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2026 Mid-Year Recap: Key Developments in Employment Background Screening

As we pass the midpoint of 2026, background screening compliance remains one of the most dynamic landscapes for Human Resources and employment law. State legislatures and local city councils are aggressively enacting applicant protections, changing how employers evaluate everything from criminal histories and consumer credit to drug testing and remote identity verification. Below is recap of the major state, local, and federal employment background screening developments that have taken effect in 2026 to date.

  1. Fair Chance & Local “Ban the Box” Mandates

Fifteen states, along with the District of Columbia and 21 localities have enacted Ban-the-Box laws, delaying criminal inquiries until after conditional offers while restricting specific categories of conviction data. Several have expanded their requirements in 2026:

  • San Francisco Fair Chance Ordinance (FCO) Amendments (Effective August 10, 2026):
  • Out-of-State Offense Protections: Explicitly bars employers from considering out-of-state convictions or arrests for conduct that is lawful in California (such as reproductive healthcare, gender-affirming care, and related care activities).
  • Tightened Timelines: Employers must acknowledge receipt of mitigating evidence submitted after a pre-adverse action notice within 14 days, and final adverse action decisions must be issued within 30 days.
  • Washington State (HB 1747 – Effective July 1, 2026): Implemented strict statewide Fair Chance mandates for employers with 15+ employees. Criminal convictions inquiries must be delayed until post-offer, non-conviction arrests and juvenile records are completely excluded, written individualized assessments are mandatory, and pre-adverse action review holds must last at least two business days.
  • Philadelphia (Effective January 6, 2026): Updated its Fair Chance Hiring law, shortening the permissible misdemeanor lookback period from seven years to four years and banning the consideration of summary offenses.
  1. Expansion of “Clean Slate” Automatic Record Sealing

Employers are prohibited from using automatically sealed or expunged records in adverse employment decisions even if a legacy database accidentally surfaces them. Fourteen states now operate active automated court record-sealing systems. The 2026 jurisdictions are as follows:

  • District of Columbia (Ramp-up Effective January 2026): Enacted its Second Chance Act, restricting early criminal history disclosures and mandating automatic expungements for minor and decriminalized offenses.
  • Virginia (Effective July 2026): Officially launched its automated Clean Slate court system to automatically seal qualifying low-level misdemeanors and non-violent offenses after statutory waiting periods.
  • New York Clean Slate Implementation: State court systems continue expanding the automated sealing of qualifying records (3 years for misdemeanors, 8 years for eligible felonies).
  1. Credit Check Restrictions

One of the most consequential shifts in employment background screening occurred this spring, further restricting the use of credit history in employment decisions:

  • New York State Employment-Purpose Credit Ban (Effective April 18, 2026): New York State expanded New York City’s long-standing Stop Credit Discrimination in Employment Act to cover all employers statewide. The law prohibits employers from requesting, using, or evaluating a candidate’s consumer credit history for hiring, compensation, or promotional decisions unless an exemption applies (positions that legally require credit checks, law enforcement/security clearance positions, or high-level fiduciary roles with direct signatory authority over significant financial assets).
  1. State Workplace Drug Testing Resets

Twenty-four states offer some protections against marijuana-related adverse employment decisions. Effective July 29, 2026, for reasonable suspicion testing, Maine now requires written documentation of specific “observable behaviors” prior to testing, and all employer testing policies must be pre-approved by the Maine Department of Labor.

  1. Form I-9 Enforcement & Remote Verification

Federal immigration authorities updated Form I-9 inspection and audit protocols early in the year, applying stricter financial penalties for procedural errors previously treated as minor technical violations. To combat identity fraud in remote hiring workflows, employers are increasingly pairing E-Verify protocols with automated digital document and biometric validation.

The Trend

The overarching trend is that background screening compliance is becoming increasingly local. Fair Chance laws, Clean Slate initiatives, individualized assessment requirements, record-sealing statutes, and drug testing regulations vary substantially by jurisdiction. For employers operating nationally, the greatest compliance risk often stems not from federal law, but from failing to adapt screening practices to state and municipal requirements.

 

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.

August 11th, 2026|Categories: Compliance Corner for Employment Decisions|Tags: , , , , , , , , , |

Arrest Records and Remote Staff: What Employers Need to Know After Saberin v. Alation

On July 30, 2026, the California Court of Appeal issued its decision in Saberin v. Alation, Inc., addressing an important question for employers navigating today’s remote workforce: Does California’s “no-arrest-record” statute, Labor Code section 432.7, protect employees who work remotely outside of California? The court concluded that, under the circumstances presented, the statute did not apply.

Case Background

Under California Labor Code Section 432.7, employers are generally prohibited from considering arrest records that did not lead to a conviction when making employment decisions like hiring or termination.

In Saberin, the plaintiff was a Utah-based remote engineer for a California-headquartered software firm. While on vacation in Florida, he was arrested but the charges were dismissed. After learning of the arrest, the company terminated his employment. The employee filed suit, arguing the termination violated California’s arrest record protections.

The Court’s Ruling

The Court of Appeal affirmed an arbitration award in favor of the employer, holding that California’s statutory protections did not apply. The court emphasized the longstanding presumption against the extraterritorial application of California labor laws, noting that:

  • The employee lived and performed all work in Utah.
  • The arrest took place in Florida.
  • The termination decision was made by managers located outside of California.

The court reaffirmed that an employer’s corporate headquarters in California is not enough on its own to extend California employment protections to out-of-state remote workers.

Key Takeaways for Employers

Saberin was ultimately a victory for the employer, but the decision may be equally notable for what it leaves open. The Court of Appeal did not reject the possibility that Labor Code section 432.7 could apply to an out-of-state remote employee. Rather, it concluded that the necessary California connections were missing in this case. Employers should therefore focus not only on where their employees work, but also on where critical employment decisions are made.

 

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.

August 4th, 2026|Categories: Compliance Corner for Employment Decisions|Tags: , , , |

California AB 2095: Refining the “Fair Chance” Process

California’s hiring landscape is known for its complexity, and Assembly Bill 2095 (AB 2095) looks to add another layer of precision. As a proposed update to the state’s existing Fair Chance Act, this bill aims to tighten the “ban-the-box” rules, ensuring that criminal history is only considered when it is directly relevant to the position. 

What AB 2095 Would Change

While current laws already restrict when employers can ask about criminal history, AB 2095 focuses on the how. The goal is to eliminate indirect pressure on applicants to disclose their past before a formal assessment is made.

Under the bill, covered employers would be prohibited from:

  • Requesting consent for a conviction history background check before providing applicants with a written description of the specific job duties for which a conviction could be disqualifying.
  • Initiating a conviction history check before that job‑duty information is provided.
  • Requiring applicants to pay for any conviction history background check.
  • Requiring applicants, before or after a conditional offer, to disclose convictions or provide documentation related to convictions or rehabilitation.

Compliance Steps

If passed, AB 2095 would require employers to be more deliberate and transparent before any criminal history screening occurs. This includes:

  • Updating offer letters, disclosures, and authorization forms to ensure proper sequencing and content;
  • Confirming that job‑specific risk and duty information is clearly documented and provided to applicants before requesting screening consent; and
  • Coordinating closely with background screening vendors, particularly where vendors host or manage employer forms.

Failure to align hiring practices with AB 2095 requirements could increase exposure to discrimination claims under California’s civil rights laws.

 

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.

April 14th, 2026|Categories: Compliance Corner for Employment Decisions|Tags: , , , , |

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|Categories: Compliance Corner for Employment Decisions|Tags: , , |

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|Categories: Compliance Corner for Employment Decisions|Tags: , , , , , , , , , , , , |

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|Categories: Compliance Corner for Employment Decisions|Tags: , , , , , , |

California Consumer Privacy Act (CCPA) and Employment Background Screening

Key Points:

  1. Limited Applicability Due to AB 25

Initially, the CCPA broadly defined “consumer” to include job applicants and employees. However, Assembly Bill 25 (AB 25) amended the CCPA to temporarily exclude personal information collected from job applicants, employees, and independent contractors from most CCPA provisions.

This exclusion was in effect until January 1, 2023, after which some CCPA rights were extended to employees and job applicants. As of now, employers must comply with the following CCPA provisions when using background screening services:

  • Notice at collection–employers must inform applicants about:
  • What personal data is being collected (e.g., criminal history, credit data, identifiers)
  • The purpose of data collection (e.g., hiring decisions)
  • Data security obligations:
    Employers must implement reasonable security measures to protect personal data. If a breach occurs due to negligence, affected individuals may sue for statutory damages.
  1. Overlap with Other Laws

Employers in California must also comply with:

  • Fair Credit Reporting Act (FCRA)
  • Investigative Consumer Reporting Agencies Act (ICRAA)
  • Consumer Credit Reporting Agencies Act (CCRAA)

These laws govern how background checks are conducted, what disclosures are required, and how adverse actions must be handled.

 

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.

October 27th, 2025|Categories: Compliance Corner for Employment Decisions|Tags: , , , |

When Headlines Hit Home: Navigating Conflicting Laws on Pending Arrests in California Employment

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Your employee just made the news—hauled away in handcuffs for allegedly punching an elderly man. The incident is unsettling, and your leadership team is asking: Can we terminate him?

If your company is headquartered in Ventura County, but the employee works remotely from his home in the City of Los Angeles, the answer isn’t simple. You’re now facing a legal maze involving California state law, a Los Angeles municipal ordinance, and jurisdictional nuances tied to remote work.

California Law: Arrest ≠ Grounds for Termination

Under California Labor Code § 432.7, employers are prohibited from using arrest records that did not result in a conviction when making employment decisions. This includes pending charges. Although you may be aware of the arrest, you cannot terminate or discipline the employee solely based on it. However, California law does allow employers to:

  • Conduct an independent investigation into the alleged misconduct.
  • Take action based on a good-faith belief that the employee engaged in behavior that violates company policy or poses a risk.

Los Angeles Ordinance: Even Stricter Rules

The City of Los Angeles Fair Chance Initiative for Hiring Ordinance (FCIHO) goes further. It prohibits employers from considering a candidate’s criminal history, including pending arrests, until after a conditional offer of employment has been made. Even then, employers must:

  • Conduct an individualized assessment.
  • Provide written notice before taking adverse action.
  • Allow the employee to respond with mitigating information.

Because your employee works remotely from Los Angeles, these local protections apply, even if your company is based elsewhere.

Jurisdictional Conflict: Who Has Authority?

In employment law, the location where the employee performs work typically determines which laws apply. So, although your company is in Ventura County, the employee’s residence and work location in Los Angeles means:

  • Los Angeles municipal law applies.
  • California state law applies.
  • You must comply with both.

What Employers Should Do

Here’s how to respond:

  1. Pause and Assess
    Review all applicable laws and ordinances.
  2. Conduct a Neutral Investigation
    Gather facts, interview witnesses, and document findings. Focus on workplace impact, not the arrest itself.
  3. Consult Legal Counsel
    Jurisdictional conflicts are complex. Legal guidance is essential.
  4. Review Remote Work Agreements
    Ensure that contracts specify the applicable jurisdiction and clearly outline expectations.
  5. Follow the Fair Chance Process
    When considering a candidate’s criminal history in an employment decision, comply with both state and local requirements.

Final Thoughts

In today’s remote work environment, jurisdiction matters more than ever. Employers must navigate a patchwork of laws and ordinances that vary by city, county, and state. When an employee’s conduct raises red flags, the legal response must be measured, compliant, and well-documented. If you’re unsure how to proceed, seek legal guidance before making any employment decisions. The cost of getting it wrong could be far greater than the headline itself.

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September 11th, 2025|Categories: Compliance Corner for Employment Decisions|Tags: , |

New California Law Prohibits Employers from Telling Applicants That a Driver’s License Is Required for a Job Unless the Position Meets a Two-Part Test

What is this about?
On September 28, 2024, Governor Newsom signed Senate Bill (SB) 1100 to amend California’s Fair Employment & Housing Act (FEHA), making it an unlawful employment practice for an employer to include a statement in a job advertisement, posting, application, or other material that an applicant “must have” a driver’s license unless the employer “reasonably” anticipates driving as an essential job function that cannot be comparably performed by alternative means.

Effective Date:
The law becomes effective on January 1, 2025, as an amendment to Section 12940 of the Government Code.

Who must comply:
The new law applies to employers who regularly employ one or more persons or regularly receive the services of one or more persons providing services under a contract or any person acting as an agent of an employer, directly or indirectly, the state or any political or civil subdivision of the state, and cities.

Employer Obligations:

Starting January 1, 2025, employers must meet a two-part test before including a statement in a job advertisement, posting, application, or other material stating that an applicant must have a driver’s license:

  1. The employer must reasonably expect driving to be one of the job functions for the position, and
  2. The employer must reasonably believe that satisfying the job function using an alternative form of transportation (such as ride-hailing, taxi, carpooling, bicycling, or walking) would not be comparable in travel time or cost to the business

Why compliance matters:
Like other unlawful employment practices prohibited under the FEHA, employers who violate the new law could face an injunction or declaratory relief (such as being required to hire the applicant) or be held liable for compensatory damages, punitive damages, attorney’s fees, and costs.

What SI is doing:
To help ensure compliance with the new California license law, SI will modify its materials for California employers and applicants to indicate that providing driver’s license information is voluntary, not mandatory—unless the employer informs SI that the job position meets the new law’s two-part test

Employer Considerations:
If a job position does not require a driver’s license, employers may want to consider excluding a motor vehicle record from the background check.

December 26th, 2024|Categories: Compliance Corner for Employment Decisions|Tags: |

LA County Fair Chance Ordinance becomes operational September 3, 2024


What is this about?
On February 27, 2024, the County of Los Angeles Board of Supervisors voted to adopt the County’s Fair Chance Ordinance for Employers (FCO). The FCO aligns with the California Fair Chance Act (FCA), also known as “Ban the Box.” However, it adds several compliance requirements when considering the applicant’s criminal record history to make an employment decision.

Effective Date:The FCO is operative on September 3, 2024.

Who must comply:
The FCO applies to any “employer” located or doing business in the unincorporated areas of Los Angeles County who employs five or more employees regardless of location. The FCO protects both applicants seeking employment and employees seeking promotions, as well as others seeking non-traditional employment, such as contract or freelance work.

New requirements:
Notice of Intent to Conduct Background Check.
This notice must be given along with any conditional offer of employment to the applicant or employee that states (1) the conditional offer is contingent upon a review of a criminal record history and (2) the employer has good cause to conduct the criminal history review “for the specific job position with supporting justification in writing.” It is not enough for the employer to merely state it reviews such information because of a generalized “safety concern.” Specific information is required.

Before employers can take any adverse action against an individual, such as rescinding a conditional job offer, the FCO requires the employer to (1) prepare a written individualized assessment of an applicant’s criminal history in the manner required by the FCO; (2) provide a form of preliminary notice of adverse action with mandatory content; (3) provide a second written individualized assessment if the individual provides information in response to the preliminary notice of adverse action; and (4) provide a final notice of adverse action if the employer makes a final decision to withdraw the conditional offer of employment or take any other adverse action (the final notice must also include mandatory content).

Why compliance matters:
The FCO authorizes public and private remedies, including civil claims. The County of Los Angeles Department of Consumer and Business Affairs (DCBA) is authorized to take appropriate steps to enforce the FCO and conduct investigations of possible violations by an employer. The DCBA may issue monetary penalties of up to $5,000 for the first violation, up to $10,000 for the second violation, and up to $20,000 for the third and subsequent violations.

How SI can help:
SI can help ensure compliance in several ways, including the timing of background checks, the distribution of mandatory and sample notices, and the monitoring of the required time periods for taking adverse action.

August 29th, 2024|Categories: Compliance Corner for Employment Decisions|Tags: , , , |
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