The regulatory landscape for background screening compliance is evolving under the Trump...
Cisive's compliance expert, Michael Kendrick, discusses upcoming compliance trends in 2025. Background screening compliance is a rapidly changing landscape. We do not offer legal advice, and we recommend consulting with your legal team when building your background check compliance strategy.
Table of Contents
- The Privacy Puzzle: Navigating the State-Level Patchwork
- The Resurgence of Fair Chance: A New Era of Individualized Evaluation
- The AI Conundrum: Striking the Right Balance
- Paving the Way for Progress
Recent election results have brought the issue of employment and criminal history into the national spotlight. With well-known figures facing legal challenges while gaining public trust, employers are also rethinking how to evaluate applicants with criminal backgrounds.
This shift reflects broader changes in the compliance landscape for the background screening industry.
As someone with extensive experience in this field, I can say confidently that the current environment is uniquely complex. The balance of power is shifting away from federal oversight, making way for a complex network of state and local laws. Meanwhile, front-page news stories like advances in AI and the new presidential administration's policies are steadily making their way into daily background screening practices.
To adapt, you’ll need to remain vigilant — and possibly rethink your screening strategy. Here are three key trends poised to reshape background checks in 2025.
The Privacy Puzzle: Navigating the State-Level Patchwork
Privacy regulations used to be more straightforward, mainly guided by the federal Fair Credit Reporting Act (FCRA). Today, nearly half of the states have enacted comprehensive consumer privacy laws, each with its own nuances. Staying compliant now means carefully tracking state-specific statutes and adjusting processes accordingly.
California and New York have been leaders in data privacy regulation with laws like the California Consumer Privacy Act (CCPA) and the New York SHIELD Act, which grant individuals more control over their personal data and impose strict rules for data collection and use. Each state law, however, has different compliance thresholds and enforcement mechanisms. This means HR leaders must be vigilant in monitoring developments in each jurisdiction, further complicating compliance for organizations operating across different states and local jurisdictions.
Implementing robust data management protocols helps ensure your organization handles sensitive information accurately and stays ahead of evolving standards. Work closely with legal experts to understand which laws affect you, and how to maintain compliance. This will help your company deal with complicated rules across your areas of operation and reduce compliance risks effectively.
The Resurgence of Fair Chance: A New Era of Individualized Evaluation
Fair chance laws, which restrict employers from asking about criminal records until later in the hiring process, have been gaining traction at the state and local levels for years. The recent election results might further amplify this trend, as public sentiment shifts toward offering more second chances.
Fair chance laws are designed to prompt employers to take a nuanced approach to evaluating criminal histories. This includes considering not only the nature of the offense but also how much time has passed since the offense was committed, and perhaps most importantly how relevant the conviction is to the job at hand. This shift in perspective means that a simple “hire/don’t hire” decision is no longer enough. Instead, employers must use the information from background screening providers and fully evaluate the collective information to formulate a more complete picture of a candidate’s suitability.
An in-depth understanding of the EEOC’s Green Factors can help you prepare, as these guidelines outline how to fairly assess criminal records during the hiring process. Update your training programs so that your hiring managers understand these factors, and how to use them to make individualized assessments instead of ubiquitous decisions. Incorporating these practices will help you align with public sentiment and legal expectations, ultimately supporting fair and informed hiring decisions while mitigating risks.
The AI Conundrum: Striking the Right Balance
Artificial intelligence is becoming a significant player in hiring processes, but state and local governments are scrambling to establish guardrails. The lack of a universal definition of AI means navigating a landscape of conflicting regulations.
California and New York have both introduced regulations that require transparency, rigorous oversight and testing, regimented audit requirements, grant individuals the right to challenge adverse decisions and contain significant ramifications for the use of any intentional or unintentionally biased data that may result from AI systems. However, these laws vary in their specifics, and the landscape is evolving rapidly.
If you’re using background screening products powered by AI, establish testing and validation protocols to confirm your tools work as intended and avoid unintended biases. Confirm that your vendor partner used data that’s representative and unbiased, that you can oversee the factors the tool is using to make decisions, and that it’s compliant with existing laws. AI can improve efficiency and reduce human error, but only if you adopt a balanced approach that maintains an element of human oversight.
Paving the Way for Progress
The compliance landscape is in flux, and that can be challenging to manage — but it also presents an opportunity. By proactively addressing the evolving regulatory environment, you can navigate these uncharted waters and position your business for success. It’s time to shed the old ways of thinking and embrace a future where background screening isn’t just a box to check, but a strategic tool for building a diverse, resilient workforce.
