An Overview of Michigan Background Check Law
In Michigan, as well as 48 other states, background checks refer to any form of research into a person or their trustworthiness. Most commonly, the term refers to the comprehensive checks conducted by employers prior to employment to evaluate the risk of negligent hiring and retainment.
In theory – and, often in practice – background checks are a valuable tool used by employers to sift through an often overwhelming population of candidates. However, as with many tools, background checks can be put to use in the wrong ways and be used as a cover for illegal discrimination.
Because of the potential for misuse , Michigan law provides some protections for workers in the state by limiting when and how background checks may be conducted.
The Legislature drafted most of the laws limiting the use of background checks and credit reports in the Michigan Occupational Code. The general relevant sections of the Code are:
The listed laws provide a strong starting point for understanding how Michigan handles background checks. However, a deeper understanding requires knowledge of federal laws, common law, and state-specific nuances. It is not unusual for employers in Michigan to be stymied by complex rules and interpretations. In the next few sections we will provide commonly needed answers to questions about background checks in Michigan.
Background Check Procedures in Michigan
Types of background checks conducted in Michigan cover a wide spectrum. The most common include pre-employment checks, credit history checks and criminal background checks. These are fairly comprehensive and are generally required to gain employment, as stated above. A range of other background checks are available. The type of check required will depend on the job being sought and the purpose of the check.
Employers are often authorized by law to conduct criminal history background checks. Michigan has laws governing what records may be disclosed, so the range of information available to an employer will depend on whether the employer is a private or governmental entity, the nature of the information sought and the particular applicant. The Michigan State Police maintain data sources on arrests and incarcerations. Various Internet search engines can also provide a wide range of criminal history background information.
Credit history checks are often required for finance-related jobs and are also permitted by law. Like criminal history background checks, the range of information is fairly comprehensive, but is generally limited to certain types of employers.
Beyond those typically required by law, other background checks are typically requested and/or permitted. Examples include social security number validation, identification verification, driving records and reference checks. Security clearance checks and employment verification checks generally are allowed only through government agencies.
Employer Obligations under Michigan Code
The Fair Credit Reporting Act ("FCRA")
In Michigan, the general provisions of the FCRA govern employers. Under the FCRA, an employer must first obtain specific information from the applicant or employee before it can use a third party vendor to conduct background checks or criminal record searches.
Consent
Employers are required to provide notice to the applicant or employee that they may wish to conduct a background check prior to seeking the pre-employment information. Specifically, the FCRA requires the notice to include the following information:
If the employer (or third-party vendor) conducts multiple background checks in connection with employment, the notice may be provided on one document. However, if the background check is conducted after hire, the notice must be provided to the employee in clear and conspicuous language in a document that consists solely of the authorization. Employers are not required to provide a pre-adverse action disclosure at the application phase or prior to receiving the criminal record. Because of this, many employers will issue the notice only as a standalone document after conducting the employment investigation. Other employers are not content with the foregoing process and elect to perform ongoing background checks on employees, or to use contractors who have access to sensitive customer/employee information as part of their duties. In such cases, the employer should provide the current employee (or former employee) a new disclosure form.
Disclosure
If the employer obtains a copy of the criminal record after the background check is completed, then the employer is required to provide a copy of the report to the individual prior to taking adverse action based on the report. Adverse action occurs when the employer determines not to hire the individual (or terminate the individual) based in whole or in part on the contents of the report. The FCRA requires the employer to provide the individual with the following information:
To confirm that the records check has been provided to the applicant, the employer should retain a copy of the report in the applicant’s file along with proof that the applicant received the report. If the individual was not hired based upon the information in the report, then a copy of the report should be kept in the new hire’s file.
Employers who take adverse action based in whole or in part on the report must provide the applicant with a notice of adverse action. This notice can be included with the report, or it can be separate. If it is separate, the employer must be sure to provide the applicant with the report prior to sending the notice of adverse action.
Michigan Employment Records Laws
Under the Michigan Employment Records Statute, employers are required to provide an applicant with a copy of any criminal history report that is conducted by the employer prior to taking adverse action based upon the report. Additionally, the employer must provide the applicant with all other records material to the employer’s decision to take adverse action (with certain exceptions). The applicant must request a copy of the report, and it must be made available within 30 days.
At-Will Employment
Unless the employer is covered by a collective bargaining agreement, Michigan is an at-will state. As such, the employer may terminate an employee without cause or notice. However, it is important to note that under Michigan’s Elliott-Larsen Civil Rights Act and/or Michigan’s Persons with Disabilities Civil Rights Act, an employee may have legal recourse against an employer who unlawfully discriminates against an employee based upon sex, race, age, national origin, religious affiliation, or disability.
Practical Applications
The rules provided under the FCRA and Michigan law exist to provide rights to applicants for positions. Consistent with the FCRA, applicants have the right to review the report prior to any adverse action being taken. Moreover, those individuals have the right to review the report in order to ensure that the report is accurate prior to any final determination of the applicant’s suitability for the position. Since the FCRA is a federal law, the state Supreme Court may have little to no impact on the FCRA and its requirements.
Application and Employment Protections
As with all federal and state laws that protect the rights of employees and job applicants, Michigan law contains protections for job applicants and employees regarding background checks.
In 1964, the passage of civil rights laws extended protection to individuals against discrimination based on, among other things, race, sex, religion, and national origin. The Age Discrimination in Employment Act, the Americans with Disabilities Act, and similar state laws have also made employee discrimination on those protected characteristics unlawful. These discrimination restrictions would also extend to the use of background checks in making personnel decisions.
Practice Tip: Since an employer may rely on information contained in a background check when evaluating an applicant, and make a decision not to hire or continue to employ an applicant based on that information, care should be taken not to violate anti-discrimination laws by relying on a background check to exclude or terminate a person based on a protected characteristic.
However, the Michigan Civil Rights Act does contain specific provisions applicable to criminal history record information. MCL 37.2205.
It is unlawful for an employer with 3 or more employees to refuse to hire a person based on information contained in a background check if the information was obtained from:
· An arrest record, unless there has been a conviction for that offense;
· Criminal a record, sought or obtained by an employer prior to making a decision to hire an applicant, unless the offense for which the applicant was convicted of is directly related to the position in question; or
· A conviction record (unless obtained from a court) that the employee or job applicant was pardoned of.
If any such background check information was sought, requested, or used, the employer must provide notice to an employer if any such information is found that was the basis for the decision not to hire or terminate.
In addition, Michigan law allows a person to challenge the accuracy of their arrest record if it is obtained from the Michigan State Police. If the record cannot be confirmed by the Michigan State Police as accurate, then it must be removed from the employer’s background check report and may not be relied upon by an employer when making a decision not to hire or terminate an individual based on such information.
Note, this does not eliminate an employer’s obligation to completely check, vet and confirm the employment history already provided by the applicant or employee if it was discovered through a background check that the history provided was incorrect.
Federal Regulations on Michigan Background Checks
Michigan background check laws are subject to the regulations under the Fair Credit Reporting Act (FCRA). The FCRA is a federal law that requires background check providers to follow strict guidelines for protecting personal privacy and other consumer rights. The law affords consumers many benefits, such as:
The FCRA provides both applicants and employees with the right to understand what is in their personnel records and the ability to dispute whatever is there. It also provides applicants with more time to correct any errors prior to a negative employment decision. Michigan background check laws require employers to observe these rights. If an employer uses a third-party background check provider, the employer must comply with both Michigan and federal regulations . If the prospective employer does not use a third-party background check provider, the prospective employer is not playing by the same rules as one who does. Federal requirements apply to all employers. That said, Michigan does not have additional laws restricting the use of criminal records for employment purposes. In fact, it is still lawful for an employer to require drug testing or background screenings, though some federal contractors are required to provide a SHA-1 form, which is a disclaimer about the process and gives the applicant the option to correct errors or errors. Michigan is not a particularly stringent state when it comes to employer restrictions.
Recent Amendments to The Michigan Code
Over the past few years, there have been considerable changes to Michigan’s background check requirements and regulations. For example, a 2018 amendment to the Michigan Youth Employment Standards Act (YESA), Public Act No. 338 of 2018, amended the definition of "background check" which now includes "a criminal history check" under the YESA and requires a "criminal history check of the minor" prior to the minor starting work. With one exception! THIS DOES NOT INCLUDE A CRIMINAL HISTORY CHECK FOR MARIHUANA.
Prior to the enactment of the new law, Michigan employers were allowed to have a minor fill out a form asking questions concerning on criminal history. Now, as part of the criminal history check, employers or others hiring minors must perform a criminal background check. The change was put in place to prevent child trafficking and for other law enforcement objectives. However, since the criminal background check is not required when hiring adults, this new law may actually have an unintended result, by effectively creating two pools of jobs; one where the jobs require a background check for minors and one where jobs do not require a background check.
Amendments to Michigan Occupational Safety and Health Administration "MIOSHA" provide additional restrictions on employment and hiring practices. MIOSHA will conduct tours of various facilities in Michigan that hire young workers to observe them during the summer months. MIOSHA has also promised to increase awareness of its youth employment requirements by distributing flyers to the public and holding events at community and recreation centers.
Michigan agencies are also dong a better job at helping other states, foreign countries and the public in general look up whether a certain Michigan business or agency is open for profits. The Department of Licensing and Regulatory Affairs uses the Uniform Commercial Code Online Search. The search can show delinquent businesses and individuals as long as there are no pending lawsuits. This way, the public can verify whether a business is still operating and in good standing.
The updated laws and legislative amendments to Michigan’s background check laws may make it harder for some young people to get jobs in the state of Michigan. On the other hand, updates to the Michigan Occupational Safety and Health Act may make it more difficult for employers and businesses to appeal or challenge violations claimed by MIOSHA. The best way to stay abreast of any other changes, is to check the Michigan Legislature and the Michigan Occupational Safety and Health Act, MIOSHA websites.
Issues and Solutions in Michigan Background Check Law
Employers can flout Michigan background check laws without malicious intent. Common pitfalls include: Guidelines for lawful criminal background checks can be confusing for employment/human resources professionals and small business owners alike. To help ensure success, pursue these best practices: More information about background checks and other employment laws is available from the Equal Employment Opportunity Commission (EEOC) and Michigan Department of Civil Rights. Regarding Fair Credit Reporting Act (FCRA) regulations specifically, the Federal Trade Commission (FTC) provides extensive guidance on preparing and using background check reports in compliance with the law. Dealing with the complex mosaic of Michigan background check laws requires diligence and forethought. Fortunately, experienced legal counsel can guide your processes to ensure compliance and avoid legal trouble.
Expert Analysis and Case Documentations
A common opinion amongst background check experts is that Michigan is relatively restrictive when it comes to pre-employment background checks. In most states, employers have some leeway when it comes to contacting a potential employee’s previous employers. Not so in Michigan. Michigan law provides that an employee’s "character," as represented by previous employers, cannot be discussed with job seekers. It is unclear how you could get specific information about an employee without revealing his or her character. Given the vagueness and the ambiguity of this statute it is unlikely that it will be strictly enforced.
Amongst practitioners there are variations in opinion about the extent that Michigan employers may rely on criminal history background reports. For example, some statute and case decisions suggest that an employer may go back at least 10 years and as much as 15 years for certain types of offenses. Other experts take the position that a flat five-year benchmark is appropriate as a general rule. Lastly, there are opinions that suggest that the Criminal History Record Information Act (CHRIA) does not limit the information that may be obtained. These opinions and their application to various settings must be researched thoroughly and applied on a case-by-case basis .
A few years ago, the Sixth Circuit Court of Appeals decided a case that exemplifies the value of pre-employment background checks. In George v Youngstown, Ohio, the court said the dismissal of a male applicant seeking a job as a firefighter could not be overturned because the applicant was not qualified for the position. The man lost his appeal when the Sixth Circuit reviewed the actions of the fire department and simply decided that the department did not discriminate against the applicant, but merely protected itself.
In this case, two women were hired to reinforce a male-dominated workplace. The men felt that their territories were being invaded, and were not receptive to the female firefighters. This was one factor that contributed to their eventual hiring. In addition, the decision to hire the women was in part due to the fact that the city was facing sexual harassment suits made by other female firefighters against male firefighters. The decision to hire the women was reasonable under these circumstances. A third reason for hiring the women was to remedy past discrimination.
George v Youngsten is significant because it suggests the employer’s motivation and the remedying of past discrimination can be important factors in the hiring process. Employers and practitioners should be aware of this when they conduct a pre-employment background check.