When it comes to hiring employees, there is a patchwork of federal and state regulations that require or restrict the types of information you can, can’t or must seek. In other words, it is important that you seek and follow the advice of your attorney about such laws in your specific circumstances and location. According to guidelines from the Small Business Administration and others, the following is a list of the types of information employers often consult as part of a pre-employment check and the laws governing access and use for making hiring decisions.

Also on SmallBusiness.comHow Pre-Employment Background Checks Can Protect Your Small Business

Credit Reports

Under the Fair Credit Reporting Act (FCRA), businesses must obtain an employee’s written consent before seeking an employee’s credit report. If you decide not to hire or promote someone based on information in the credit report, you must provide a copy of the report and let the applicant know of his or her right to challenge the report under the FCRA. (More information: Using Consumer Reports: What Employers Need to Know)

Criminal Records

Consult a lawyer or do further legal research on the laws of your state before exploring whether or not an applicant has a criminal past. In some industries, like those that involve law enforcement, banking, licensing or coming into contact with children (and others), formal background checks must be conducted. In other industries, it can be against the law for an employer to conduct such a background check (no one said running a business was going to be simple). Again, your lawyer should guide you on this issue as it relates to your local and state regulations, but here are some general resources to check.

State-by-state list of regulations regarding arrest and criminal record background checks:

  • NOLO.com provides state-by-state arrest and conviction guidelines

Resources on criminal background checks from the Federal Bureau of Investigation (FBI):

Lie Detector Tests

The Employee Polygraph Protection Act (EPPA) prohibits most private employers from using lie detector tests, either for pre-employment screening or during the course of employment. (More information: U.S. Department of Labor: Employee Polygraph Protection Act (EPPA)

Medical Records

Under the Americans with Disabilities Act, employers cannot discriminate based on a physical or mental impairment or request an employee’s medical records. Businesses can, however, inquire about an applicant’s ability to perform specific job duties. Some states also have stronger laws protecting the confidentiality of medical records. (More information: U.S. Department of Labor ADA technical assistance materials)


Bankruptcies are a matter of public record and may appear on an individual’s credit report. The Federal Bankruptcy Act prohibits employers from discriminating against applicants because they have filed for bankruptcy.

Military Service

Military service records may be released only under limited circumstances, and consent is generally required. The military may, however, disclose name, rank, salary, duty assignments, awards and duty status without the service member’s consent.

School Records

Under the Family Educational Rights and Privacy Act and similar state laws, educational records such as transcripts, recommendations and financial information are confidential and cannot be released by the school without a student’s consent.

Workers’ Compensation Records

Workers’ compensation appeals are a matter of public record. Information from a workers’ compensation appeal may be used in a hiring decision if the employer can show the applicant’s injury might interfere with his ability to perform required duties. Such records are maintained by your state government’s agency related to employment.

Related Articles