The Seven Year Reporting Rule: ‘To Report or Not to Report’ That is the Question?

Authored By W.Barry Nixon, SHRM- CMP

With more and more private investigators conducting background checks, it is important to understand the seven-year reporting rule and the details regarding when the clock starts ticking after a conviction and prison time.

According to the Fair Credit Reporting Act, unless the individual is reasonably expected to earn more than $75,000, there is specific information that cannot be included in a background investigative report, including: Bankruptcy cases that antedate the report by more than 10 years; civil suits, civil judgments and records of arrest that antedate the report by more than seven years; paid tax liens that antedate the report by more than seven years; accounts placed for collection or charged to profit and loss, which antedate the report by more than seven years; and any other adverse item of information that antedates the report by more than seven years.

In 2003, the FCRA was amended to allow the reporting of conviction information without limitation in civil suits, civil judgments and records of arrest, as well as other adverse information, however arrest records may not be reported beyond seven years, bearing in mind the $75,000 income rule.

A case in the ninth circuit Moran v. The Screening Pros LLC (Case no. 12-57246) is an example of when information can be reported. The lower court ruled that the records were reportable for seven years starting at the date of the disposition, release or parole, however, the question before the Ninth Circuit is the premise that the lower court based its decision on a paragraph that was removed from the FCRA in 1998.

It should also be considered that 11 states also have seven-year reporting rules. California, Montana and Nevada prohibit the reporting of convictions where the date of conviction, release from parole or completion of probation precedes the report by more than seven years. California also prohibits the reporting of misdemeanor convictions where probation has been completed and misdemeanor marijuana possession convictions that are more than two years old. Hawaii prohibits the reporting of conviction information where the date of conviction, release from parole or completion of probation preceded the report by more than 10 years, while others prohibit the reporting by more than seven years unless the individual is expected to earn more than the threshold annual salary.

Massachusetts also prohibits the porting of a misdemeanor conviction where the date precedes the report by more than five years, unless the individual has another conviction without in the five years immediately preceding the inquiry, as well as the reporting of misdemeanor convictions for simple assault, disturbing the peace, affray and public drunkenness.

Some states also prohibit the reporting of other non-criminal information beyond certain time limits. California, for instance, limits the reporting of bankruptcies that antedate the report by more than 10 years, suits that predate the report by more than seven years and any other adverse information that antedates the report by more than seven years.

And still other states limit the reporting of information, unless the individual is reasonably expected to earn more than a certain income level, from $20,000 to $75,000, based upon the state. Bear in mind, however, that, in order to be incompliance with FCRA regulations, an individual’s annual income must be $75,000, regardless of the state.

It is important to also consider cases in which an individual has successfully completed a diversion program or received a deferred adjudication subject to the successful completion of the terms of probation. The state of Georgia prohibits reporting of arrests where the individual has been released under the Georgia first offender law, while Michigan prohibits the reporting of misdemeanor reports unless the case is pending or there has been a conviction.

Post By Barry Nixon (66 Posts)

W. Barry NIxon, SHRM-CMP is the founder of PreemploymentDirectory.com, the publisher of The Background Buzz, The Global Background Screener, The Annual Background Screening Industry Resource Guide and In Search of Excellence in Background Screening: Insights from Accredited Background Screening Firms. He is co-author of Background Investigations: Managing Hiring Risk from an HR and Security Perspective, a recognized background screening expert and serves as an International Ambassador for the National Association for Professional Background Screeners.