Employee background check records are an important tool for employers to verify the information provided by job candidates and to ensure that they are hiring qualified and trustworthy individuals. However, employers must know the legal requirements for retaining these records and the best practices for keeping them secure.

Employers must generally keep employee background check records for a certain period after the employment relationship has ended. The specific length of time that records must be kept can vary depending on the state where the employer is located and the type of information included in the records.

Employers are responsible for ensuring they remain compliant with the Fair Credit Reporting Act (FCRA) and other laws regarding background checks. Retaining employee background check records is an integral part of this compliance, but it can be confusing to understand how long records must be kept.

How Long Must Records Be Kept?

Under federal law, employers must retain certain employee records, including background check records, for a minimum of one year. This includes records related to hiring, promotion, demotion, transfer, layoff, termination, and any other employment action. However, some states have stricter requirements for retaining background check records and may require employers to keep these records for extended periods.

Generally speaking, employers should retain any employment records related to a background check for at least one year after the employee leaves their service. This includes any documentation related to the background check, such as release forms and authorization documents. Additionally, depending on the type of information obtained during the background check, employers may be required to keep records for up to seven years in certain jurisdictions or even longer, depending on individual state laws.

The FCRA requires employers to keep certain types of records for a certain period, depending on the kind of information and the state or jurisdiction in which it was obtained. For example, employers must maintain records related to criminal background checks for at least five years from the date of hire in some states. In other states, employers may have to keep records about civil judgments and further non-criminal background checks for up to seven years.

Employers should also be aware of laws or regulations in their state regarding how long they must retain records related to drug testing, credit checks, and other types of pre-employment screenings. These requirements will vary from state to state, so employers need to research their state laws.

Specifically, the Fair Labor Standards Act (FLSA) requires employers to keep certain records related to the payment of wages and hours worked by employees. This includes records of the employees’ names, addresses, occupations, payment amounts, hours worked, and any deductions made from the employees’ pay.

In addition, the Equal Employment Opportunity Commission (EEOC) requires employers to keep records related to hiring, promotion, demotion, transfer, layoff, termination, and any other employment action for a minimum of one year. This includes background check records and records related to complaints of discrimination, harassment, and other employment-related issues.

Documents to save pertinent to an employee background check file may include:

• Resume of the candidate
• Candidate’s application for employment
• Candidate signed background check forms, including the authorization and disclosure documents
• Background check report
• Correspondences concerning background checks and hiring decision
• Any notices served to the employee

State Laws Applicable to Employers in New Jersey

According to New Jersey state laws, employers must keep documents related to an employee’s personnel file for at least two years after their employment has ended. This includes, but is not limited to, an employee’s: resume, application, letters of recommendation, and other documents related to the employee’s application for employment.

Knowing the minimum retention demands is only half the challenge. Employers may choose to plan for the disposal of certain documents once the required storage time has passed. In contrast, others may retain certain records for as long as feasible. We try to bring order to the chaos through our recommendations.

Our Recommendation – 6 Years

As per the Fair Credit Reporting Act (FCRA), consumer claims can be made for up to two years once the consumer discovers a violation. In case the consumer does not have the means to know if a violation occurred, the period is set at five years.

The statute of limitations may start from the time the background check was requested until the date the background check was finished and/or received if it is thought to have caused an infringement. The time an individual takes to decide can cause the period of legality to be prolonged for weeks or months after the consumer report is completed or handed over.

There is always a chance that the act interpretation differs from the generally accepted five-year period. To cover for the prolongation of the statute, it makes sense to retain background check records for six years after initial ordering.

The Bottom Line

In summary, employers must know the legal requirements and best practices for retaining employee background check records. By establishing a clear record retention policy and ensuring that these records are stored and secured correctly, employers can protect themselves and their employees while demonstrating their commitment to compliance and good business practices.

Employers should retain records related to employee background checks for at least six years after they depart from their service. Depending on individual state laws, they may be required to keep them for up to seven years.

It is deemed prudent to maintain records for six years because if an accusation arises that a background check was linked to any sort of infringement, the statute of limitations might commence from the day the background check was requested and end on the day it was finished and handed over. Depending on how long it takes an employer to decide, the statute can stretch for multiple weeks or months after receiving the consumer report. Therefore, to err on the side of caution, a six-year time frame should be adopted.

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