When candidates apply for a job, they expect a thorough screening process: interviews, reference checks, and often a formal background check. But can an employer require a job applicant to pay for their own background check?
The answer is more nuanced than a simple yes or no. It depends on state law, federal wage-and-hour rules, and how the background check is conducted.
Federal Law: No Direct Prohibition, but Important Limits
At the federal level, there is no law that explicitly prohibits an employer from requiring applicants to pay for a background check. The Fair Credit Reporting Act (FCRA) regulates how background checks must be conducted but it does not regulate who must pay for the screening.
However, the federal Fair Labor Standards Act (FLSA) does impose limitations once a person becomes an employee. Employers cannot deduct background check costs if doing so would reduce the individual’s pay below the minimum wage for that workweek. While this usually applies to employees, not applicants, it still influences how some states treat pre‑employment expenses.
State Laws: The Deciding Factor
State legislation determines whether an employer can charge job seekers for the cost of a background check. And many states say no. These include: California, Louisiana, Minnesota and Vermont.
In states without specific prohibitions, employers may legally require applicants to pay for background checks as long as the practice does not violate any other wage, consumer protection, or hiring transparency rules.
Should Employers Charge Applicants?
Even in states where charging applicants is legal, many employers avoid it for several reasons:
- Competitive Disadvantage
Requiring applicants to pay, especially lower‑wage candidates, may shrink an employer’s talent pool.
- Perception and Candidate Experience
Applicants may view the request as unfair or predatory, damaging employer reputation.
- Administrative Burden
Collecting fees, issuing reimbursements, and maintaining compliance increases operational complexity.
- Equity Concerns
Cost‑shifting disproportionately impacts economically vulnerable job seekers.
For these reasons, most employers see background check costs as part of doing business.
Disclaimer: This communication is for general informational purposes only and does not constitute legal advice. The summary provided in this alert does not, and cannot, cover in detail what employers need to know about the amendments to the Philadelphia Fair Chance Law or how to incorporate its requirements into their hiring process. No recipient should act or refrain from acting based on any information provided here without advice from a qualified attorney licensed in the applicable jurisdiction.