Written by: Kimberlynn Wilson
Legal Disclaimer: Validity Screening Solutions provides this material for educational and informational purposes only, and shall not be construed as legal advice, express or implied. For questions regarding your organization’s practices and compliance with applicable laws, please consult with your legal counsel.
The background screening legal environment experienced several notable changes during the summer and earlier in Q2. Regulatory agencies, state legislatures, and federal authorities introduced more stringent regulations that directly affect how organizations navigate their background check processes.
Below is a summary of recent legal developments that may impact how employers and consumer reporting agencies verify criminal history, credit history, and conduct drug testing.
More States and Municipalities Continue to Expand Fair Chance Laws
- San Francisco’s Amended Fair Chance Ordinance
- On July 10, 2026, San Francisco Mayor Daniel Lurie authorized a series of significant amendments to the city’s San Francisco Fair Chance Ordinance (FCO), which officially became effective on August 10, 2026.
- The revised ordinance applies to any employer operating or based in San Francisco with five or more employees worldwide. It also covers any worker who spends at least eight hours per week within city limits
- The amendments introduced additional obligations for employers, including firm timelines for adverse action, increased penalties for non-compliance, and restrictions on employers considering out-of-state criminal records for conduct that is lawful under California law.
- Read more here.
- Washington’s Amended Fair Chance Act
- As of July 1, 2026, employers with 15 or more employees will are prohibited from conducting criminal background checks until after a conditional job offer has been extended under Washington’s amended Fair Chance Act.
- Additionally, the law limits the ways in which information obtained from criminal background checks can be used. The law also introduces new obligations related to the pre-adverse and adverse action processes, including the need for a legitimate business reason before taking adverse employment actions, holding the job position open for two business days, and conducting a written assessment.
- Employers with fewer than 15 employees will be required to comply with the law beginning July 1, 2027. It is recommended Washington employers review their hiring policies and practices with qualified legal counsel to ensure compliance with the new obligations.
- Read more about the expanded law here.
- Georgia Seals First Offender Records
- Effective July 1, 2026, under HB162, Georgia courts will automatically seal and restrict eligible “first offender” records.
- Employers are expected to encounter fewer discrepancies between applicants’ “no conviction” disclosures and screening outcomes.
- Employers should continue evaluating candidates based on job-related factors, rehabilitation, and the nature of any conduct, rather than relying solely on criminal record information.
- Read more here.
Virginia’s Clean Slate Law and Record Sealing Notification Program
- Virginia’s clean slate law took effect July 1. The law introduces new processes for both automatic and petition-based criminal record sealing for eligible misdemeanor and felony convictions, traffic infractions, marijuana possession offenses, and certain misdemeanor and felony non-convictions (e.g., dismissals).
- The law also establishes the Business Screening Services Seal Order Notification Program requiring the Virginia State Police to send monthly sealing order copies to registered firms. These firms must promptly delete sealed records from their systems. Eligible registrants include background screening companies and other data providers. However, the registration requires a substantial annual fee of $30,000.
- Certain organizations are currently undertaking a legal effort to seek a reduction in the annual registration fee.
- Read more here.
New Background Check Requirements for Certain Healthcare Professions
- Georgia Physician Applicants Must Complete Fingerprint-Based Criminal Background Checks
- Georgia physician licensure rules that took effect on May 25, 2026, became mandatory as of July 1. Physician applicants are now required to complete fingerprint-based criminal background checks through the Georgia Crime Information Center and the FBI. The revised rules also specify the need for additional application documentation, including an affidavit and a Federation Credentials Verification Service report.
- Read more here.
- Louisiana Mandates Background Checks For Non-Licensed Individual Providing Health-Related Services
- House Bill 414 requires employers to perform criminal background and security checks prior to hiring non-licensed individuals providing health-related services. The legislation also restricts the employment of individuals with convictions for specific offenses, including both state and federal crimes committed outside of Louisiana.
- Current law already prohibits individuals with criminal convictions in the state from working in healthcare. Supporters stated that the bill promotes a fairer environment and helps safeguard older adults from potential exploitation.
- Read more here.
- Expanded Criminal Background Check Requirements for Physician Associates In Maine
- Maine has enhanced its criminal background check requirements for physician associates (PAs) in anticipation of the PA Licensure Compact. The Board of Licensure in Medicine began requiring background checks for initial PA applications starting in February 2026, and the requirement has been extended to license renewals for those expiring on or after May 31, 2026.
- A PA license will not be renewed until the necessary criminal background check results are received. Credentialing and HR teams should incorporate this additional processing step into their renewal timeline tracking.
- Read more here.
Restrictions on New York Credit Checks For Employment Purposes
- On April 18, 2026, New York’s credit check ban took effect. Employers operating in or hiring in New York cannot consider a job applicant’s or an employee’s creditworthiness in hiring or employment decisions. Under S3072, it is considered a discriminatory practice for an employer to inquire into or use a job applicant or employee’s credit history for employment purposes unless the employer or position qualifies for one of the law’s specified exceptions.
- This law does not supersede existing local laws that provide broader protections. S3072 also restricts consumer reporting agencies (i.e., background screening companies) from providing employers with consumer reports that include credit history information, unless the employer or position is exempt.
- Employers should review the law with qualified legal counsel and disclose any relevant exceptions to consumer reporting agencies to continue receiving credit history information.
- Read more about the credit check ban here.
Drug Testing and Marijuana Rescheduling Updates
- Maine’s Revised Workplace Substance Use Testing Law
- New provisions became effective on July 29, permitting drug testing based on reasonable suspicion of impairment, criteria-based testing, and random testing through neutral selection methods.
- Employers are responsible for ensuring that the testing facility and confirmation testing laboratory are capable of performing blood sample testing, and Medical Review Officers (MROs) are required to report test results to employers.
- Employers must provide employees and job applicants with a direct opportunity to challenge a “non-negative” result by discussing valid medical explanations with a Medical Review Officer (MRO).
- Additionally, employers may comply with the requirements governing drug testing facilities to be considered a qualified testing laboratory to collect samples from employees.
- Read more here.
- Oklahoma House Bill 3127: Mandatory Zero-Tolerance Drug and Alcohol Standard
- Effective November 1, 2026, Oklahoma’s House Bill 3127 implements a mandatory zero-tolerance policy regarding drug and alcohol use for employees in designated “safety-sensitive” roles.
- The law revises the definition of safety-sensitive roles by replacing the previous “reasonable belief” employer discretion with a specific, duty-based list of qualifying tasks.
- Employers are still prohibited from taking adverse action solely based on an individual’s possession of a medical marijuana license. However, they now have an expanded ability to address positive drug test results in accordance with any compliant written drug and alcohol testing policy, applicable to all roles, not limited to safety-sensitive positions.
- Read more here.
- Federal Marijuana Rescheduling
- The U.S. Department of Justice (DOJ) and the Drug Enforcement Administration (DEA) issued a final order (“the Order”) on April 22, 2026, rescheduling FDA-approved products containing marijuana and state-licensed medical marijuana from Schedule I to Schedule III.
- The Order does not legalize marijuana for recreational purposes, and it does not legalize marijuana for medicinal purposes in states where it remains unlawful. Additionally, the Order does not address workplace policies governing on or off-duty use.
- In a memo issued on May 15, 2026, the U.S. Department of Transportation (DOT) confirmed the DOJ’s Order does not alter federally mandated, safety-sensitive workplace regulations. The consumption of a state licensed marijuana product is not considered a “legitimate medical explanation” for a positive result on any DOT-required drug test.
- Formal administrative hearings were held from June 29 to July 15, 2026. The subsequent steps involve awaiting a recommended decision from the Administrative Law Judge, followed by the final ruling from the DEA.
- Read more here.
$100M FCRA Settlement Against Credit Reporting Agency
- Equifax has agreed to a $100 million settlement, which received preliminary court approval on August 17, 2026.
- The lawsuit alleged that between March 17 and April 8, 2022, Equifax violated the Fair Credit Reporting Act (FCRA) by unlawfully providing inaccurate consumer credit reports and attributes to third-party lenders, insurers, and other entities due to a coding error.
- The court will consider whether to grant final approval to the $100 million settlement at a hearing scheduled for January 22, 2027.
- Read more here.
As Q3 concludes, employers are encouraged to stay informed on legal developments and consider conducting a review of their background screening and drug testing procedures. Stay tuned next month for our blog on industry AI and privacy developments in 2024!
