Privacy is Reshaping Background Screening: What Employers Need to Know

From coast to coast, states are strengthening privacy protections within the employer screening process, and the pace is not slowing. New York’s upcoming State Senate bill S03072 and South Carolina’s S0126 are two recent examples of how lawmakers are rethinking how sensitive personal information can be accessed, used, and shared.

For employers, these are not just routine legislative updates. They are clear signals of where background screening regulations are headed and what it will take to maintain a compliant and resilient screening program in the years ahead.

New York Joins the Growing List of Credit History Restrictions

With the passage of Bill S03072, New York becomes the 11th state to restrict an employer’s use of consumer credit history in hiring decisions.

The state now joins California, Colorado, Connecticut, Hawaii, Illinois, Maryland, Nevada, Oregon, Vermont, and Washington in limiting how this information can be used.

Under the new law, employers will no longer be permitted to consider an applicant’s consumer credit history when making employment decisions. The law also extends to consumer reporting agencies, prohibiting the inclusion of credit score information in employment background checks altogether.

This shift reflects a broader trend toward minimizing the use of financial data that may not be directly related to job performance while reinforcing the importance of fair and equitable hiring practices.

South Carolina Focuses on Identity Protection Through Redaction

South Carolina’s S0126 introduces a different but equally impactful change. The law allows the Administrative Office of the Courts to redact address history from public records in an effort to reduce the risk of identity theft.

South Carolina already limits identifying information by providing only a year of birth match, which can present challenges for consumer reporting agencies striving to meet strict accuracy and reporting standards. The addition of address redaction further underscores the state’s commitment to privacy but also requires thoughtful process adjustments to maintain reporting precision.

At TEAM, accuracy is non negotiable. To ensure reliable reporting, we have partnered closely with our South Carolina vendors to adapt our workflows. When an address is redacted on a potential case match, we run a South Carolina SLED Search through the South Carolina Law Enforcement Division to obtain additional permissible personally identifiable information. This added step allows us to confidently confirm a reportable match while staying fully aligned with state requirements.

What This Means for Employers in 2026 and Beyond

As we move further into 2026, one thing is clear. The regulatory landscape surrounding background screening will continue to evolve quickly and thoughtfully. Laws like New York’s S03072 and South Carolina’s S0126 demonstrate how states are advancing privacy protections while reshaping the types of data consumer reporting agencies can access and report.

TEAM will continue to monitor emerging legislation, including expanding ban the box measures, potential changes to reporting scope, and new or evolving expungement requirements. Our goal is to ensure our clients remain informed, compliant, and supported without sacrificing accuracy or efficiency.

By staying proactive, adaptable, and informed, employers can navigate these changes with confidence and uphold screening programs that are responsible, fair, and built for the future.