An Overview of Iowa Background Check Laws
The laws that govern the use of background checks in employment decisions are a patchwork of federal and state statutes, regulations and case law. Employers in Iowa must comply with a number of laws at both the federal and state levels when conducting background checks or otherwise obtaining information about applicants and employees.
The Fair Credit Reporting Act (FCRA) is a federal law that sets forth procedures that employers must follow before seeking certain types of consumer reports for employment purposes, such as credit reports obtained from a consumer reporting agency. Under Iowa law, employers may not obtain or use any consumer report from a consumer reporting agency in connection with employment or any other purpose without the prior written or electronic consent of the consumer to do so. The Iowa law does not include the same restrictions on employers that the FCRA imposes, nor does it define consumer report the same way that the FCRA does. For example, under Iowa law, the prohibition and consent requirement only applies to credit reports.
Given the FCRA’s elaborate requirements for giving notice to employment applicants that consumer reports may be used for employment purposes, and other nuances, most employers only need to inform applicants that their consumer report may be used for employment purposes, obtain the applicant’s written or electronic authorization , and proceed to obtain a consumer report from a consumer reporting agency. Because the FCRA has more stringent requirements than Iowa law, Iowa employers are best served by informing job applicants about their rights under the FCRA, including notifying them that they have rights under both the FCRA and Iowa law.
Under federal law, employers subject to the FCRA are required to post or otherwise provide a summary of federal Fair Credit Reporting Act Rights. The Iowa consumer reporting agency must provide a copy of the FCRA summary.
In addition to the FCRA, employers must be mindful of the provisions of the Fair Employment Practices Act, Iowa Code §§ 216.1-216.21 (FEPA), which prohibits an employer from inquiring about an applicant’s race or national origin, color, age, religion, sexual orientation, gender identity, creed, disability, pregnancy, genetic information or veteran status. If an employer obtains arrest or conviction records, it must treat those records in conformity with federal and state employment discrimination statutes. The Iowa Civil Rights Act further limits the circumstances under which inquiries can be made about criminal convictions. Iowa Code § 216.6(8). Iowa law also prohibits employment discrimination against individuals who exercise their rights under the Family Medical Leave Act or the Uniformed Services Employment and Reemployment Rights Act for the period allowed under those laws. Iowa Code §§ 261A.4; 261.13.
Types of Iowa Background Checks
There are several different types of background checks that can be conducted in Iowa, including employment-related checks, tenant screening, and criminal record searches, which are a bit more specialized (and we’ll also discuss pre-employment credit checks, and Iowa’s general statewide credit guidelines). Let’s take a look at some of these common types of background checks.
Employment Background Checks
Employment screening is extremely common. As a matter of principle, background checks should not be more invasive or contain more information that is necessary to make an employment decision. Relevant factors for employers to consider in conducting background checks include: (1) nature of the information sought; (2) time frame covered by the reports; (3) number of records searched; and (4) recency of the records searched.
For example, if you are a moving or shipping company, you may be concerned about hiring someone with a record of vehicular homicide and/or drunk driving. Conversely, if you are a non-profit, then such a record is probably not relevant. In broad terms, the search should be based both on the job requirements, and the local laws regulating background screening.
Tenant background checks
In Iowa, when someone wants to rent an apartment, they usually have to sign a rental application. As part of filling out the application the prospective tenant will usually give the landlord a check (or list of checks) as payment for the tenant background checks conducted by the property manager.
Credit Checks
When it comes to potentially running a credit report on a job applicant, Iowa state law prohibits employers from using credit history information for decisions unrelated to the position.
The Iowa State Legislature passed House File 233 (HF 233), which amended Iowa Code section 91C—Prohibited Employment Discrimination Based on Credit History, on 4/26/2018. Basically, this law provides that in order to run an applicant’s credit report, generally the employer must prove that the applicant’s credit history bears a "direct relationship" to the position in question, and is "substantially" related to the current or potential job position. There are some exceptions: As with pre-employment criminal records, it is important to know that employers in Iowa and everywhere else are strictly limited in how they can use and disclose the information they obtain through background checks. It is therefore recommended that companies who use background screening consult with legal counsel prior to conducting background checks.
Iowa Employment Background Checks
Employers in the state of Iowa are required to obtain signed permission from individuals prior to conducting any type of background check. Employment background checks in Iowa are administered by private companies and law enforcement agencies, depending on the scope of the information requested. Federal law does not require employers to provide notification of a background check to a prospective employee; however, Iowa law does require employers to notify applicants that an application may have such a search performed on them. All individuals have the right to inspect all public records in Iowa, including where their background checks are conducted by the staff of background check businesses.
Certain forms of information cannot be obtained by background checks in Iowa. Pursuant to Iowa Code section 692.1, it is illegal for a company or agency to collect data on applicants regarding race, color, religion, sex, ethnicity, national origin, or political affiliation. Furthermore, no personal identifiers such as social security numbers or drivers license numbers are permitted to be provided to companies who offer background checks on behalf of employers.
Tenant Background Checks in Iowa
Background checks are critical for landlords to determine whether a potential tenant will be reliable and trustworthy, but Iowa law imposes some rules and guidelines that you need to consider before running a background check on a tenant.
Iowa code provides that the following under Iowa Code 729:
- A search of state criminal history at the district court level
- A national criminal history check through the federal department of justice, the national crime information computerized databases
- A search of the clerk of courts website in the county where the prospective renter resides and
- A national sex offender registry check
The results of the background check must be sent to the rentee. The date of the report must also be included on the result.
If a landlord feels the need to deny the application for rental housing based upon the results of the background check, he or she must send a written notice with the specific reasons for denial. That written notice must be sent via certified mail and must be postmarked seven days prior to the proposed lease term.
This section details important elements and procedures that all landlords should stick to when conducting a background check on a potential tenant. It is not comprehensive to all tenant rights and landlord obligations so be sure to seek formal legal advice if you have or expect issues with a tenant seeking a rental property.
Background Checks for Purchasing Firearms
The Pre-Transaction Background Check
While a pre-employment background check varies depending on what the employer is checking for, e.g., driving record, criminal history, education, etc., a pre-transaction background check is always a criminal record check. Likewise, while it may not feel like it to the transacting individual, a transaction background check is always performed for the purpose of making sure that the individual in question is allowed to make a purchase of the good in question. For example, while the federal government does not review all individuals before they buy a car, they do as a general rule review people who purchase firearms.
Under Iowa Code Chapter 724, individuals who apply for the purchase of a firearm must submit to an investigation pertaining to their criminal history and mental health. Iowa Code 724.15. Having a criminal record may disqualify an individual from purchasing a firearm and a mental health illness may disqualify a person from buying a firearm. Thus, such individuals are prohibited from receiving a gun.
Practically speaking, the purchase of a firearm is not very different from the purchase of a home, which invariably requires a 3rd party to look into ownership of the property so the bank is not lending money on a home with an unknown or disputed ownership. Here, though, a bank cannot loan on a firearm if the prospective purchaser has a felony conviction or mental health history – hence the pre-purchase background check.
Note that only certain felony convictions trigger the prohibition against the possession of firearms , namely:
- Convictions for certain violent misdemeanors, where the person received an indeterminate sentence under Iowa Code 907.3 or is "required by law" to attend domestic abuse treatment under Iowa Code 708.2A. See Iowa Code 724.26(1)(d).
- Felony convictions involving poison gas or similar weapons, Iowa Code 724.1.
- Felony convictions for certain weapons crimes, like use of a suppressor, Iowa Code 724.4A.
- Certain felonies which involve a weapon, Iowa Code 908A.3(10).
The Post-Transaction Background Check
While the seller may not check the purchaser’s criminal history (they are required not to, in fact), the state will. It does so through both NICS checks of prospective purchasers and the process of investigating gun shows. The federal FBI’s National Instant Criminal Background Check System (NICS) checks information provided by prospective buyers, such as name, sex, date of birth, and race against FBI databases on criminal history, mental illnesses, and other prohibiting factors. See 28 CFR 25.56(a)(5). See Iowa Code 724.31(1)(a) (requiring licensee to submit federal background check to FBI).
If the FBI determines a prohibitor applies to the prospective purchaser, then the sale cannot go forward. For instance, if a person has committed a felony and is trying to buy a gun, that purchase will be denied even if they are not charged with a crime.
Privacy Issues and Legal Protections
Iowa law provides important privacy protections with respect to background checks. The same is true, of course, for federal laws such as the Fair Credit Reporting Act. Unfortunately, in some areas, Iowa hasn’t kept up with other states with new laws that provide additional privacy protections.
When conducting an employment background check, Iowa employers must comply with several laws that limit their ability to use private information gleaned from background checks. For example, Iowa Code § 729.7 bans employers from requesting or requiring access to a consumer’s social media account, unless the employer is investigating alleged employee misconduct or electronic workplace monitoring. Companies conducting consumer reporting agency background checks must provide disclosures within a consumer report when a "consumer may see or determine the substantive information in the report." Iowa law defines substantive information in a consumer report as "information … concerning the performance of a specific transaction or service requested by a consumer and bearing on a consumer’s credit worthiness, credit standing, credit capacity, character, general reputation, personal characteristics, or mode of living." Iowa Code § 714C.1(12). Employers should be careful not to request or solicit information from a job applicant’s social media account as part of routine background checks for employment. As I noted in my March 7th blog, it is illegal in Iowa for an employer to ask that a candidate share their social media account passwords.
Iowa law also regulates the use of criminal history information by employers. Iowa Code § 692A.5(9) requires employers to certify, on a form provided by the Iowa Department of Public Safety, that it will not use criminal history information received under Iowa Code chapter 692 as a factor in employment decisions.
Iowa law also prohibits employers from soliciting or considering an individual’s arrest record or non-conviction data for employment purposes. Iowa Code § 216.7(13). "Arrest record" means any record of unlawful act that, upon conviction, results in the imposition or execution of a sentence. "Non-conviction data" means information maintained within the jurisdiction’s criminal history records repository relating to an accusation of unlawful act for which there has been no conviction. Employers can, however, consider employee criminal convictions as long as the convictions "relate to the duties and responsibilities of the position." Iowa Code § 692.9(1)(c). In addition, where criminal convictions are deemed a job-related qualification, employers must consider the time elapsed since the offense, the seriousness of the offense and the rehabilitation of the individual in determining whether to hire that individual. It is important to remember that these provisions limit how information from consumer reporting agencies may be used by employers. These provisions do not limit other sources of information employers may use to make employment decisions.
Correcting and Challenges Background Check Mistakes
Individuals who wish to challenge and correct errors on a background check report in Iowa have the right to do so under the Fair Credit Reporting Act (FCRA) as well. However, under Iowa Code § 91D.4, an individual must first notify the provider of the background check report of the alleged inaccurate information in the report by filing a challenge with the provider no more than 30 days after receiving notice of their report. Accordingly, if a consumer wishes to challenge and correct a background check report before their records are accepted, the challenge must typically be completed prior to receiving a copy of the report. Therefore, an individual must act quickly, as often the background check report is provided to the end user before a consumer can file and received a copy of their report; which would then allow them to identify any errors that may be present in the report. If an employer fails to provide a consumer notice that a background report has been performed, then the 30-day time limit for a challenge does not apply and the consumer may challenge the accuracy of any findings in the report whenever they learn of the inaccuracies. Regardless of whether and when a consumer receives notice of their report and challenges any inaccuracies, a background check reporting agency that is challenged or disputes the accuracy of a background check report must conduct a reasonable reinvestigation to verify the accuracy of the challenged information and provide a free copy of the report to the consumer.
Recent Developments and Changes in Iowa Background Check Laws
Enacted on March 30, 2018, H.F. 2156 introduced fifteen new code sections to the Iowa Code prohibiting employment discrimination based on a person’s criminal record. These new provisions come on the heels of a 2015 bill passed in Iowa City, imposing a "ban the box" requirement on employers in that city, which was later challenged but ultimately upheld by the Iowa Supreme Court.
H.F. 2156 applies to "all public and private employers" in Iowa, including individuals, corporations, partnerships, educational institutions, other organizations, the state of Iowa and its agencies, and municipalities. Unlike the 2015 ban the box bill, H.F. 2156 does not limit its application to any particular size or type of employer. It applies immediately, though employers will have until July 1, 2019 to comply with the new notice and recordkeeping requirements.
Under H.F. 2156, employers may not require an applicant for employment to disclose a criminal record before the applicant has been given notice that an in-person interview has been offered or a conditional offer of employment has been made, whichever comes first. Employers may still inquire whether an applicant is subject to any pending criminal charges and maintain a record of this inquiry.
The law precludes employers from taking an adverse action against an applicant or employee based on a conviction, unless it results in a manifest risk to the health or safety of individuals under the employer’s care, or at other worksites. While the new law "does not require an employer to delay or discontinue any business activity or reduce its workforce," it remains unclear whether employers will be required to conduct individualized assessments in deciding whether to disqualify applicants based on their convictions . One of the law’s sponsors claimed these provisions are aimed at protecting people with restraining orders or those seeking expungement of past convictions, but this is not stated in the law itself.
Importantly, H.F. 2156 also applies to public sector employers in Iowa, both in their hiring practices and in their use of independent contractors. These restrictions reach all persons employed by the state of Iowa or its subdivisions who have the power to enter into contracts or take employment actions.
In addition to "ban the box" provisions, the new law creates recordkeeping and notice obligations for Iowa employers. Employers must preserve and maintain employee applications and personnel records for a minimum of three years. Employers must also provide the applicant or employee with free copies upon request. Employers may charge an applicant or employee a reasonable charge to cover the cost of reproducing the records.
Employers must also post a notice to applicants or employees regarding their right to file a complaint of a violation of H.F. 2156 with the Iowa Civil Rights Commission (ICRC). The ICRC is the agency that receives and processes complaints of employment discrimination. Employers must also post a notice and information regarding the enforcement powers of the ICRC. Both notices must be posted in every place of business where applications for employment are accepted or processed.
All employers must train employees who have responsibility for making employment decisions on H.F. 2156’s requirements. The ICRC also has an independent obligation to educate employers regarding these new requirements.