2024 saw several noteworthy regulatory developments affecting the ways U.S. employers hire and background screen their candidates. Now that 2025 is here, HR professionals are working to stay on top of evolving regulatory changes.
So, what do HR and compliance teams need to know about these new employment laws and best practices? What are the most impactful compliance trends to be aware of in order to help your organization mitigate risk in 2025?
HR Compliance Topics that Shaped 2024
Two important compliance trends that emerged last year focused on preventing employment discrimination against applicants with a criminal history. These trends introduced employer requirements for candidate notice and individualized assessments before disqualifying candidates based on criminal records. Currently active at the state and local levels, these policy models are referred to as “Ban the Box” and “Fair Chance” legislation.
Ban the Box
Ban the Box is a policy model composed of legislative initiatives enacted to help remove stigmas affecting people with a criminal past. These laws require employers to remove the checkbox asking about criminal history from job applications. These laws typically require an employer to first consider an applicant’s qualifications before inquiring about criminal history. Questions are deferred until after the application process, interview, or conditional offer.
Ban the Box laws are impacting how employers hire and conduct background screening. Since a majority of states and many other cities and counties have adopted some form of Ban the Box, private employers across the U.S. are now striving to comply.
An emerging trend is the expansion of these laws, with jurisdictions adding stricter requirements.
Fair Chance
Similar to Ban the Box, Fair Chance is another legislative model intended to de-stigmatize applicants with a criminal history during the hiring process. Fair Chance laws at the state and local level have recently created new employer requirements for notice and individualized assessment.
As with Ban the Box, Fair Chance laws mandate that employers must comply with specific anti-discrimination regulations in order to avoid biases in hiring.
Let’s examine some recent fair chance trends that may impact employers in 2025:
- Individualized assessments similar to Equal Employment Opportunity Commission (EEOC) guidelines that give candidates an opportunity to provide mitigating information
- Employers are also required to use specific forms/notices that may require information about the reason for potential disqualification.
- The introduction of adverse action notice and timing triggers. Note that these may be additional and/or different from the federal Fair Credit Reporting Act (FCRA) adverse action requirements.
- Timing changes mandating when exactly employers can conduct a background screening.
Compliance professionals need to stay updated on Ban the Box and Fair Chance legislation wherever applicable to their background screening processes. Especially be sure to monitor laws on the state and local levels which may affect your background screening policies and procedures, while also regularly reviewing said policies and procedures.
Drug Screening Regulations
Employers with a policy to drug screen candidates in 2025 must remember that drug screening is a complex area of employment law. Therefore, it is recommended to periodically review your drug screening policies in light of any new regulations in state or local law.
Much of the focus continues to be on marijuana. Here’s a quick legislative recap of major developments at the federal and state levels:
- Federal law: Marijuana remains a controlled Schedule I substance per federal law.
- State law: Many states are continuing to legalize or decriminalize marijuana for medical and adult recreational uses.
The proliferation of so many different state laws now pose legal issues for employers, especially given that more states are enacting employment protections preventing employers from screening for (or discriminating against) off-duty drug use.
Any prospective provider should also be able to inform you of any drug screening laws which might have been updated since originally enacted, and which could impact your hiring program.
As always, be sure to consult with your legal counsel to determine if your background screening programs and your drug screening policies are compliant with current laws.
Regulatory Trends to Watch in 2025
Leveraging AI and Automation Tools in Hiring Decisions
Why is AI gaining more and more attention from federal and state regulators?
Federal laws and initiatives focused on AI and automated employment decisions tools (AEDTs) are gaining traction as the government addresses this technology’s potential for bias and discrimination when making hiring decisions.
While AI-based tools can improve efficiency in the hiring and onboarding process, they may also (unintentionally) pose a compliance risk of introducing discrimination and bias into these processes, which (even when AI is used), also involve human decision-making.
Employers can reduce their risk of claims related to use of AI by having clear AI policies and by thoroughly vetting any AI tools used in hiring for potential bias. Partnering with a trusted screening provider can help to support this initiative.
Summing Up
If you’re a U.S. employer or HR compliance professional, it’s important to be aware of evolving compliance trends, consult with your legal counsel and adjust your background screening programs accordingly.
This article is provided by our friends at First Advantage. Customers of 501 benefit from the background screening services of First Advantage.
Please note: Neither 501(c) Services nor First Advantage are law firms. The material available in this publication is for informational purposes only and nothing contained in it should be construed as legal advice. We encourage you to consult with your legal counsel to obtain a legal opinion specific to your needs.
(Images by: Thapanastudio from Mike-Shots)
