A person who is arrested and later has the charges against him dropped does not have the record of his arrest disappear. In truth, the arrest remains a matter of public record. This can affect his current and future employment in a number of different ways. While it can cost him a job, in other cases it may have no effect. Nor will an employee necessarily learn about the arrest.
When a person has the charges against him dropped, it means that the government has declined to prosecute him in a court of law. However, while the public record will show that the case against the individual did not proceed -- implying that he was innocent or that there was not enough evidence to press charges -- this will not remove the record of his arrest.
If a person's current employer finds out that he was arrested, it will depend on the employer's policies, and on his employment contract, as to whether or not the person will be dismissed. In some cases, particularly if the employee is working at-will -- meaning without a contract that guarantees him employment -- an employer will have wide discretion to fire the person. However, in other cases, a person's employment contract will guarantee him employment, even after an arrest.
When a person is applying for a job, he may be asked whether he has ever been arrested and charged with a crime. The person is legally required to respond truthfully, even if the charges were dropped -- which could jeopardize unemployment. In addition, many professional societies that grant employment license selectively -- such as the bar association, which allows lawyers to practice -- may deny you a license based on an arrest.
Although a record of a person's arrest is public record, you can, in some cases, petition to have the public record of your arrest sealed or expunged. This means that your record is no longer a matter of public record. In addition, you will not be required to say that you were arrested if an employer asks you during employment or during a job interview.