Salon owners who conduct background checks on job applicants and employees must comply with the Fair Credit Reporting Act, state background check laws, and local ban-the-box ordinances. These laws regulate when background checks may be conducted, what information may be considered, how adverse action based on background check results must be handled, and what disclosures and authorizations are required. Violations of background check requirements expose salon owners to statutory damages, class action liability, and regulatory enforcement. This guide covers background check compliance for salon businesses.
Many salon owners conduct background checks as a standard part of the hiring process but fail to follow the legally required procedures. The FCRA imposes strict requirements on any employer that uses a consumer reporting agency to obtain background check information. These requirements include providing specific disclosures to the applicant, obtaining written authorization, following a multi-step adverse action process, and providing a copy of the report before taking adverse action.
The adverse action process under the FCRA is particularly complex. If an employer intends to deny employment based wholly or partly on information in a background check, the employer must first provide the applicant with a pre-adverse action notice that includes a copy of the report and a summary of rights. The employer must then wait a reasonable period, typically five business days, before taking the adverse action. After taking the adverse action, the employer must provide a post-adverse action notice informing the applicant of their rights.
Ban-the-box laws, enacted in many states and cities, restrict when during the hiring process an employer may inquire about criminal history. These laws typically prohibit criminal history questions on job applications and defer background check inquiries until after a conditional offer of employment. Some ban-the-box laws also require individualized assessment of criminal records, considering factors such as the nature of the offense, the time elapsed, and the relevance to the position.
State background check laws add additional requirements. Some states restrict the types of criminal records that may be considered, such as prohibiting the use of arrest records that did not result in conviction or limiting the lookback period for convictions. Some states restrict or prohibit credit checks for positions that do not involve financial responsibilities.
For salon employers, these regulations mean that a seemingly simple decision to run a background check on a job applicant involves multiple legal requirements at the federal, state, and local levels. Each step of the process, from authorization to adverse action, must follow specific procedures.
Background check requirements come from the FCRA, state consumer reporting laws, state criminal history laws, and local ban-the-box ordinances.
FCRA disclosure and authorization requirements mandate that employers provide a standalone written disclosure to the applicant that a background check may be obtained. The disclosure must be in a separate document, not embedded in the job application. The applicant must provide written authorization before the check is conducted.
FCRA adverse action requirements mandate a two-step process. Before taking adverse action, the employer must provide the applicant with a pre-adverse action notice, a copy of the consumer report, and a copy of the FTC summary of consumer rights. After taking adverse action, the employer must provide a post-adverse action notice including the name and address of the consumer reporting agency, a statement that the agency did not make the decision, and notice of the applicant's right to dispute the report.
Ban-the-box requirements in applicable jurisdictions prohibit employers from asking about criminal history on job applications and delay criminal history inquiries until a specified point in the hiring process, typically after a conditional offer. Some laws require individualized assessment of criminal records and prohibit blanket disqualification based on criminal history.
State-specific restrictions may limit the categories of records that may be considered, restrict the lookback period for criminal convictions, prohibit consideration of arrests without convictions, restrict credit checks, and impose specific notice requirements.
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Review your current background check process against FCRA requirements. Verify that you provide a standalone disclosure to applicants before conducting checks. Confirm that you obtain written authorization. Check whether your job application includes criminal history questions and whether your jurisdiction has ban-the-box requirements. Review your adverse action process to ensure it follows the two-step procedure. If you use a consumer reporting agency, verify that they comply with FCRA requirements.
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Try it free →Step 1: Determine Legal Requirements
Research all applicable federal, state, and local background check laws. Identify FCRA requirements, state consumer reporting laws, ban-the-box ordinances, and any restrictions on the types of information that may be considered.
Step 2: Update Job Applications
Remove criminal history questions from your job application if required by applicable ban-the-box law. If your jurisdiction does not have ban-the-box requirements, you may include criminal history questions but should add language indicating that a conviction does not automatically disqualify an applicant.
Step 3: Prepare Required Documents
Create a standalone disclosure form that informs applicants that a background check may be obtained. Prepare an authorization form for the applicant's signature. Develop pre-adverse action and post-adverse action notice templates. Include the FTC summary of consumer rights with your pre-adverse action package.
Step 4: Follow Proper Sequence
Conduct background checks only after providing the disclosure and obtaining authorization. Time the check appropriately under any applicable ban-the-box requirements. If the results will affect an employment decision, follow the two-step adverse action process before and after taking action.
Step 5: Conduct Individualized Assessment
When background check results reveal criminal history, conduct an individualized assessment before making an employment decision. Consider the nature and gravity of the offense, the time elapsed since the offense, and the relevance of the offense to the position. Document the assessment and the factors considered.
Step 6: Maintain Records
Retain all background check disclosures, authorizations, reports, and adverse action notices for the period required by law, typically five years. Store these documents securely and confidentially, separate from general personnel files. Restrict access to authorized personnel.
Blanket disqualification based on any criminal record violates EEOC guidance and may violate state or local law. The EEOC has stated that arrest and conviction records are not reliable indicators of job performance and that blanket exclusion policies disproportionately affect certain racial groups. Instead, employers should conduct an individualized assessment considering the nature of the offense, the time elapsed, and the relevance to the specific position. Some jurisdictions explicitly require individualized assessment by law. Convictions directly related to salon work, such as assault or theft, may be more relevant than unrelated offenses. Document your individualized assessment and the legitimate business reason for any decision to deny employment based on criminal history.
The pre-adverse action notice is provided before the employer makes a final decision to deny employment or take adverse action based on background check information. It must include a copy of the background check report and a copy of the FTC summary of consumer rights under the FCRA. The purpose is to give the applicant an opportunity to review the report, identify any errors, and provide additional context before the final decision is made. The employer must wait a reasonable period, typically five business days, before proceeding. The post-adverse action notice is provided after the final decision is made. It must include the name and contact information of the consumer reporting agency, a statement that the agency did not make the employment decision, and notice that the applicant has the right to obtain a free copy of the report and to dispute its accuracy.
The FCRA applies specifically when an employer uses a consumer reporting agency to obtain a consumer report. If you personally search publicly available social media, you are not using a consumer reporting agency and the FCRA technically does not apply. However, several important cautions apply. Viewing social media may reveal protected characteristics such as race, religion, national origin, disability, age, and pregnancy status. If you then make an employment decision that adversely affects the applicant, you may face claims that the decision was motivated by knowledge of a protected characteristic. Some states have social media privacy laws that prohibit employers from requiring access to private social media accounts or from taking adverse action based on social media content. The safest practice is to have someone not involved in the hiring decision review social media for job-relevant information and report only non-protected information to the decision maker.
Compliant background check procedures protect your salon from legal liability while supporting safe hiring. Evaluate your salon's hiring practices with the free hygiene assessment tool and strengthen your screening procedures using this guide. For comprehensive salon compliance management, visit MmowW Shampoo. 安全で、愛される。 Loved for Safety.
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