A number of states regulate the use of credit checks for job applicants. However, currently the federal law provides very strict requirements that in most cases will provide more protection for employees than the state laws do. Therefore, if you follow the federal rules, you'll generally be in compliance with your state law as well.
Having said that, here's a summary of the current state law provisions:
Arizona. An employer who denies employment, a promotion, retention as an employee, or does or does not reassign the consumer to the consumer's detriment, must disclose the name and address of any consumer reporting agency that furnished a consumer credit report that was used in making the decision.
California. California requires that employers that request a consumer credit report for employment purposes give the individual being investigated written notice and an option to request a copy of the report. If the employer denies the individual a job based wholly or in part on the credit report, the employer must give the individual the name of the credit reporting agency that prepared the report.
Colorado. A job applicant must first be informed that a credit report may be requested in connection with his or her application for employment and must consent in writing to it.
Kansas, Maryland, Missouri, Montana, New Hampshire, and Rhode Island. Whenever a user of a consumer credit report denies employment, the user must advise the consumer of the adverse action and supply the name and address of the agency supplying the report.
Louisiana. Any consumer who is denied credit, insurance, or employment on the whole or partial basis of information provided by a credit reporting agency shall be entitled to a copy of his credit report without charge, provided that he requests such report in writing from the agency within sixty days of being denied credit by a third party. The third party shall upon request by the consumer provide the name of the credit reporting agency which provided information used in the credit denial decision.
Maine. A person may not procure a consumer report or cause a consumer report to be procured for employment purposes with respect to any consumer, unless:
Massachusetts. If an adverse employment action is taken based on a consumer credit report, the user must notify the consumer within 10 days, disclose the name, address, and telephone number of the credit reporting agency, and tell the consumer that a free copy of the report can be obtained within 60 days.
In using a consumer report for employment purposes, before taking any adverse action based in whole or in part on the report, the person intending to take the adverse action must provide to the consumer to whom the report relates a copy of the report and a written description of the consumer's rights.
Minnesota. Employers may not use consumer reports in Minnesota for making any employment decisions, unless they have clearly and accurately disclosed to an applicant or employee that a consumer report may be obtained. Disclosure must inform the applicant or employee in writing of the right to request additional information on the nature of the report and, when investigative consumer reports are involved, indicate that the report may include character and reputation information obtained through personal interviews. Written disclosure must be provided before a report is ordered.
If an applicant or employee wants a copy of the report, the order must include a request that a free copy, including a statement of the right to dispute and correct the report, be sent to the consumer within 24 hours of sending it to the employer.
When written employment applications are used, the disclosure statement must accompany the application and must include a box that the applicant can check to obtain a copy of the report.
When adverse employment action is taken based on a report, the employer must advise the employee or applicant. If the employee or applicant has not already received a report, the employer must notify the employee or applicant of the right to receive a copy of the report, the right to dispute and correct errors and the name and address of the consumer reporting agency.
The law does not cover consumer reports used for employment purposes for which the employee or applicant has not specifically applied.
New Jersey. In using a consumer report for employment purposes, before taking any adverse action based in whole or in part on the report, the person intending to take an adverse action must provide to the consumer to whom the report relates: (1) a copy of the report; and (2) a description in writing of the rights of the consumer under the New Jersey law and the federal Fair Credit Reporting Act.
New York. Credit checks may not be used for employment purposes unless the applicant is first informed in writing or in the same manner in which the application is made that a credit report may be requested in connection with the application, that the applicant, upon request, will be informed whether or not a report was requested, and that, if this information is requested, the applicant will be informed of the name and address of the consumer reporting agency furnishing the report.
Vermont. An employer must obtain written permission before obtaining a consumer credit report.
Washington. A report may not be procured for employment purposes
unless a clear and conspicuous disclosure has been made in writing that a report
may be obtained, or the consumer authorizes the procurement of the report. In
using a consumer report for employment purposes, before taking any adverse
action based in whole or in part on the report, a person shall provide to the
consumer to whom the report relates the name, address, and telephone number of
the agency, a description of the consumer's rights under the Act, and a
reasonable opportunity to response to any information in the report that is
disputed by the consumer.