Navigating Background Checks for Employment in Texas: A Legal Guide
A comprehensive overview of federal and Texas-specific laws governing pre-employment screening, ensuring fair hiring practices
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Conducting background checks for employment in Texas involves navigating a complex web of federal and state laws. While Texas generally allows employers to perform background checks, several regulations aim to protect job applicants from unfair discrimination and ensure the accuracy and proper use of sensitive information.
Federal Laws Governing Background Checks
The primary federal law impacting employment background checks is the Fair Credit Reporting Act (FCRA). If an employer uses a third-party company (a Consumer Reporting Agency or CRA) to conduct a background check, they must comply with the FCRA. Key provisions include:
Notice and Consent: Employers must provide the applicant with written notice that a background check may be conducted and obtain their written consent before procuring the report.
Pre-Adverse Action and Adverse Action: If an employer intends to take an adverse action (like not hiring someone) based on information in the background check report, they must first provide the applicant with a copy of the report and a "Notice of Rights Under the FCRA." This allows the applicant an opportunity to review the information and dispute any inaccuracies. After a reasonable waiting period (typically five business days), the employer can then take the adverse action and must provide a final adverse action notice.
Accuracy: CRAs are obligated to ensure the information they provide is accurate and up-to-date. Applicants have the right to dispute inaccurate information.
Another crucial federal law is Title VII of the Civil Rights Act of 1964, enforced by the Equal Employment Opportunity Commission (EEOC). While Title VII doesn't prohibit background checks, it prohibits discrimination based on race, color, religion, sex, or national origin. The EEOC advises that blanket exclusions based on criminal records may have a disparate impact on protected groups. Employers should conduct an individualized assessment, considering:
The nature and gravity of the offense or conduct.
The time elapsed since the offense or completion of the sentence.
The nature of the job held or sought.
The Fair Chance to Compete for Jobs Act of 2019 ("Ban the Box" at the federal level) prohibits federal agencies and federal contractors from asking about criminal history until a conditional offer of employment has been made.
Texas-Specific Regulations and Limitations
While Texas doesn't have a broad "ban the box" law for all private employers akin to some other states, there are important state-level considerations:
Criminal Records and the Seven-Year Rule: Texas Business and Commerce Code § 20.05 limits consumer reporting agencies from reporting non-conviction information (arrests not leading to convictions, civil judgments, paid tax liens) that is more than seven years old for positions paying less than $75,000 annually. For positions paying $75,000 or more, this seven-year limit typically does not apply. Criminal convictions, however, can generally be reported indefinitely, though the EEOC guidance still encourages individualized assessment.
Expunged Records: Texas law specifies that applicants are not required to disclose criminal records that have been expunged by a court order. Employers should not use expunged records in hiring decisions if they somehow discover them.
Occupational Licensing: The Texas Occupations Code governs various licensed professions. For many licensed occupations, specific criminal history guidelines exist, and a criminal background check is often a mandatory part of the licensing process. The Texas Department of Licensing and Regulation (TDLR) even offers a service for individuals to get an evaluation letter to determine their eligibility for a license based on their criminal history.
Negligent Hiring: Employers in Texas can be held liable for negligent hiring if they fail to perform a reasonable background check and hire an individual with a criminal history who subsequently causes harm that a background check would have revealed. This creates an incentive for employers to conduct thorough checks, while still adhering to anti-discrimination laws.
Local Ordinances: While the Texas Regulatory Consistency Act (effective September 1, 2023) nullifies most local "ban the box" ordinances, some cities, like Austin, previously had their own fair chance hiring ordinances. Employers should always be aware of the most current state and local regulations.
Job References and Defamation: Texas Labor Code, Chapter 103, provides employers with protections against defamation lawsuits when providing job references, as long as they do not knowingly report false information.
In conclusion, Texas employers conducting background checks must diligently comply with both federal laws like the FCRA and Title VII, and specific Texas statutes, particularly concerning the use of criminal history information and the implications for licensed professions. The overarching principle remains balancing the employer's need for information with the applicant's right to fair consideration and protection against discrimination.
Information published to or by The Industry Leader will never constitute legal, financial or business advice of any kind, nor should it ever be misconstrued or relied on as such. For individualized support for yourself or your business, we strongly encourage you to seek appropriate counsel.
