Reviewing the 7-Year Lookback Rule in Employment Background Checks
Criminal background checks are an important part of the hiring process for most companies. However, there are some limits to the information that these background checks can report under the law. One such example is the “7-Year Lookback Rule”, which limits the information that consumer reporting agencies can list on background checks.
The Fair Credit Reporting Act (FCRA) states that most types of negative information about a person must be removed from their consumer report or background check after a period of seven years.
The exceptions are Chapter 7 bankruptcies (which can remain on the report for ten years), criminal convictions, and bank liens (which are removed seven years after they are paid off instead of counting from their start date).
It is important to note that this element of the FCRA only applies to jobs that pay less than $75,000 per year. The law also restricts other types of information from being listed on the report at all for positions under that salary threshold, including arrests for charges that were later dropped or otherwise did not result in a conviction and civil lawsuits or judgments.
The other major exception to the 7-Year Lookback Rule is the information used for verification, such as employment, licensing, and educational histories. This information is generally positive for the applicant, as it verifies their claims of having attained the appropriate licenses and education required for the position. That’s why this information is still permitted under a consumer privacy protection act like the FCRA.
It’s of upmost importance that employers exercise caution and stay vigilant regarding specific state exceptions that could significantly impact the reporting and utilization of information obtained during background checks. State laws can vary widely, imposing restrictions or additional requirements on the information employers are allowed to consider.
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