Employee Background Check Laws in Michigan

Michigan enforces background check requirements through two primary mechanisms: the Fair Credit Reporting Act (which applies federally) and Michigan's Consumer Protection Act, MCL 445.901 et seq., which provides additional protections. Michigan does not have a separate standalone background check disclosure law, but employers must still comply with all FCRA requirements. Additionally, Michigan MCL 37.2205 (the Michigan Opportunity to Compete Act) prohibits employers from making hiring decisions based solely on an applicant's criminal history without individualized assessment; employers must consider the nature and severity of the offense, time elapsed since conviction, and job-related duties. This creates a conviction-based hiring standard stricter than federal law in some respects. Michigan's Consumer Protection Act (MCL 445.903) prohibits unfair, unconscionable, and deceptive methods, acts, or practices in trade or commerce, which extends to background check procedures that mislead or fail to disclose material terms.

Michigan employers are covered if they use any third-party consumer reporting agency to obtain background information. The state does not carve out small employers—the law applies to all employers regardless of size. Michigan's protections are comparable to federal law on notice and disclosure but stronger on conviction-based hiring decisions because MCL 37.2205 requires individualized assessment rather than blanket policies. Private employers cannot request or use expunged records, and employers must follow strict timing and notice procedures under FCRA. Remedies under Michigan law include complaints filed with the Michigan Department of Attorney General, civil lawsuits under the Consumer Protection Act, and FCRA damages if a third-party CRA is involved.

The FCRA contains several narrow exceptions that apply in Michigan: (1) background checks conducted by the employer internally using only information the employer already possesses do not trigger FCRA compliance if no third-party CRA is involved, though the employer must still provide notice to the applicant and document compliance with MCL 37.2205; (2) employers conducting background checks for positions involving access to sensitive information (financial institutions, law enforcement, national security) may have modified notice and dispute procedures under FCRA 15 U.S.C. § 1681b(b); (3) certain public records exceptions allow background check companies to report conviction information that remains on public record, but Michigan MCL 37.2205 still requires individualized assessment regardless of public availability.

Michigan courts have recognized that employers have legitimate business reasons to screen out applicants with certain criminal histories, particularly for positions involving safety, trust, or access to vulnerable populations. However, MCL 37.2205 requires employers to document the business justification for excluding someone based on criminal history and consider alternatives. A key exception is that the law does not prevent employers from screening based on criminal conduct that directly relates to job duties (e.g., prohibiting hiring a violent felon as a school bus driver). Additionally, if an applicant voluntarily discloses criminal history and the employer bases a decision on independently verified public records during an FCRA-compliant background check, the employer has stronger legal ground, though individualized assessment is still required. Union contracts and collective bargaining agreements may impose additional requirements beyond the minimum.

Step 1 — Document Everything: Keep detailed records of all background check authorization forms (original signed documents or emails), copies of reports obtained, dates of receipt, any disputes filed with the background check company, correspondence with the applicant regarding adverse actions, and the business justification for any hiring decision based on conviction history. Save all communication electronically and in hard copy. If the employer states they did not conduct a background check, document that explicitly.

Step 2 — Internal Complaint Process: Before filing with an external agency, send a written complaint to the employer's HR or legal department, clearly stating that background check procedures violated FCRA requirements or MCL 37.2205 (e.g., no written authorization, no adverse action notice, blanket conviction policy without individualized assessment). Request a response within 10 business days. This creates a paper trail and may result in corrective action. If the employer is small and has no formal HR, send the complaint to the owner or manager in writing via email or certified mail.

Step 3 — File with the State or Federal Agency: For FCRA violations involving a third-party CRA, file a complaint with the Consumer Financial Protection Bureau (CFPB) at www.consumerfinance.gov/complaint (online form, no filing fee). For violations of MCL 37.2205 (conviction-based hiring discrimination), file a complaint with the Michigan Department of Attorney General, Consumer Protection Division, at www.michigan.gov/ag (mail to: Consumer Protection Division, 670 Law Building, Lansing, MI 48913, or call 517-335-7659). For intentional discrimination based on criminal history intersecting with race or national origin, also file with the EEOC at www.eeoc.gov or the Michigan Department of Civil Rights (MDCR) at www.michigan.gov/mdcr (717 West Milwaukee Street, Detroit, MI 48202, phone 313-456-3700). Deadline: FCRA claims have a 2-year statute of limitations (3 years for willful violations); CFPB complaints should be filed within 60 days of the violation, though no strict deadline applies.

Step 4 — Investigation Process: Once a complaint is filed, the CFPB or MDCR will send the employer a copy and request a response (typically 30 days). An investigator may contact you for clarification or additional documentation. The process typically takes 60-180 days. If the agency finds probable cause, it may pursue enforcement action against the employer or the CRA. For FCRA disputes, you can also file a civil lawsuit directly in Michigan state court or federal court within the statute of limitations; you do not need to exhaust administrative remedies first.

Step 5 — Consult an Attorney: Contact a Michigan employment law attorney specializing in FCRA claims or consumer protection law as soon as you discover the violation, especially if the background check resulted in a denied job offer, termination, or other material harm. Many attorneys offer free consultations. An attorney can: review the background report for inaccuracies, assess damages, demand written corrections, and file civil litigation if the employer or CRA does not remedy the violation. Look for attorneys through the State Bar of Michigan (www.michbar.org) or local legal aid societies.