When can you ask a candidate about criminal history? What can you actually consider once a report comes back? Do you need an individualized assessment, and what has to happen before you rescind an offer?
Two themes from the 2026 Professional Background Screening Association (PBSA) Annual Conference stood out: fair chance hiring laws continue to evolve, and adverse action procedures face increased scrutiny from regulators and plaintiffs’ firms.
Key Takeaways from PBSA 2026
- Timing rules vary: Ban-the-box laws now cover 37 states, Washington, D.C., and more than 150 cities and counties – and differ by jurisdiction, employer coverage, and stage of the hiring process.
- What you can consider in a hiring decision is narrowing: For example, New York’s statewide credit history ban took effect April 18, 2026, and Virginia’s expanded Clean Slate law took effect July 1, 2026.
- Individualized assessments require specific reasoning: Speakers highlighted challenges to generic assessments and scrutiny of how employers use criminal history under applicable fair chance laws.
- Pre-adverse action is a class action target: Speakers described a new wave of lawsuits alleging that employers made final decisions before candidates had an opportunity to respond.
- Compliance is shared, not transferred: Using a compliant consumer reporting agency (CRA) does not remove the employer’s own legal obligations.
When Can Employers Ask About Criminal History?
Some jurisdictions require employers to wait until after a conditional offer before asking about criminal history or obtaining a criminal background check. Ban-the-box laws now cover 37 states, Washington, D.C., and more than 150 cities and counties, although some laws apply only to public employers. Recent bills in South Carolina and North Carolina show the trend reaching traditionally employer-friendly states, even though neither had been enacted as discussed at the conference.
Other cities and states allow inquiries at an earlier stage. Coverage and exceptions vary, so confirm the requirements that apply to each position.
| Ban-the-box laws | Fair chance laws | |
|---|---|---|
| What it controls | When you can ask about criminal history | Which records may be considered and how they are evaluated |
| Typical timing | Varies by law; some require a conditional offer | Varies by law; review both initial assessment and response stages |
| What it requires | Removing criminal history questions from early hiring stages where prohibited | May include individualized assessment, specific notices, and set response timeframes |
What Employers Need to Know
- Map your locations: Both the job location and where the candidate lives may affect which rules apply, especially for remote roles.
- Align your workflow: Remove criminal history questions from applications and early interviews where required and set your ATS to run the criminal background check only after the allowed stage.
For a refresher, read Ban the Box: What You Need to Know.
What Information Can Employers Consider?
A record appearing on a report doesn’t mean you can use it. Speakers stressed the difference between what a CRA can report under the Fair Credit Reporting Act (FCRA) and other applicable reporting laws and what state or local laws let employers consider. Two 2026 laws show how quickly this is changing:
- New York consumer credit history restrictions (effective April 18, 2026): The law generally prohibits employers from requesting or using consumer credit history for employment purposes, unless a statutory exception applies. The restrictions also extend to asking candidates about consumer credit history in an interview.
- Virginia Clean Slate expansion (effective July 1, 2026): More offenses are now eligible for sealing, and, subject to statutory exceptions, employers can’t require candidates to disclose sealed arrests, charges, or convictions. A willful violation of the prohibited-practices provision is a Class 1 misdemeanor.
What Employers Need to Know
- Separate “reportable” from “usable”: Base adjudication guidelines on what each jurisdiction lets you consider, not just what appears on the report.
- Retrain interviewers: In New York, avoid questions about consumer credit history unless an exception clearly applies.
Are Individualized Assessments Required?
In a growing number of jurisdictions, yes, and regulators are checking their quality. Panelists described a “fair chance avalanche” of enforcement, including systemic investigations by California’s Civil Rights Department and claims in New York City and Illinois arguing that assessments were too generic. In Pennsylvania, regulators and private attorneys are leaning more on the state’s long-standing criminal history law.
The challenge is volume. High-volume hiring favors automation, but these laws may require individual judgment about job relatedness, the seriousness of the offense, time passed, and rehabilitation. The specific factors and procedures vary by jurisdiction.
What Employers Need to Know
- Review exclusion rules: Evaluate blanket statements such as “no felonies” in policies and job postings and confirm any legally required disqualifications with legal counsel.
- Make each assessment specific: Document the connection between the record and the role, and consideration of relevant mitigating information.
- Plan for capacity: Assign responsibility for assessments and candidate responses and allow time for review before a final decision.
What Must Happen Before an Adverse Employment Decision?
When an employer is considering an adverse employment action based in whole or in part on a consumer report, the FCRA generally requires the employer to provide the report and “A Summary of Your Rights Under the Fair Credit Reporting Act” before taking that action. Give the candidate a reasonable opportunity to review and respond before making a final decision. If the employer proceeds, it must provide the required adverse action notice. State and local laws may add assessment steps, notice content, and response periods.
Speakers described a new wave of pre-adverse action class actions that target gaps in processes designed to be compliant. Examples included systems and communications that treated preliminary decisions as final before candidates had an opportunity to respond.
What Employers Need to Know
- Review automated messages: Use accurate, neutral statuses during the response period, and check that your system does not automatically finalize a decision or close the candidate’s application.
- Train candidate-facing staff: Make sure recruiters and managers know the decision isn’t final yet.
- Keep proof: Retain notices as sent, with timestamps, documented final decisions under a counsel-approved retention and access policy, plus any candidate responses.
Frequently Asked Questions About Fair Chance Hiring and Adverse Action
What is the difference between ban-the-box and fair chance laws?
Ban-the-box laws control when an employer can ask about criminal history, at a stage specified by the applicable law. Fair chance laws are typically broader and may also control how employers evaluate records, often requiring an individualized assessment and specific notices. The terms overlap and are not used uniformly.
Do employers have to do an individualized assessment?
It depends on the jurisdiction and position. Several states and cities, including California, New York City, and Illinois, have requirements governing how employers assess criminal history before certain adverse employment decisions. Regulators there are scrutinizing assessments that appear generic.
How long should employers wait after sending a pre-adverse action notice?
The FCRA does not specify a minimum number of days, although FTC guidance recognizes that a reasonable period should elapse before final adverse action. Some state and local fair chance laws set a minimum response window, so employers should comply with all applicable response periods and procedural deadlines. Do not treat a standard waiting period as sufficient for every jurisdiction.
Does using a background check company make an employer compliant?
No. A CRA handles reporting obligations, while employers remain responsible for their applicable obligations concerning disclosures, authorizations, fair chance timing, individualized assessments, and adverse action decisions.
Is Your Fair Chance Process Ready?
- Criminal history questions are removed from applications and pre-offer interviews where required.
- Adjudication guidelines reflect what you can lawfully consider, not just what’s reported.
- Policies and job postings avoid blanket criminal history exclusions unless permitted or required by applicable law.
- Individualized assessments are specific to the candidate, role, record, and applicable legal factors at the required stages.
- ATS statuses and automated messages accurately reflect the preliminary nature of decisions during the pre-adverse action process.
- Required notices, delivery records, assessments, timestamps, and candidate responses are retained under an approved policy.
Build a Compliant Screening Program with InCheck
The conversations at PBSA 2026 made one thing clear: compliance depends on timing, judgment, and documentation, not just a compliant final report. Speakers named “assuming the CRA handles everything” as one of the most common employer mistakes, so it’s worth reviewing each step of your process with your screening partner and clarifying responsibilities at each step.
At InCheck, we help organizations build and maintain trustworthy hiring systems that support their hiring needs and their compliance responsibilities, from ATS integrations that support your screening workflow to guidance on building a background check policy. Reach out to us at hello@inchecksolutions.com to discuss your screening workflow and the questions your team should review with legal counsel.
Sources
- Beyond the Background Check: 2026 Legal & Regulatory Update for Screeners, Tim St. George and Noah J. DiPasquale, Troutman Pepper Locke, PBSA 2026 Annual Conference
- Employment Screening 101 & 201: Requirements and Common Mistakes, Andrew Gray and Haley Norwillo, Littler Mendelson P.C., PBSA 2026 Annual Conference
- What’s New in Employment Screening Litigation, Erin Novak (Uber), Chad Kaldor and Bill Simmons (Littler), PBSA 2026 Annual Conference
- Hot Potato: Compliance Responsibility in the Screening Funnel, Heidi Pattie (iCOVER) and Melissa Foiles (ILYM Consulting), PBSA 2026 Annual Conference