Employee Background Check Laws in Hawaii

The Fair Credit Reporting Act (FCRA), 15 U.S.C. § 1681 et seq., is the primary federal law governing background checks used in employment decisions. Under the FCRA, employers must obtain written authorization from job applicants before ordering a background check, and the authorization must be clear and conspicuous. The employer must also inform the applicant of their right to dispute the accuracy of information in the report.

The FCRA applies to all employers that use background checks, regardless of size. The law covers not only criminal records but also credit reports, eviction history, and other consumer reports obtained from third-party background screening companies. Before taking adverse action based on information in a background report—such as rejecting an applicant or terminating an employee—the employer must provide the applicant with a pre-adverse action notice that includes a copy of the report and a summary of the applicant's rights under the FCRA.

After taking adverse action, the employer must provide a final adverse action notice that includes the name, address, and phone number of the background screening company, disclosure that the company did not make the employment decision, and notification of the applicant's right to dispute the report with the screening company. The EEOC and the Federal Trade Commission (FTC) enforce the FCRA. Applicants can sue employers for violations of the FCRA and recover actual damages, statutory damages up to $1,000 per violation, attorney's fees, and costs.

Hawaii does not have a separate state law specifically regulating background checks in employment. Employers in Hawaii are governed solely by the Fair Credit Reporting Act and its federal requirements. However, Hawaii law does regulate private investigators under Hawaii Revised Statutes § 486-128, which requires that anyone conducting investigations for compensation must be licensed as a private investigator. This means that if an employer hires a third-party agency to conduct background checks, that agency must comply with Hawaii's private investigator licensing requirements in addition to the FCRA.

Because Hawaii has no state-specific background check statute, there are no provisions that strengthen or weaken the FCRA's requirements in Hawaii. All employers in Hawaii—whether they employ one person or thousands—must follow the same FCRA procedures: obtain written consent, disclose the results, and provide proper adverse action notice. There are no state-law carve-outs for small employers, nonprofit organizations, or any other category of employer.

Hawaii employers cannot impose their own requirements that exceed or contradict the FCRA. For example, an employer cannot require an applicant to waive their right to dispute a background report, conduct a background check without written authorization, or fail to provide required notices. Since Hawaii has no statutory exceptions or additional protections beyond the FCRA, applicants in Hawaii rely entirely on federal law for remedies. If an employer violates the FCRA in Hawaii, the applicant can file a complaint with the FTC or pursue a private lawsuit in federal court for actual damages, statutory damages, and attorney's fees.

The FCRA contains several important exceptions that limit when background checks can be used in employment decisions. First, the FCRA does not apply to employers conducting background checks solely for their own internal use without relying on a third-party consumer reporting agency; however, if an employer uses a third party, the FCRA applies. Second, some information is prohibited from being reported at all: bankruptcy must be removed from reports after 10 years, civil suits and judgments after 7 years, arrests without conviction after 7 years, and delinquent accounts after 7 years (with limited exceptions).

Third, certain positions may be exempt from some FCRA restrictions. For example, employers seeking consumer reports for positions involving access to financial information, national security, or law enforcement may have broader authorization requirements. Additionally, some states have carve-outs for certain government positions, but Hawaii does not have separate state exemptions.

Fourth, an employer is not liable under the FCRA for inaccurate information if the employer follows the adverse action procedures correctly, notifies the applicant, and the inaccuracy is the fault of the background screening company. However, the employer remains responsible for obtaining proper authorization and providing correct notices. If an employer fails to follow FCRA procedures—such as failing to obtain written consent or failing to provide required notices—the applicant can pursue a claim against the employer regardless of whether the background information was accurate. Hawaii's at-will employment rule does not protect employers from FCRA violations; compliance with the FCRA is a non-negotiable legal requirement.

Step 1: Document Everything. Keep a detailed record of all communications with the employer about the background check, including the job posting, any verbal promises about the process, emails or text messages, the original consent form you signed (or proof that you were never asked to sign one), and any notices you received from the employer or background screening company. Save copies of the actual background report if you obtained it, the adverse action notice, and any correspondence disputing information. Take screenshots of online applications and email confirmations. These documents are essential evidence if you later file a complaint or lawsuit.

Step 2: Dispute Inaccurate Information with the Background Screening Company. If you received an adverse action notice stating the employer will reject you based on background check information, carefully review the report for errors. Common mistakes include confusion with someone else's record, outdated information, or mischaracterization of prior convictions. Contact the background screening company (the notice will include their name and phone number) and dispute any inaccurate information in writing. Send your dispute by certified mail or email so you have proof of delivery. The company must reinvestigate your dispute within 5 business days and respond to you. If they correct the information, they must notify the employer.

Step 3: File a Complaint with the FTC. If the employer violated the FCRA—for example, by failing to obtain your written consent, failing to provide pre-adverse action notice, or failing to provide a final adverse action notice with proper information—you can file a complaint with the Federal Trade Commission. Go to reportfraud.ftc.gov or call 1-877-438-4338. Provide detailed information about what the employer did, when it happened, the employer's name and contact information, and copies of any documents. The FTC does not investigate individual complaints in the same way as a state agency, but complaints help the FTC identify patterns of violations and may trigger enforcement action. Filing an FTC complaint creates an official record but does not directly compensate you.

Step 4: Consult an Attorney and Consider a Private Lawsuit. FCRA violations are best addressed through a private lawsuit in federal court, not through government agencies. Contact an employment law attorney licensed in Hawaii who has experience with FCRA claims. Many attorneys offer free or low-cost initial consultations. If you have a strong case—clear violation of FCRA procedures, inaccurate background information that caused you tangible harm—the attorney can file a lawsuit against the employer and/or the background screening company. Under the FCRA, you can recover actual damages (such as lost wages if you were not hired), statutory damages of up to $1,000 per violation, punitive damages in cases of willful violation, and attorney's fees and costs. Some FCRA violations (like failing to provide required notices) are per-violation damages, meaning each missing notice could result in separate damages.

Step 5: Understand the Timeline and Process. The federal court process typically takes 6-18 months from filing to settlement or judgment. During discovery, the employer will produce documents, including your application, the authorization form (or lack thereof), the background report, and all notices sent to you. Both sides will exchange written questions and may conduct depositions. Many FCRA cases settle before trial because the violations are often clear-cut. If your case goes to trial, the court will decide whether the employer violated the FCRA and award damages accordingly. Even if the employer disputes the facts, FCRA violations are often straightforward to prove because they involve documented procedures.