Indiana Employment Background Screening Laws in 2025: A Comprehensive Guide
Understanding Indiana’s Background Check Landscape
Indiana employers face evolving legal requirements for background checks in 2025. Consequently, compliance is crucial to avoid lawsuits.
This guide explains current screening laws clearly. You’ll discover criminal history limits, ban-the-box rules, and AI considerations.
Moreover, we include official government sources for accuracy. Always consult legal counsel for specific situations.
Using Criminal Offenses in Hiring Decisions
Indiana law allows employers to consider criminal convictions when hiring. However, there’s no strict time limit on how far back convictions can be used. Unlike some states with seven-year lookback periods, Indiana permits lifelong criminal history reviews unless records are sealed or expunged.
Employers must follow the Fair Credit Reporting Act (FCRA), ensuring accuracy and applicant consent. The Equal Employment Opportunity Commission (EEOC) advises a “nature-time-nature” test: evaluate the offense’s nature, time elapsed, and job relevance. For example, a recent theft conviction may disqualify a cashier but not a warehouse worker.
Sealed or expunged records are off-limits. Applicants can legally deny such records exist. Violating this risks fines up to $1,000.
Indiana has specific laws and procedures for criminal background checks, which vary depending on the purpose (such as professional licensing, employment in certain fields, or working with children).
Key Points:
- Professional Licensing: Many professions require a national criminal history background check when applying for an initial license. This is done after submitting your application, and fingerprints are required. The check is processed by the Indiana State Police and the FBI. Renewal applications usually do not require a new check. More details and instructions are available from the Indiana Professional Licensing Agency (IPLA).
- Working with Children (DCS): The Department of Child Services (DCS) requires fingerprint-based national and state criminal history checks, Child Protective Services (CPS) history checks, and sex offender registry checks for anyone working with or around children under DCS supervision. More information is available on the DCS background checks page.
- Home Health Agencies: Owners and employees of home health agencies must have a national or expanded criminal history check. Certain convictions (such as rape, exploitation of an endangered adult, or recent theft) disqualify individuals from operating or working in these agencies. The law requires a lifetime search, not limited by years. See the Indiana Department of Health’s guidance.
For more details, always refer to the specific agency or licensing board listed below relevant to your situation.
Citations:
- https://www.in.gov/pla/professions/criminal-background-checks/
- https://www.in.gov/dcs/background-checks/
- https://www.in.gov/health/files/Criminal_History_Checks.pdf
- https://www.in.gov/ai/appfiles/isp-lch/
- Indiana does have laws related to expungement, which allow certain criminal records to be sealed or expunged under specific conditions.
Ban-the-Box Laws in Indiana
Indiana’s approach to ban-the-box laws is unique. In 2017, Senate Bill 312 prohibited local municipalities from enacting stricter ban-the-box rules than state or federal law. This ensures uniform regulations statewide. However, an executive order applies ban-the-box to Indiana’s Executive Branch. Public sector employers cannot ask about criminal history on initial applications. Inquiries are allowed post-interview or after a conditional offer.
No municipalities in Indiana have ban-the-box laws due to the state’s preemption. Previously, cities like Indianapolis had such ordinances, but these were nullified in 2017. Private employers face no ban-the-box restrictions but must avoid sealed record inquiries
Key Points of Indiana’s Ban-the-Box
- Applies only to Executive Branch public sector jobs.
- Prohibits criminal history questions on initial applications.
- Allows inquiries after interviews or conditional offers.
- Local ban-the-box laws are prohibited statewide.
- Indianapolis: Prohibits city contractors from asking about criminal history early. Applies to vendors with $50k+ contracts. Delays inquiries until conditional offers.
Restrictions on the Use of Employment Credit Reports
Employers in Indiana can generally use credit reports for employment decisions. However, they must comply with the FCRA. The FCRA mandates employer obligations when using consumer reports.
- Consent: Employers must notify applicants in writing. They also need written authorization before a credit check.
- Adverse Action Process: If adverse information in a credit report leads to a hiring denial, employers must follow a process. A pre-adverse action notice must be sent. This includes a report copy and rights summary. A reasonable time must be given for response. Finally, a final adverse action notice must be issued.
- Seven-Year Rule: The FCRA applies a seven-year restriction. This covers negative credit information, liens, lawsuits, judgments, and bankruptcies. This rule applies to jobs paying less than $75,000 annually. For positions paying $75,000 or more, these restrictions generally do not apply.
Employers must avoid discrimination when using credit reports. They cannot selectively apply credit checks based on protected characteristics.
The Use of AI for Employment Background Checks in 2025
While no specific Indiana law directly regulates AI in background checks, existing privacy laws apply. The FCRA also governs consumer reports. Employers using AI tools for hiring must ensure data accuracy.
They must also inform candidates about screening processes. Employers should develop clear policies for AI use. They should also implement robust cybersecurity measures. Regular employee training on AI use and data privacy is also crucial.Artificial intelligence tools face new scrutiny in 2025.
Notably, EEOC guidelines target algorithmic discrimination. Systems analyzing criminal records require validation studies. Otherwise, they risk biased outcomes. Consequently, employers must audit AI tools frequently.
For example, ensure algorithms don’t disproportionately exclude protected groups. Additionally, provide human review options. Moreover, disclose AI usage to applicants transparently. Indiana hasn’t passed specific AI laws yet. However, federal enforcement is increasing rapidly.
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Indiana Employer’s Best Practices Summary
- Review job applications for prohibited criminal history questions
- Conduct individualized assessments for criminal records
- Follow FCRA disclosure and authorization requirements
- Limit credit checks to financially relevant positions
- Validate AI tools for discriminatory impacts annually
- Document all screening decisions consistently
Case Law Snippets
While not Indiana-specific, this case impacted nationwide practices. The EEOC sued Freeman for rejecting applicants based on credit and criminal checks, alleging racial discrimination. The court ruled in Freeman’s favor, finding insufficient evidence of disparate impact. However, it emphasized the need for job-relevant screening criteria. Indiana employers should heed this to avoid similar lawsuits.
An applicant sued after being denied a teaching position due to a background check revealing an expunged record. The court found the employer violated Indiana’s expungement law by considering sealed records. This underscores the importance of respecting sealed records in hiring.
An employee was fired after a background check revealed a recent misdemeanor. The plaintiff claimed the employer failed to follow FCRA’s adverse action process. The court sided with the employee, awarding damages for non-compliance. Employers must provide proper notice and documentation.
Conclusion
Indiana background check compliance requires vigilance in 2025. While state laws remain limited, federal rules dominate significantly. Employers must balance safety with fairness carefully. Consequently, develop standardized screening protocols. Furthermore, train HR teams continuously. Remember that litigation risks continue evolving. Therefore, consult employment attorneys regularly. Finally, prioritize transparency with applicants throughout the process.
Disclaimer: This content is for informational purposes only and does not constitute legal advice. Consult with qualified legal counsel regarding specific compliance questions.