Key Guidance for Employers: Background Checks & EEOC Compliance (2026 Update)
Background screening remains one of the most important risk-management tools available to employers. When done correctly, it protects your workplace, your customers, and your brand. When done incorrectly, it can create significant legal exposure.
In 2026, enforcement around fair hiring practices continues to intensify. The U.S. Equal Employment Opportunity Commission (EEOC) maintains that employers may conduct background checks—but they cannot use that information in a way that results in discrimination, whether intentional or not.
This guide breaks down what employers need to know right now to stay compliant and confident.
Why Background Checks Still Matter
Used properly, background screening:
- Promotes workplace safety
- Reduces liability and negligent hiring risk
- Protects customers, patients, and vulnerable populations
- Safeguards company reputation
- Supports informed hiring and promotion decisions
However, background checks must be job-related, consistent, and compliant with both federal and state law.
Who Is Considered an “Employee” Under Federal Law?
Under federal employment discrimination statutes, an employee includes:
- Full-time workers
- Part-time workers
- Seasonal employees
- Temporary employees
- Individuals placed through work programs
- Volunteers (in certain contexts)
If someone performs work for your organization, discrimination protections may apply.
Protected Classes Under Federal Law
Federal law prohibits discrimination based on:
- Race
- Color
- Religion
- Sex
- National Origin
- Age (40+)
- Disability
- Genetic Information
Individuals are also protected from retaliation for filing discrimination complaints.
⚠️ Important: Discrimination can occur even if it is unintentional. A neutral policy that disproportionately impacts a protected group may still create liability.
Do EEOC Laws Apply to Your Organization?
Coverage depends on your employee count:
1 Employee
- Must provide equal pay for equal work (male and female employees).
15–19 Employees
- Prohibited from discrimination based on race, color, religion, sex, national origin, disability, and genetic information.
- Must comply with equal pay laws.
20+ Employees
- Prohibited from discrimination based on age (40+), race, color, religion, sex, national origin, disability, and genetic information.
- Must comply with equal pay laws.
Even smaller employers should adopt compliant practices to reduce risk and future exposure.
2026 Compliance Focus: Individualized Assessment
The EEOC continues to emphasize individualized assessment when considering criminal history.
Employers should evaluate:
- The nature and gravity of the offense
- The time that has passed
- The nature of the job
Blanket policies like “no felons allowed” are legally risky.
Instead, employers should document how a conviction relates directly to job duties. For example:
- A recent embezzlement conviction may be relevant for a CFO role.
- A decades-old minor drug offense may not be relevant for a warehouse position.
Position-Specific Screening: One Size Does NOT Fit All
Background checks should be based on the position, not the individual.
Examples:
- A sex offender registry search may be appropriate for a church volunteer or childcare worker.
- A medical sanctions search is relevant for a nurse or healthcare provider.
- A motor vehicle report (MVR) is appropriate for delivery drivers.
✅ The key rule:
Run the same screening package for all applicants applying for the same role.
Alias Name Searches & Gender Neutral Practices
If you conduct alias searches for women due to possible maiden names, you must conduct alias searches for men as well.
Inconsistent application of screening tools can create discrimination claims.
The Adverse Action Process (FCRA Compliance)
When a background report may lead to denying employment, the Fair Credit Reporting Act (FCRA) requires a structured process.
The goals of adverse action are to:
- Inform the applicant of their rights
- Notify them that a decision may be based on a consumer report
- Allow them time to dispute inaccuracies
The 3 Required Stages
-
Pre-Adverse Action Notice
- Provide a copy of the report
- Include Summary of Rights
-
Waiting Period
- Typically 5 business days (varies by policy/state)
-
Final Adverse Action Notice
- Confirm the employment decision
- Provide required reporting agency contact information
Failure to follow these steps is one of the most common—and expensive—compliance mistakes employers make.
2026 Trends Employers Should Watch
Ban-the-Box Expansion
Many states and municipalities continue to expand fair-chance hiring laws that limit when criminal history can be considered.
Pay Transparency Laws
While not directly related to background checks, pay equity enforcement intersects with discrimination risk.
AI in Hiring
Automated decision-making tools are receiving increased scrutiny. Employers must ensure screening tools do not create disparate impact.
State-Level Reporting Restrictions
Several states now limit reporting of:
- Older non-convictions
- Certain marijuana offenses
- Sealed or expunged records
Compliance is no longer just federal—it’s local.
Best Practices for Employers in 2026
✔ Develop job-specific screening packages
✔ Apply screening consistently across candidates
✔ Conduct individualized assessments
✔ Document your reasoning
✔ Follow the full adverse action process
✔ Audit your screening provider annually
✔ Consult experienced employment counsel
Final Thoughts
Background screening is essential—but compliance is critical.
Employers must balance safety and fairness. The goal is not just to gather data, but to use it responsibly and legally.
If you are unsure whether your background screening process aligns with current EEOC and FCRA expectations, review your policies now. Regulatory scrutiny is increasing—not decreasing.
Disclaimer
This publication is intended for informational purposes only. It is not comprehensive and does not constitute legal advice. Employers should consult qualified legal counsel regarding specific employment, compliance, and background screening matters.
Blaine is the Co-Founder and COO of Western Verify, and spends his free time hosting parties or traveling with his amazing family.
