Ohio’s Background Check Laws and What You Need to Know
Employers all across the nation, including Ohio, routinely conduct background checks as part of their hiring process. For employers, background checks help identify issues with potential employees that may affect the company. State and federal laws impose a patchwork of rules and regulations on usage of background checks, so it’s important for employers and job applicants to understand these laws and how they apply. The following section outlines and explains Ohio employment background check laws in detail.
Ohio’s background check statute is Ohio Revised Code § 2953.32, titled "Use by employers of background checks in hiring or promotion decisions." The law requires an employer to provide a "written notice" to an applicant or employee at the time of application or after receipt by the employer of a background check report, whichever is later, that informs the person of the background check report:
- (1) The type or types of information that the employer may obtain or has obtained;
- (2) The purpose for which the background check report may be used;
- (3) That the background check report may be used only for the permitted purpose or purposes;
- (4) That, after 2018, the background check report is based on name-based checks only of state and federal law enforcement databases, any databases established by private vendors used by the state, counties and municipalities , databases established by a public or private third party that compiles information prepared by a government agency, databases established by private nonprofit organizations that gather information about the criminal records of persons upon application for membership or participation in programs provided by those organizations, and information provided to the employer by a governmental authority that prepared the information;
- (5) Whether the employer is required or authorized to obtain or has obtained a background check report;
- (6) That the background check report may contain information concerning the conviction of a crime or crimes;
- (7) That an individual has the right to obtain copies of the background check report and of any documents compiled from it, if available, that were established from the information gathered by the employer during the application process or after a request by the applicant or employee to receive it; and
- (8) That an individual has the right to dispute the accuracy and completeness of the information in the background check report and the right to request and obtain a correction or a change in information under certain circumstances.
The statute permits the Ohio Attorney General to bring a civil action against an employer for violations of the statute. Penalties under the Law can impose civil penalties of up to $1000 per violation, up to $5000 for a first offense, and reasonable attorney’s fees for the prevailing party.
What the Ohio Law Says Regarding Background Checks and Employers
There are a myriad of laws that impact on employment background checks in Ohio. Some are federal in scope such as the Fair Credit Reporting Act (FCRA), which is a consumer protection law that regulates the collection and use of background information by consumer reporting agencies ("CRA"). These entities actually produce the vast majority of employment background information and reports. There are also many state statutes that impact on Ohio employment background checks. FCRA compliance is likely the single most important issue when using a CRA.
Using a CRA normally involves (1) executing an authorization and disclosure that captures the requisite signed consent to obtain criminal history, (2) the CRA then obtains the report for a fee, (3) the employer then reviews the report, and (4) if there is a disclosure that is considered adverse, the employer must follow adverse action procedures.
There are also various "ban the box" rules that have been enacted in Ohio with which we will deal later in this discussion.
First, prior to ordering any FCRA report, an employer must furnish to the applicant a disclosure that a consumer report or investigation may be obtained. The disclosure can only be made in writing as part of a separate document that consists solely of the disclosure (this is known as the "stand-alone disclosure"). 15 U.S.C. §1681b(b)(2)(A)(i). The stand-alone disclosure may not be part of a job application form. However, the disclosure can be combined with the authorization and release. 15 U.S.C. §1681b(b)(2)(A)(ii).
Next, it is essential that the employer obtain the applicant’s authorization before a report may be obtained. The CRA must have permission from the person about whom it is being requested. 15 U.S.C. §1681b(b)(2)(A). The CRAs have fairly standard releases that are routinely used for various purposes.
A CRA is prohibited from furnishing a report to an employer who does not have a permissible purpose for wanting the report. 15 U.S.C. §1681b.
In Ohio, CRA’s typically derive their data about employment, credit, where applicants have lived, and professional licenses from various sources that have been established over the years. This data can usually be sold without a license in most states because they are not considered to be a "consumer report." FCRA compliance kicks in when the CRA sells the information in a format that is considered by the FCRA to be a consumer report. This is when the data is in such a form that it can be used as employment screening. The categories of data that are typically in consumer reports include: criminal records (state and federal court systems); arrest records (state and local court systems); driving records (state motor vehicle registries); employment records (state and local agency job applications); reference checking; credit reporting; education records (state and local agency student transcripts); professional licenses; occupational licenses; and Social Security Number validation (as to whether a given number is connected to the individual who was tested for it).
Requiring an applicant to execute an employment application is the best way to obtain a signed authorization. If an application does not contain authorization language, then a release can be used. An employer can obtain a release and secure permission after a conditional offer of employment is made, but before an adverse decision is made based upon the report. This way, the requirement of obtaining the signature on a stand-alone authorization form can be avoided. An alternative way to save time and paperwork is to use the employment application as the vehicle to obtain permission. 15 U.S.C. §1681b(b)(2)(A)(ii). As for scope and length, generally there are no restrictions, but credit could be an issue.
Now to some of the nuances. If employment begins and ends within three days it is possible to utilize "short order" background checks that don’t require the FCRA pre-publication notices. The price for these short orders is generally slightly higher than standard orders.
Many employers understand that FCRA background checks are expensive and take time. Sometimes these these factors lead them to invoke after-acquired evidence that only becomes known about long after the employment ends. This is to say that an applicant or employee has lied on his resume about holding a license or degree that is needed for the job. When this happens, the employment ends, but sometimes it does not end in litigation.
Under the right set of circumstances, employers with such post-employment information could have a claim against the unauthorized reporting agency. 15 U.S.C. §§1681n(a), (o), 15 U.S.C. §1681c(f), and 1681e(b). Unless the reason for filling that information under Ohio’s at-will doctrine for terminating the employee was proper, this termination could lead to a wrongful termination cause of action. In doing so, the employer places itself in jeopardy of claiming after-acquired evidence that is very harmful to the employer. It could lose all legal rights to recover because the employer acted unreasonably. Ohio law states: "to prevail in a wrongful discharge case, the plaintiff must prove that the dismissal was contrary to public policy." Firestone Tire and Rubber Co. v. Bruch, 489 U.S. 101, at 106 (1989).
Ohio courts have adopted the definition of "public policy" as "the fundamental legally protected interests of society" derived from "the constitution, statutes, and administrative rules and regulations, as well as judicial decisions." Hiney Printing Co. v. Brunner, 50 Ohio St.3d 243, 250, 553 N.E.2d 105, 113 (1990). See generally Collins v. Ralston Purina Co., 32 Ohio St.3d 142, 512 N.E.2d 606.
For example, if an employer discharges an employee because its background check reveals that the employee failed to disclose a felony conviction, and it turns out that that the crime was either non-convictable or was ultimately dismissed, the employer could have difficulty prevailing on the after-acquired evidence argument if the event upon which the charge was based has no bearing on the employee’s qualifications.
Overview of Ohio’s Ban the Box Law
Ohio has adopted some variation of the "Ban the Box" movement, which are efforts that seek to prevent employers from inquiring into a job applicant’s criminal history prior to determining whether he or she is otherwise qualified for employment. Some versions of these laws ban employers from asking about criminal history on an application or defining certain categories of employment that are exempt from the law. Rather than focusing on the application process, this legislation seeks to lessen the barriers to finding employment for applicants with a criminal history. Currently, Cincinnati and Columbus are the only two cities in Ohio that have passed a "Ban the Box" law. Ohio has not passed similar statewide legislation.
Restrictions on Criminal Background Checks in Ohio
In Ohio, a person’s criminal record on the state and federal levels is maintained by law enforcement agencies and court clerks, among other entities. There are a large number of record types, both civil and criminal in nature. Ohio does not have a set of laws that protects consumers with respect to how this information is compiled or used by private employers during the pre-employment screening process. Ohio is not a "Ban the Box" state and has no state laws regarding this. So, how does Ohio regulate the information?
Ohio has designated certain records that are and are not admissible to employers for the purposes of making employment decisions. Ohio agencies are not permitted to keep all records, nor are they allowed to report or keep for reporting purposes all criminal conviction records.
All agencies that maintain criminal records in Ohio must maintain the following: (1) conviction records (adult); (2) guilty plea or guilty finding conviction records; (3) arrest records; (4) indictment records; (5) information or evidence of an arrest that does not result in a charge; and (6) the payment of court costs as a condition of releasing a person from charges. However, they are not allowed to maintain any record of the following: (1) entry of a nolo contendere plea; (2) a record of proceedings for a juvenile; (3) arrest records of minors; (4) information or evidence of a person being diverted from the juvenile justice system; (5) non-conviction records; (6) records that only contain a notation of the existence of a pardon; and (7) records of convictions for a violation of an ordinance or similar provisions if violation of the ordinance is a minor misdemeanor under Ohio Revised Code Sections 2901.02 and 3707.08. (Ohio Administrative Code, Section 109:2-1-12)
However, conviction records are not comprehensive. They do not include all such records. The Ohio Background Check Bill, House Bill 296, which was signed into law in July 2018 and took effect in October, expands the list of records that shall not be reported by or maintained by reporting or compiling agencies. The law also expands those crimes for which an individual can petition for sealing a record six months after receiving a pardon from the Governor.
Ohio Privacy and Consent Requirements
Obtaining a signed Privacy Policy and Consent is step one of the background check process. Ohio employers that are subject to the Fair Credit Reporting Act (FCRA) must obtain a signed "Disclosure" form from each applicant or employee, prior to obtaining a "consumer report." In general, if the employer is seeking to obtain an independent background check report from a Consumer Reporting Agency, this means that the employer is subject to the FCRA requirements for obtaining the signed disclosure. However, the FCRA does not apply when an employer is obtaining background checks through commercially available "background check" services (like IntelliCorp, Verified Person or ChoicePoint). Because the FCRA does not apply to these types of services (arguably even if the employer does not actually order a background check "report") the "Disclosure" form may not be required. In this case, the Ohio employer should have a separate Privacy Policy that sets forth the purpose for obtaining the background check and sets forth the disclosure that the background check may include "personal information" including arrest records, criminal conviction records , credit reports, driving records and other civil court records.
The Ohio Consumer Sales Practices Act "CSPA" governs the disclosure requirements for background checks that are not subject to the FCRA. For purposes of CSPA compliance, a background check should be considered a "consumer transaction," because, it is "the sale, lease or transfer of an item of goods, services or property of any kind which is primarily for personal, family or household purposes." R.C. 1345.01. To the extent the CSPA requirements apply, obtaining a signed "Disclosure" form or obtaining a signed Privacy Policy may be sufficient, but the fact that the Ohio privacy laws are relatively new means that we believe it is safer practice to have a separate form that clearly is a disclosure for a background check. We recommend a separate "consent" or "disclosure" form that states that the background check may include arrest records, criminal conviction records, credit records driving records or other civil court records. For those employers that are subject to the FCRA, obtaining a signed disclosure form is mandatory, so obviously better safe than sorry.
Resolving Issues Related to Background Checks Under Ohio Law
Works of Ohio (Background Checks), Section 10 – Handling Background Check Disputes
So you have conducted a background check on a job applicant, but it did not come out as expected. What do you do? First, if the background check was ordered from a consumer reporting agency, you did everything by the book under federal law. Congratulations on following the Fair Credit Reporting Act (FCRA)! The company that you hired to conduct the background check is responsible for any errors in the results because FCRA generally makes them prove the accuracy of disputed information in the report at little or no cost to the job applicant.
You are stuck paying for the FCRA-required process to allow the applicant to dispute the report, but at least you did not make the error and therefore you are not stuck covering the applicant’s costs to fix those errors. Under FCRA, the company that made the mistake has to help your applicant by re-verifying that disputed information and correcting any mistakes, or it has to pay for the fix.
But not under Ohio law. Ohio Revised Code 1347.04(B)(2)(d) imposes a duty on the employer to resolve disputes regarding the information contained in a background check, even if it was a third-party vendor that made the mistake. Fortunately, unlike FCRA, Ohio Revised Code 1347.04(B)(2)(d) does not require you to buy the applicant’s coffee or lunch first. Instead, it merely puts the burden on the employer to take on these costs without passing them onto the applicant.
Under Ohio’s new ban-the-box law, employers are specifically prohibited from requiring additional background screening until after an applicant has completed the first interview. The fact that some employers will decide to wait until after an interview to place the order for a background check may complicate the process of investigation for employers. After all, it’s a lot easier to request verification of employment with a former employer when the applicant is still there working for them. Of course, this is why Ohio has a set timeframe for employers to proceed with the background check after the initial interview.
In case the statute was not clear, Ohio Revised Code 1347.04(C) requires employers that run background checks on applicants to conduct a reasonable investigation into disputed reports that are inconsistent with the previously obtained background checks.
The statute provides no guidance for how an employer is to fulfill this requirement in the realm of private background checks. Presumably, once an employer learns of a discrepancy between a background check and third-party information such as a resume or an application, the employer must personally re-verify that information in a reasonable amount of time.
Updates and Recent Changes in Ohio Law
Recently, Ohio enacted Senate Bill 288, which makes significant changes to the consideration of criminal history in the hiring process. The law prohibits most employers from considering arrest records or criminal records for misdemeanors during the hiring process. The prohibition, however, does not apply to applicants who have been convicted of a felony. Similarly, employers are still permitted to consider convictions for felonies when making hiring decisions, especially those convictions that would relate to the position being filled.
From a practical perspective, employers who would like to consider only convictions prior to making a hiring decision will need to train any managers involved in the hiring process about the need to inquire only into convictions and not arrests or misdemeanor convictions. None of these changes impacts the authority of credentialing agencies to inquire into the background of the applicants both pre and post-hiring.
Best Practices for Employers
Employers who wish to conduct employment background checks on job applicants in Ohio should take the following steps:
- Employers may want to consider building a compliance program for background checks that is integrated with their overall employment policy program.
- Employers should audit and review their policies and forms in light of current Ohio employment law to ensure their forms and procedures remain in compliance.
- All employers should review their background check programs to ensure they comply with both federal and Ohio law, and to ensure that they don’t violate any Ohio laws specific to particular types of background checks such as criminal history or credit report background checks.
- Employers should always obtain written consent from applicants to conduct background checks, maintaining a copy of the consent form in the applicant’s file .
- Employers should be transparent in their purpose for conducting background checks, and should provide applicants a copy of any report they receive to allow applicants the opportunity to correct inaccuracies before a decision to hire or terminate is made.
- Employers who will not consider an applicant for hiring due to information revealed in their background check should not inform applicants of the information revealed. Instead, employers should simply notify applicants they were not selected for hire, without further explanation.
- Ohio employers should not inquire of criminal convictions on job applications or during the hiring process. Ohio employers should be prepared to discuss employment gaps.