered a discriminatory action.
An applicant’s age, race, religion, etc. can be discovered during such a check, and a claim of discrimination can be made if an adverse decision was made because of such protections.
The U.S. Equal Employment Opportunity Commission has issued guidelines on this topic (see www.eeoc.gov/eeoc/publications/background_checks_employers.cfm). These types of background checks do not present an issue if the employer does not use the information in a way that discriminates on the basis of protected classes such as race, gender, national origin, disability, and in some states, sexual orientation.
If the background check identifies issues of concern to you, consider discussing the issues with the candidate as there are some background checks that come back with incorrect information. In today’s world of identity theft, it’s a best practice to give an applicant a chance to explain any problem, whether “pre” or “post” offer.
However you practice, it is important to be consistent in your policies. Random background screening is inadvisable, and can easily lead to a claim of discrimination. When developing your policies, it is best to consult with legal counsel.
The Labor Law Helpline is a service to California Chamber of Commerce preferred and executive members. For expert explanations of labor laws and Cal/OSHA regulations, not legal counsel for specific situations, call (800) 348-2262 or submit your question at www.hrcalifornia.com.