2026 Background Screening Compliance Updates Every HR Director Should Know

As HR leaders, you know that compliance surprises aren’t just inconvenient, they also risk lawsuits, fines, and damage to your employer brand. That’s why our 2026 round-up zeroes-in on the critical state changes impacting background screening, and what you should be doing now to stay ahead.

What’s Changing (and What to Do About It)

1) ‌Virginia’s Clean Slate / Record-Sealing Law — Effective July 1, 2026

Starting July 1, 2026, Virginia will roll out its sweeping record-sealing law (“Clean Slate”), which means many past convictions will no longer be visible in most employment background checks.

Why it matters for HR

• A candidate may show up with a “no record” result where previously one would have seen convictions.
• Screening vendors must suppress sealed records and update workflows accordingly.
• Your adjudication policies may need tightening: avoid using sealed convictions in hiring decisions.

Action items

• Review your screening vendor’s methodology for Virginia searches: does it automatically omit sealed records?
• Update your hiring policy and training to reflect that certain records previously visible may now be sealed and not reportable.
• Ensure your adverse-action process (if you go that route) doesn’t reference sealed records you weren’t permitted to see.

2) ‌Washington State’s Amended Fair Chance Act — Phased in Starting July 1, 2026 (for 15+ employees) / Jan 1, 2027 (for smaller employers)

With HB 1747, Washington significantly tightens how and when criminal-history background checks can be used. Employers with 15+ employees must comply beginning July 1, 2026.

Key changes

• You cannot ask about or request criminal history until after a conditional job offer is extended.
• You cannot take an adverse employment action based on an arrest record or juvenile conviction.
• For adult convictions, you must demonstrate a legitimate business reason, and you must allow the applicant time to respond and provide mitigating evidence.
• The law expands penalties: up to $1,500 first violation, more for repeat violations.

Why it matters

• Your hiring workflow in Washington can no longer look like “screen early, filter out many.” The screening must be post-offer (conditional).
• Background screening vendors and your ATS must support this workflow change.
• If you operate nationally, you must ensure WA-specific flows don’t contaminate other states.

Action items

• Audit your ATS, job applications, and screening process in Washington: ensure no pre-offer criminal history inquiry.
• Work with your screening vendor to insert a “conditional offer” trigger before presenting the criminal-history report.
• Train managers and recruiters in Washington: they must not ask about criminal history too early and must follow the required two-business-day review window if you intend to take adverse action.

3) Consumer-Data Privacy Laws Expanding — Affecting Candidate Data

While not strictly “background screening only,” it’s critical: new state consumer-data-protection laws place obligations on how you collect, use, share, delete candidate/screening data.

• In 2026, for example, the Indiana Consumer Data Protection Act goes into effect January 1, 2026.
• Similarly, the Kentucky Consumer Data Protection Act also takes effect January 1, 2026.

Why it matters

•  If you (or your screening vendor) act as “controllers” or “processors” of candidate screening data, you’ll need to meet new notices, deletion/access rights, and contract requirements.
• Non-compliance opens you up to privacy risk beyond just background-screening law.

Action items

• Review your candidate privacy notice: ensure it covers screening data, sharing with third-party CRA, rights of access/deletion.
• Verify your data-retention policy: old candidate/screening records must be purged as appropriate.

4) Federal Baseline Still Applies — Fair Credit Reporting Act (FCRA)

While states are layering on change, the federal FCRA remains your foundational compliance requirement: permissible purpose, disclosure/consent, accuracy, the two-step adverse action process, etc.

Why it matters

• State laws don’t replace the FCRA; instead, they add restrictions or timing changes.
• Your screening vendor must be FCRA-compliant and also able to adapt to state-specific rules.

Action items

• Don’t assume “state law change = you can skip FCRA steps.” Continue to provide the required disclosures, get written consent, send pre-adverse/adverse notices, etc.
• Make sure your vendor documents compliance across jurisdictions (federal + state).
• For each state you hire in, maintain a compliance matrix: FCRA + state law(s) + local ordinances.

Why Partnering with OneSource Screening Puts You Ahead

2026 it’s bringing many incremental but meaningful shifts in how background screening must be handled. HR leaders should take note of the following:

• Don’t assume “we’ve always done it this way” will fly any longer.
• Work with a screening partner like OneSource that knows the jurisdiction-by-jurisdiction variation.
• Build your hiring and screening policy as a living document that gets updated as laws change.

Taking a few steps now can save you headaches later. If you’d like to review how these updates affect your team, let’s connect.