The Fair Credit Reporting Act (FCRA) and Background Checks- 28 Oct
The FCRA was created to help patrons resolve errors and dispute issues on their credit reports. It now covers several consumer reports, and it is critical that when conducting a background check, FCRA compliance is followed to a key. Failure to comply can end up costing your business a significant amount of money. Whenever a background check is called for on a potential employee, The FCRA regulations are in effect.
Protections provided by the FCRA to job candidates include:
- Background check requests must be disclosed to the applicant.
- The right to review any information obtained regarding their personal and financial situation
- The right to correct any errors their report might show
- The right to appeal decisions if the process seems unfair to the applicant
There are several more protections in place. Therefore, it’s critical before the background check takes place. Complying with the FRCA requires the employer to run background checks that are fair and accurate to the consumer. Let’s take a look at what is required to provide to the applicant in each step: before requesting a background check, before taking any action on results, and after taking action:
- Provide a notice that outlines the process of the background check to the applicant. You’re also required to disclose that information from their report may be used for employment offers. Likewise, the information must be provided separately to the applicant. It needs to be a stand-alone notification and not as part of the employment application.
- Ensure that the applicant gives written permission to acquire their consumer report.
Before taking adverse action:
- If the report disqualifies an applicant, you must provide a notice with a copy of the report used in determining the hiring decision.
- Provide them with A Summary of Your Rights Under the Fair Credit Reporting Act
- Provide them a reasonable amount of time to either confirm or dispute the findings of the report
After taking adverse action:
- Provide them information on the Consumer Reporting Agency that processed the report
- Statement showing the background screening service didn’t make the decision, nor can they give any specifics regarding the decision.
- Inform them of the free report from the company if requested within 60 days
Following these steps isn’t a complete guarantee of avoiding an infraction, though it is a good starting point. Be sure to familiarize yourself with the rules and regulations in your area. Certainly, please feel free to contact us with any questions you may have.