3 Regulatory Trends That Will Define Retail Background Checks in 2024

Running background checks has never been straightforward in the retail industry, and 2024 will be no exception. Employers nationwide will continue to face an ever-changing landscape of laws and regulations that will require both vigilance and foresight to navigate with confidence.

Proceeding without attentiveness and care is likely to result in complications for even the most compliant of yesteryear’s policies; it's now, as always, in every retailer’s best interest to remain thoroughly informed about the latest developments in background-check legislation.

While monitoring such developments is an ongoing task, the three trends listed below are indications of where employers ought to be looking as they approach this year. These are areas that show signs of significant change in the coming months, and which are likely to have noteworthy impacts on the background screening process.

Keeping a close eye on these trends will not only safeguard retailers from being blindsided, but will provide them with direction as they plan and adapt their background-check policies for the year to come.

1. Marijuana Laws

Unsurprisingly, increasing regulations on marijuana screening will remain a strong trend for 2024. As more states legalize recreational use — Minnesota and Ohio being the most recent — regulations on testing for, inquiring about, and considering marijuana usage for employment will no doubt follow suit.

States where such changes have already taken place are also likely to implement new, more progressive regulations. Both California and Washington saw new laws take effect on Jan. 1 restricting employers from considering pre-employment records of usage — including criminal records in California — as well as any off-duty use. Others may well follow in their footsteps.

2. Privacy Laws

The varied restrictions on marijuana screening discussed above are just one example of the highly disparate laws that govern background checks across state lines, with privacy regulations serving as another notable instance. Since no federal privacy act exists, legislation on the matter varies widely from state to state.

2024 will see that particular problem become even more complex, as the states of Washington, Texas, Oregon, Florida, and Montana are all set to implement new privacy laws that will limit the use of human resource data. As the year progresses, therefore, many retailers may need to adapt and revise how such information is used.

3. AI Limitations

As the use of artificial intelligence (AI) for efficient hiring becomes more commonplace, state legislators are introducing regulations aimed at protecting applicants from discriminatory software. These laws limit the use of “decision-making” AI in particular by providing guidelines for what AI tools can consider when furthering or denying an application.

Certain states, such as New York, have already put regulations in place that require any such decision-making tools used in human resources to undergo a bias audit. As AI remains a relatively new territory, retailers will do well to be especially attentive to legal developments in this area.

Conclusion

With a pulse on these three indicators discussed above, retailers will be able to follow the developments of the coming year as they unfurl. Those that do so, and adapt along the way, will screen and hire with full confidence that the law, in all its complexity and caprice, is on their side.

Jeff Ernste is chief sales and marketing officer with Minneapolis-based Orange Tree Employment Screening, a technology-driven services company in the background screening industry.