Background Check Best Practices for Employers

A background check is a risk control on both sides. Skip it, or do it carelessly, and you can end up with a hire who harms a customer, a coworker or your property, and a negligent-hiring allegation on top. Run it badly, and the check itself becomes the claim: federal and Washington laws regulate how employers request, use and act on background information, and mistakes in the process are a recurring source of employment litigation. This guide covers a practical, compliant process for Washington employers, including the amended Fair Chance Act that took effect in 2026.

Start with a written screening policy

Consistency is your best defense. Federal equal employment law requires employers to apply background requirements the same way regardless of race, national origin, color, sex or other protected characteristics. A neutral policy can still be unlawful if it disproportionately screens out a protected group and is not job-related and consistent with business necessity. A written policy forces those decisions to be made once, deliberately, rather than case by case.

• Define checks by position, not by person. A driver, a bookkeeper and a warehouse associate may warrant different checks. Write down which checks apply to which roles, and why.
• Tie each check to a job risk. Motor vehicle records for drivers; financial history only where the role handles money and the law allows it; verification of licenses for licensed trades.
• Set the timing. In Washington, criminal history inquiries now come after a conditional offer (see below).
• Name a decision-maker. One trained person or small group should review results and document decisions.
• Secure and limit access. Keep reports separate from personnel files and restrict who can see them.

Follow the FCRA steps when you use a screening company

When you buy a background report from a consumer reporting agency, the federal Fair Credit Reporting Act (FCRA) applies. The core steps:

The standalone disclosure rule trips up many employers. In Walker v. Fred Meyer (2020), the Ninth Circuit, whose rulings apply in Washington, held that the disclosure may not include extraneous information, though a concise explanation of what a consumer report for employment purposes means is allowed. Do not bury the disclosure in an application, add liability waivers to it, or combine it with state notices unless your counsel has approved the format.

Washington's own consumer reporting statute adds requirements. Before taking adverse action based on a report, the employer must give the person the agency's name, address and telephone number, a description of their rights, and a reasonable opportunity to respond to disputed information.

Washington's amended Fair Chance Act

Washington's 2025 amendments to the Fair Chance Act took effect July 1, 2026 for employers with 15 or more employees, and apply to employers with fewer than 15 employees starting January 1, 2027. Key rules:

• No criminal history questions before a conditional offer. Employers may not seek information about an applicant's criminal record, or reject someone for not disclosing it, before a conditional offer of employment.
• No exclusionary ads or blanket bans. Job postings may not use language such as "no felons," and employers may not categorically exclude people with criminal records, including through informal screening.
• Limits on what you may rely on. Arrest records and juvenile records may not be the basis for a tangible adverse action, with a narrow exception for an adult arrest where the person is currently out on bail.
• A documented individualized assessment. Adverse action based on an adult conviction needs a legitimate business reason, and the employer must consider and document factors including the seriousness of the conduct, the number and types of convictions, time elapsed since conviction (excluding incarceration), verifiable rehabilitation, education and work history, and the duties of the position and the place and manner in which it is performed.
• Notice and a pause. Employers must give a written notice summarizing the law with a copy of the Attorney General's guide when they say a post-offer background check will be required, or when an applicant volunteers criminal history in an interview. Before adverse action, the employer must share the record relied on and hold the position open at least two business days after the pre-adverse notice. Where the FCRA also applies, allowing five business days is a common practice that satisfies both.

Some positions and employers are exempt, including jobs with unsupervised access to children under 18 or other vulnerable individuals as defined by law, law enforcement and criminal justice agencies, and hiring under federal contracts that specifically bar people with criminal records. Some cities have their own fair chance rules as well; check local requirements where you hire.

Credit checks and driver screening

Credit history

In Washington, an employer may not obtain a consumer report containing credit information for employment purposes unless the information is substantially job related and the employer's reasons are disclosed to the person in writing, or the check is required by law. Reserve credit checks for roles where financial responsibility is genuinely part of the job, and record the reason.

Commercial drivers

Motor carriers have additional, mandatory steps for drivers regulated by the FMCSA:

• Driving record. Within 30 days of the driver's start date, request the record from each state where the driver held a license or permit in the prior three years.
• Prior employers. Investigate the driver's safety performance history with DOT-regulated employers over the preceding three years, and keep the responses (or your documented good-faith efforts) in the file.
• Clearinghouse. Run a pre-employment full query of the Drug and Alcohol Clearinghouse before the driver performs safety-sensitive work, and query every covered driver at least once a year.

For the full checklist, see our guides to driver hiring and screening and driver qualification files.

Make decisions you can defend

Most disputes arise not from what the report said but from how the decision was made. A short, repeatable decision process helps:

1. Confirm the report is about the right person and verify anything that looks wrong before relying on it.
2. Compare the finding to the specific duties of the job, not to a general sense of risk.
3. Complete and keep the individualized assessment where Washington law requires it.
4. Send pre-adverse notices, wait the required period, and consider anything the applicant provides.
5. Send the final notice and keep a record of what was decided, by whom and why.

Training matters as much as forms. Hiring managers who ask about criminal history in an interview, or reject an applicant informally after a conversation, can create exposure even when the written process is perfect. Our HR compliance resources cover manager training and policy reviews.

Where insurance fits

Screening reduces risk; it does not eliminate it. Several coverages typically come into play, and wording varies by carrier and policy:

When to call a broker

Call us before you change your hiring process for the new Washington rules, if you are adding drivers or positions that handle money, or if you have received a demand letter about a hiring decision. As a broker, we can review how your EPLI, liability and crime coverage would respond and introduce you to resources for policy and form reviews. Coverage depends on the facts of each claim and the terms of your policy.

Sources

• U.S. EEOC — Background checks: what job applicants and employees should know
• U.S. Court of Appeals for the Ninth Circuit — Walker v. Fred Meyer, Inc. (2020)
• Washington State Legislature — RCW 19.182.020
• Morgan Lewis — Washington AG publishes Fair Chance Act employer guide as amended law takes effect
• Summit Law Group — Washington's amended Fair Chance Act is live
• eCFR via Cornell LII — 49 CFR 391.23, Investigation and inquiries
• eCFR via Cornell LII — 49 CFR 382.701, Drug and Alcohol Clearinghouse queries