We get lots of questions regarding the 7-year "lookback" rule for reporting adverse information.
We're turning over this incredibly important question to Melissa Snyder, Good Egg's attorney and compliance manager. Melissa is FCRA-Advanced Certified from the Professional Background Screening Association (PBSA).
The big disclaimer, of course, is that any information she provides on this blog is simply educational in nature, not legal advice. You should consult your own attorney regarding your specific situation.
Let's get to it . . .
Can you discuss the 7-year "lookback" for reporting adverse information—how to calculate, what's included, and do state laws vary?
This is one of my favorite topics! But it's complex.
Bankruptcy cases aside, Section 605(a) of the federal Fair Credit Reporting Act limits the reporting of "any other adverse item of information, other than records of convictions of crimes which antedates the report by more than seven years." (15 U.S.C. § 1681c.)
So let's decipher what that means. Here are the three main points we'll discuss today:
- The word "adverse" is key.
- You can't calculate the 7-year lookback period properly if you use the wrong date to start the clock running.
- While 7 years is standard for conviction information, your consumer reporting agency (CRA) should be flexible.
1. The word "adverse" is key. So what is adverse information?
The definition of adverse information may be narrower than you think. For example, the FTC has issued advisory opinions stating that employment verifications are considered "neutral." Since the information being reported is not "adverse," there is NO 7-year limitation on reporting discrepancies in employment history.
Even if the employment termination date is more than 7 years ago, CRAs can report discrepant employment dates and job titles, or the complete lack of verification of the employment (i.e., a statement from the so-called prior employer that the individual never worked for their company).
The same goes for education verifications. Since verifying employment history and education is often critical in order to determine whether a candidate is qualified to do the job, employers should make sure they understand whether their screening provider is unnecessarily withholding such discrepant results from the background check.
Conversely, the definition of adverse information may be broader than you think. Things like arrest warrants, extradition orders, and non-criminal violations/infractions are adverse items of information. Aside from complying with the restrictions imposed in certain "no non-convictions" or "no pending cases" states, your screening partner should not automatically exclude reportable adverse information just because that information itself may not be a "crime" or a "criminal charge."
Good Egg's approach to delivering adverse information: Unless our clients instruct otherwise, we at Good Egg like to err on the side of over-delivering reportable adverse information, where such information can lawfully be shared with our clients. We don't want to withhold reportable adverse information from you and then see a hired individual get arrested on their first day of work due to an undisclosed open warrant or an extradition order.
For example, if an in-scope extradition request or an active arrest warrant returns from the primary source, we want to report that (if the applicable jurisdiction permits it) because it is adverse information that could impact your hiring decision.
While CRAs who report this type of adverse information must be careful not to imply that the reported information is itself a "criminal case", we can (and do) use a separate template to report this type of relevant "non-felony/non-misdemeanor" adverse information, even when the underlying criminal case information falls outside of the scope of the background check and cannot be shared.
Employers should take time to review reporting guidelines with their service provider to see if they're getting a full picture of the applicant's history. But, as with all background information, the employer must remain mindful of its duty not to use any adverse information provided in violation of federal or state EEO laws.
2. Accurate 7-year reporting starts with proper selection of the date of the "adverse" activity. So, when does the clock start ticking?
For certain non-convictions like arrests and indictments where a final disposition is still pending, the arrest date or charge date is clearly the date of the adverse activity.
And in the 12 states (see list below) that limit conviction reporting to 7 years, the disposition/conviction date is the date of the adverse activity and should be used to calculate the 7 years. If needed, a CRA can also use the date of release from incarceration or the start date of parole to bring convictions into scope. [There are state laws that mirror the pre-1998 FCRA language and limit the reporting of arrests, indictments and convictions to those which, "from date of disposition, release or parole," predate the report by seven years or fewer.]
Based on a review of the legislative history of the FCRA and various state laws, probation dates should not be used to bring a case into scope.
CRAs can also get into trouble if they use a disposition/dismissal date to start the clock running on dismissed cases and other abandoned charges.
The FTC and Consumer Financial Protection Bureau (CFPB) formally took the position in 2013 that the 7-year lookback period for a dismissed charge begins to run on the date of the charge, not the date of dismissal. So, background screening providers who comply with the holdings of the regulatory entities will not use disposition dates to bring dismissed cases into scope.
As you can see, accurate 7-year reporting is extremely complicated. If your head isn't completely spinning at this point, I've made a broad attempt to summarize the 7-year rule below:
- NON-CONVICTIONS: Go by charge date; if unable to obtain charge date, use the arrest date. Do not use the disposition date!
- CONVICTIONS: Go by disposition date. However, for "seven-year states" that limit reporting convictions to 7 years from "disposition, release, parole," you can go by release date from incarceration or start date of parole, even if the conviction date is older than 7 years. Never consider probation to bring something into scope.
- SEVEN-YEAR STATES: California, Colorado, Kansas, Maryland, Massachusetts, Montana, Nevada, New Hampshire, New Mexico, New York, Texas, and Washington. [In some of these states, the 7-year reporting restriction for convictions only applies if the applicant does not meet a certain salary threshold. Also note: The District of Columbia limits the reporting of conviction data to 10 years.]
In the seven-year states, it is important to note that the 7-year rule does not relate to the jurisdiction where the record is held, but to the jurisdiction where the applicant lives and works, because that is where the applicant is afforded rights under applicable consumer protection laws.
For example, if a candidate lives in and applies for work in Texas, and has a 10-year old conviction out of a Florida county, that conviction will not be reported. But if a candidate lives in and applies for work in Florida, and has a 10-year old conviction out of a Texas county, that conviction will be included in our report.
3. While 7 years is standard, your CRA should be flexible. Do you require more than 7 years of criminal conviction data?
Background checks are not a one-size-fits-all service. You should have the option to obtain more than seven years of criminal conviction data if that is your desire (and the CRA can lawfully provide such data based on applicable state/local laws).
Most importantly, if you are required by law or regulation to do more than a 7-year criminal history search, your CRA should verify that and then oblige.
Some employers in certain industries (such as education, healthcare, companion care providers, financial services, government/law enforcement) are required to do 10-year criminal background checks, or must otherwise do a "thorough and comprehensive" criminal history search and may be exempt from the 7-year conviction reporting rules of various states.
It is imperative that employers understand that if their applicants live or work in any of the above seven-year states, their screening partner needs to be informed if they have a legal or regulatory mandate to do a more extensive criminal history search.
In such case, the employer will likely fall within a statutory exception to that state's 7-year conviction reporting limitation. In other words, unless you expressly notify your screening provider that you require more than a standard 7-year criminal search (and you can demonstrate that the screening falls within an applicable statutory exemption), your CRA will not be able to provide you with the additional data you need (beyond 7 years) to meet your own regulatory requirements.
In addition, employers should be wary that some CRAs only offer a seven-year search. Again, one-size-fits-all is never a best practice.
The beginning of the year is a good time to review your existing screening program and ensure you understand how much and what kind of data is being reported to you. If you are only getting 7 years of felony and misdemeanor conviction information, but you want more, now is the time to have that discussion with your background check company.
If they are a true compliance partner and not just a transactional service provider, they will explain the reporting limitations that various states impose upon them. And if your employees are located in a seven-year state, you can jointly determine if you meet an exemption that allows you to get more data. [Employers must remember that EEOC guidance requires them to take into consideration the time that has passed since the offense was committed and to determine whether the offense is related to the position sought.]
If those talks leave you scratching your head, reach out to Good Egg and we'd be happy to do a complimentary evaluation of your existing screening strategy—and to answer any stubborn reportability questions that are keeping you up at night.
Got a question for Melissa? Let us know!
Check out previous "Ask the Attorney" features:
- MVR Checks & Insurance Companies
- How Salary History Bans Affect Background Checks