Scherzer Blog

Politics in Employment Screening

As political expression becomes increasingly visible online, employers face a difficult question: Does political activism have a place in personnel decisions? While much of this information is publicly accessible, its use in hiring is governed by a complex web of federal, state, and local laws. Employers must carefully distinguish between protected political expression, criminal conduct, and in limited circumstances where political contributions may create regulatory compliance obligations.

Screening for Cultural Fit Based on Politics

Using political views or lawful participation to assess a cultural fit is a risky strategy. While federal law does not explicitly protect political affiliation for private-sector employees, many states (such as California, New York, and Colorado) and local jurisdictions do. Even in “at-will” states without specific political protections, using political beliefs as a filter can inadvertently create a discrimination claim. This occurs if political views correlate with protected characteristics like race, religion, or national origin.

Lawful Political Activity vs. Criminal Conduct

Peaceful rallies, advocacy, volunteering, and public expression are generally protected by state-level “off-duty conduct” laws. If an individual engages in rioting, vandalism, assault, or trespassing for example, an employer may consider the criminal offense. The focus must remain on the illegal act, regardless of whether it was motivated by a political cause. When evaluating such criminal history, employers must still adhere to “Fair Chance” or “Ban-the-Box” laws, which dictate when and how employers can ask about a candidate’s record.

When Political Donations Matter

In the financial sector, political screening is not just a choice—it is often a regulatory requirement. Under SEC Rule 206(4)-5, certain political contributions by “covered associates” can trigger a two-year ban on the firm receiving compensation from government clients. To remain compliant, firms may conduct political contribution reviews for relevant roles. These reviews typically cover the previous two years (or six months for certain new associates). This screening must be used strictly for regulatory compliance, not to vet a candidate’s personal ideology.

Bottom Line

Political screening can be a legal minefield. When handled with precision, background screening supports regulatory obligations; when handled poorly, it invites discrimination lawsuits.

Disclaimer: This communication is for general informational purposes only and does not constitute legal advice. The summary provided in this alert does not, and cannot, cover in detail what employers need to know about the amendments to the Philadelphia Fair Chance Law or how to incorporate its requirements into their hiring process. No recipient should act or refrain from acting based on any information provided here without advice from a qualified attorney licensed in the applicable jurisdiction.

March 5th, 2026|Compliance Corner, Employment Decisions|

Googling Job Applicants: Legal? Yes. Risky? Yes.

In today’s hiring landscape, it’s almost second nature for employers to type an applicant’s name into Google or check out their social media. If the information is public, it must be fair game, right?

Not exactly. While you can look, doing so without a structured process can expose your organization to significant legal and compliance risks.

Public Information Is Accessible But Comes With Hidden Liability

Employers may view publicly available online content without obtaining specific authorization. However, a simple search can unintentionally reveal protected characteristics such as age, race, religion, disability status, or pregnancy. Once discovered, this information could fuel discrimination claims if the applicant later challenges a hiring decision. The principle is simple: what’s seen can’t be unseen, and that creates risk.

Private Accounts Are Off-Limits

No employer should ever:

Request social media passwords
Ask applicants to access private accounts
Send “friend” requests to gain entry
Ask for screenshots of private content

In California, these actions are illegal under Labor Code § 980. Many other states have enacted similar protections.

FCRA Applies If Using An Outside Service

If an employer hires any third-party service to review an applicant’s online presence, the process becomes a consumer report under the Fair Credit Reporting Act (FCRA).That means employers must:

Provide a standalone written disclosure
Obtain written authorization
Follow pre-adverse and adverse action procedures before rejecting based on the report

Ignoring FCRA obligations is one of the most common and expensive hiring pitfalls.

Best Practices To Reduce Risk

To protect your organization and ensure a fair, compliant hiring process:

Create a structured, consistent process for any online screening.
Use a “firewall” between the person viewing online content and the final decision-maker.
Limit reviews to public, job-related information only.
Document your screening approach and maintain it across roles.
Apply the same process to all candidates to avoid disparate treatment.

Disclaimer: This communication is for general informational purposes only and does not constitute legal advice. The summary provided in this alert does not, and cannot, cover in detail what employers need to know about the amendments to the Philadelphia Fair Chance Law or how to incorporate its requirements into their hiring process. No recipient should act or refrain from acting based on any information provided here without advice from a qualified attorney licensed in the applicable jurisdiction.

February 24th, 2026|Compliance Corner, Employment Decisions|

Your Next Hire Is Online. Here’s How to Screen Them Legally.

Social media screening is legal, but only if done right. Here are the essentials.

Federal nondiscrimination laws still apply.
Anything that reveals protected characteristics (race, religion, disability, age, pregnancy, etc.) cannot influence a hiring decision.

Using a third‑party screener? That triggers the FCRA.
Employers must provide a standalone disclosure, get written authorization, and follow pre‑adverse and adverse‑action steps. Accuracy rules also apply and the CFPB is enforcing them more aggressively.

28 states restrict employer access to personal social media.
Most ban requesting login credentials, requiring applicants to log in on the spot and demanding they add HR as a “friend.” In some states, even asking for a username may create risk.

Public vs. private content matters.
Employers may review public posts but accessing private content without permission can violate the federal Stored Communications Act.

NLRA protections apply online.
Employees’ posts about wages or working conditions may be protected concerted activity. Don’t treat them as negative findings.

California adds extra compliance layers.
ICRAA and CCRAA impose stricter disclosures when using third‑party screeners.

Best Practices

Use a consistent, documented process focused ONLY on job‑related behaviors (e.g., threats, fraud, harassment). Keep decision makers away from protected information. Never request access credentials. Stick to public content. And follow the FCRA if a third-party is involved.

Disclaimer: This communication is for general informational purposes only and does not constitute legal advice. The summary provided in this alert does not, and cannot, cover in detail what employers need to know about the amendments to the Philadelphia Fair Chance Law or how to incorporate its requirements into their hiring process. No recipient should act or refrain from acting based on any information provided here without advice from a qualified attorney licensed in the applicable jurisdiction.

February 5th, 2026|Compliance Corner, Employment Decisions|

Bankruptcy Records: Credit Reports Erase Them But Employment Background Checks Find Them

Many people assume that once a bankruptcy drops off their credit report, it disappears everywhere.

Not true. And this difference matters, especially for employers and job seekers.

Credit Reports Follow Standard FCRA Time Limits

Under the Fair Credit Reporting Act (FCRA), national consumer reporting agencies (TransUnion, Experian, Equifax) must remove bankruptcies after specific time periods:

Chapter 7: reportable for up to 10 years
Chapter 13: typically removed after 7 years, sometimes sooner
Once these limits are reached, credit bureaus delete the record entirely, meaning they cannot provide it for any purpose, including employment screening.

Employment Background Checks Work Differently

Employment screening companies are also consumer reporting agencies under the FCRA, but they don’t rely solely on credit bureaus. They frequently pull records directly from the courthouse, which may contain older bankruptcy filings long after the credit bureaus deleted them.

Under the FCRA’s $75,000 salary exception, employment background check companies may report adverse information with no time limit. So if a bankruptcy exists in public court records, it may still appear on an employment background check even though it no longer appears on a credit report.

State Reporting Laws Add Another Layer

Several states have their own rules on how long bankruptcy records may be reported in employment background checks–specifically California, Colorado, Kansas, Maryland, Massachusetts, Montana, New Hampshire, New Mexico, New York, Texas, and Washington. California, for example, prohibits reporting a bankruptcy that is more than 10 years old measured from the date of the relief order, unless a narrow exception applies.

Bottom Line

A bankruptcy “dropping off” your credit report does not guarantee it disappears from employment background checks. Different rules, different timelines.

Disclaimer: This communication is for general informational purposes only and does not constitute legal advice. The summary provided in this alert does not, and cannot, cover in detail what employers need to know about the amendments to the Philadelphia Fair Chance Law or how to incorporate its requirements into their hiring process. No recipient should act or refrain from acting based on any information provided here without advice from a qualified attorney licensed in the applicable jurisdiction.

January 29th, 2026|Compliance Corner, Employment Decisions|

Can Employers Charge Job Applicants for Their Background Check?

When candidates apply for a job, they expect a thorough screening process: interviews, reference checks, and often a formal background check. But can an employer require a job applicant to pay for their own background check?

The answer is more nuanced than a simple yes or no. It depends on state law, federal wage-and-hour rules, and how the background check is conducted.

Federal Law: No Direct Prohibition, but Important Limits

At the federal level, there is no law that explicitly prohibits an employer from requiring applicants to pay for a background check. The Fair Credit Reporting Act (FCRA) regulates how background checks must be conducted but it does not regulate who must pay for the screening.

However, the federal Fair Labor Standards Act (FLSA) does impose limitations once a person becomes an employee. Employers cannot deduct background check costs if doing so would reduce the individual’s pay below the minimum wage for that workweek. While this usually applies to employees, not applicants, it still influences how some states treat pre‑employment expenses.

State Laws: The Deciding Factor

State legislation determines whether an employer can charge job seekers for the cost of a background check. And many states say no. These include: California, Louisiana, Minnesota and Vermont.

In states without specific prohibitions, employers may legally require applicants to pay for background checks as long as the practice does not violate any other wage, consumer protection, or hiring transparency rules.

Should Employers Charge Applicants?

Even in states where charging applicants is legal, many employers avoid it for several reasons:

Competitive Disadvantage

Requiring applicants to pay, especially lower‑wage candidates, may shrink an employer’s talent pool.

Perception and Candidate Experience

Applicants may view the request as unfair or predatory, damaging employer reputation.

Administrative Burden

Collecting fees, issuing reimbursements, and maintaining compliance increases operational complexity.

Equity Concerns

Cost‑shifting disproportionately impacts economically vulnerable job seekers.

For these reasons, most employers see background check costs as part of doing business.

Disclaimer: This communication is for general informational purposes only and does not constitute legal advice. The summary provided in this alert does not, and cannot, cover in detail what employers need to know about the amendments to the Philadelphia Fair Chance Law or how to incorporate its requirements into their hiring process. No recipient should act or refrain from acting based on any information provided here without advice from a qualified attorney licensed in the applicable jurisdiction.

January 15th, 2026|Compliance Corner, Employment Decisions|

New Year, New Rules: Recap of What’s Coming in 2026 in Employment Screening

2026 marks a series of newly enacted laws taking effect across the country. Employers must adapt quickly to ensure compliance and maintain fair hiring practices. Below are the most significant changes taking effect this year.

District of Columbia: Second Chance Law (Effective January 1, 2026)

Automatic sealing of decriminalized offenses (such as pre-2015 marijuana convictions) and various older convictions.
Petition avenues for sealing additional convictions.
Employers are not permitted to access or act on any records sealed under this new law.

Philadelphia: Criminal Record Screening Amendment (Effective January 6, 2026)

Look-back periods cut; only felonies within the past 7 years and misdemeanors within the last 4 years are eligible for consideration, while minor offenses (summaries/infractions) are entirely excluded.
Requires “pre-adverse action notices” over a ten-day candidate response period, and robust documentation, even extending the 90-day protection against adverse action following protected activity.

New York State: Credit-Check Ban (Effective April 18, 2026)

Employers, including staffing firms, cannot request or use any “consumer credit history” for hiring, promotion, compensation, or other employment decisions, unless a statutory exemption applies.
This statewide ban aligns with New York City’s Stop Credit Discrimination in Employment Act (SCDEA), extending similar protections across the entire state.
The expansive definition of “credit history” covers credit reports, scores, credit accounts, and payment histories and, similar to the SCDEA, it likely prohibits searches of public records for bankruptcies, judgments, and tax liens unless an exemption applies.

Washington State: Fair Chance Enhancements (Effective July 1, 2026)

Employers with 15+ employees must wait until “after extending a conditional job offer” to inquire about criminal history; this rule extends to all employers by January 1, 2027.
Arrests, juvenile convictions, and non-conviction adult records are off-limits in hiring decisions. Only relevant adult convictions may be considered and only with a documented legitimate business justification, accompanied by a written notice and at least two business days for a candidate’s response.

Virginia: Clean Slate Law (Effective July 1, 2026)

Numerous misdemeanors and low-level felonies will be “automatically sealed” disappearing from standard background checks.
Employers and screening vendors are expressly barred from reporting or considering such sealed convictions in hiring decisions

San Francisco: Updated Fair Chance Poster

The City and County of San Francisco issued a revised version of its Fair Chance Ordinance (FCO) notice poster, replacing the prior version released in 2023. The updates include changes to official contact information and a Vietnamese-language translation, in addition to English, Spanish, Chinese, and Tagalog. The updated poster can be found here.

Disclaimer: This communication is for general informational purposes only and does not constitute legal advice. The summary provided in this alert does not, and cannot, cover in detail what employers need to know about the amendments to the Philadelphia Fair Chance Law or how to incorporate its requirements into their hiring process. No recipient should act or refrain from acting based on any information provided here without advice from a qualified attorney licensed in the applicable jurisdiction.

January 13th, 2026|Compliance Corner, Employment Decisions|

New NYS Law Restricts Use of Credit History in Employment Decisions

What is this about:

New York State recently enacted S.3072/A.1316, a law that broadly prohibits employers, staffing agencies, labor unions, and their agents from requesting or using “consumer credit history” in employment decisions, covering hiring, firing, promotions, compensation, and other terms of employment unless a narrow statutory exemption applies.

Effective date:

Signed by Governor Hochul on December 19, 2025, the law takes effect on April 18, 2026.

What this means:

Employers cannot use credit history for hiring, firing, promotions, or compensation decisions unless an exemption applies, e.g., legal requirement, public trust roles, access to sensitive systems, or authority to bind contracts over $10,000. Except for these exemptions, any such use is classified as an “unlawful discriminatory practice” under General Business Law § 380-b.

The definition of “consumer credit history” in the new state law mirrors the definition in the New York City Stop Credit Discrimination in Employment Act (SCDEA), and means an individual’s credit worthiness, credit standing, credit capacity or payment history, as indicated by:

a consumer credit report;
credit score; or
information an employer obtains directly from the individual regarding (i) details about credit accounts, including the individual’s number of credit accounts, late or missed payments, charged-off debts, items in collections, credit limit or prior credit report inquiries, or (ii) bankruptcies, judgments or liens.

As in the SCDEA, a “consumer credit report shall include any written or other communication of any information by a consumer reporting agency that bears on a credit capacity or credit history.”

Unlike the SCDEA, the NYS law does not require a written notice to the candidate specifying the exemption under which credit information is obtained. However, employers should maintain internal documentation to justify the exemption.

Why this matters:

This development aligns New York State with similar protections in NYC (since 2015), and places it among eleven states limiting credit checks in employment. Credit histories are frequently inaccurate and disproportionately affect economically vulnerable and minority applicants—this law helps reduce those biases.

Disclaimer: This communication is for general informational purposes only and does not constitute legal advice. The summary provided in this alert does not, and cannot, cover in detail what employers need to know about the amendments to the Philadelphia Fair Chance Law or how to incorporate its requirements into their hiring process. No recipient should act or refrain from acting based on any information provided here without advice from a qualified attorney licensed in the applicable jurisdiction.

January 6th, 2026|Compliance Corner, Employment Decisions|

QC 1000 and Beyond: Elevating Risk Management Through Background Screening

The PCAOB’s QC 1000 standard, effective December 15, 2026, is redefining audit firm quality control. While QC 1000 does not mandate annual background checks on existing clients, leading firms understand that compliance alone is insufficient. In today’s environment of rapid change–management turnover, regulatory scrutiny, global sanctions–risk resilience demands proactive measures.

QC 1000 at a Glance

QC 1000 requires firms to:

Establish quality objectives and identify quality risks.
Implement responses across eight integrated components:
Risk Assessment, Governance & Leadership, Ethics & Independence, Acceptance & Continuance, Engagement Performance, Resources, Information & Communication, Monitoring & Remediation.
Conduct annual internal evaluations and report results via Form QC to the PCAOB.

This structure creates a natural alignment for event-driven and periodic background screening as part of a firm’s quality management system.

Why Due Diligence Is a Strategic Imperative

Emerging Risk Detection: Leadership changes and adverse media can surface overnight.
Regulatory Alignment: Screening supports independence, AML, and anti-corruption compliance.
Reputation Protection: One high-risk client can jeopardize your brand and credibility.
Global Complexity: Cross-border engagements demand proactive monitoring for sanctions and fraud indicators.

Integrating Screening into QC 1000 Components

Risk Assessment: Include client integrity risks in your risk register; define triggers such as executive changes or enforcement actions.
Governance & Leadership: Assign accountable roles and embed screening KPIs into leadership dashboards.
Ethics & Independence: Use screening to identify conflicts or misconduct that could impair independence.
Acceptance & Continuance: Require screening before engagement acceptance and upon triggering events.
Monitoring & Remediation: Track screening outcomes, escalate issues, and feed lessons learned back into your QC system.

The Bottom Line

QC 1000 is more than a compliance requirement–it’s an opportunity to elevate your firm’s risk management strategy. Contact us today to start building a due diligence process customized to your needs.

Disclaimer: This communication is for general informational purposes only and does not constitute legal advice. The summary provided in this alert does not, and cannot, cover in detail what employers need to know about the amendments to the Philadelphia Fair Chance Law or how to incorporate its requirements into their hiring process. No recipient should act or refrain from acting based on any information provided here without advice from a qualified attorney licensed in the applicable jurisdiction.

January 5th, 2026|Compliance Corner, Employment Decisions, Risk Management|

The FCRA Big Three Lawsuit Triggers

Hiring the right talent is critical but one overlooked detail in your background screening process can cost your company millions. Employers often assume background checks are routine, yet the legal landscape tells a different story. The majority of lawsuits tied to employment screening aren’t about discrimination or bad hires—they’re about technical compliance mistakes under the Fair Credit Reporting Act (FCRA). These errors are easy to make and expensive to fix.

Research shows that approximately 73% of FCRA-related lawsuits against employers stem from these three common mistakes:

Non-compliant disclosure forms
Missing or delayed pre-adverse action notices
Inadequate authorization forms

The consequences can be significant: statutory damages of $100–$1,000 per violation, plus attorney fees, with settlements often reaching mid-six to seven figures.

Emerging Risk: Disparate Impact Discrimination

Background check policies and particularly those applying strict pass/fail criteria based on criminal history can unintentionally violate Title VII if they disproportionately impact protected groups. The EEOC has successfully challenged such blanket policies in litigation.

EEOC guidance emphasizes individualized assessments, considering:

The nature of the offense
Time elapsed since the offense
Relevance to the job

Relying on generalized exclusions without job-specific review creates legal risk. Additionally, many state and local laws impose specific requirements for individualized assessments.

Best Practices to Reduce Lawsuit Risk

To minimize exposure from background screening:

Use standalone, plain-language disclosure forms before any check.
Obtain written authorization in a separate form, not embedded in applications.
Follow the adverse action protocol: provide a pre-adverse notice with a copy of the report and summary of rights, and wait at least five business days before issuing the final notice.
Allow candidates to dispute findings.
Implement individualized assessments, especially for criminal record policies.
Regularly audit processes and train HR staff on evolving regulations.

Disclaimer: This communication is for general informational purposes only and does not constitute legal advice. The summary provided in this alert does not, and cannot, cover in detail what employers need to know about the amendments to the Philadelphia Fair Chance Law or how to incorporate its requirements into their hiring process. No recipient should act or refrain from acting based on any information provided here without advice from a qualified attorney licensed in the applicable jurisdiction.

December 23rd, 2025|Compliance Corner, FCRA|

The Illusion of Instant Criminal Checks: Why a True National Criminal Database Still Doesn’t Exist

If you’ve ever been pitched a “national criminal database,” you’ve probably imagined a single, authoritative system that instantly returns every criminal record across the United States. That database doesn’t exist for non‑law‑enforcement users and relying on anything marketed that way can lead to missed records, inaccurate matches, and regulatory headaches.

What actually exists at the national level?

The FBI operates several national systems—NCIC, III, NGI, N‑DEx, and NICS—to support criminal justice operations. These are law‑enforcement systems, with access tightly constrained by federal law and regulation (including 28 C.F.R. § 20.33). Employers generally cannot query NCIC/III directly unless a statute authorizes fingerprint‑based checks for specific roles (e.g., child care, elder care, or other regulated positions) and the check is routed through the state repository per the Compact Council rules.

Even within law enforcement, these systems are indexes and exchanges that depend on state and local repositories to submit arrests and dispositions; coverage and timeliness vary. The DOJ/BJS surveys and FBI guidance repeatedly emphasize gaps and the critical need to report final court dispositions to keep records accurate.

So what are “national criminal databases” sold by private vendors?

Commercial “national” or multi‑jurisdictional files aggregate data from many sources (state repositories where available, departments of corrections, sex offender registries, selected county uploads, watchlists, etc.). They can be useful as a pointer or discovery tool, but they are not comprehensive and often not current enough to stand alone. Coverage varies by jurisdiction and update cadence; name‑match noise creates false positives/negatives, especially with common names.

Industry resources and compliance guidance are consistent on this point: use multi‑jurisdictional databases to broaden the net, then verify at the originating court or repository before reporting or taking action.

Why “database‑only” screening creates risk

Incomplete coverage: Not all courts or states report; updates lag. Recent charges or local misdemeanors may be absent.
Identity ambiguity: Limited identifiers can mis‑match results; aliases and data entry errors compound the problem.
Stale or missing dispositions: Arrests without case outcomes mislead; expungements or dismissals may remain in bulk feeds.
Fair Credit Reporting Act (FCRA) compliance exposure: The FCRA requires “reasonable procedures to assure maximum possible accuracy” and complete, up‑to‑date public record reporting. Database “hits” must be confirmed at the source, and consumers must be notified appropriately when adverse public records are reported for employment decisions.

Regulators have sharpened expectations. In 2024, the Consumer Financial Protection Bureau (CFPB) reiterated that consumer reporting agencies (CRAs) must prevent reporting of duplicate or expunged/sealed items and include disposition information where available. CRAs also must disclose the source(s), both original and any intermediaries, when consumers request their files.

Why this still matters

Despite modernization, data gaps persist—especially in disposition reporting and identity matching. The newest BJS/SEARCH survey shows continued dependence on state repositories and varying automation/completeness across states, reinforcing why source verification and robust procedures remain critical.

Meanwhile, regulators (CFPB/FTC) are raising the bar on “maximum possible accuracy.” Organizations that rely on “instant database” products without verification risk adverse action mistakes, consumer disputes, and enforcement exposure.

Disclaimer: This communication is for general informational purposes only and does not constitute legal advice. The summary provided in this alert does not, and cannot, cover in detail what employers need to know about the amendments to the Philadelphia Fair Chance Law or how to incorporate its requirements into their hiring process. No recipient should act or refrain from acting based on any information provided here without advice from a qualified attorney licensed in the applicable jurisdiction.

December 12th, 2025|Compliance Corner, FCRA|