Understanding FCRA rules for employment screening
We are often asked about the legal rules and regulations involved in beginning employee
background checks. Here we attempt to explain some of the basics involved, in particular
the Fair Credit Reporting Act. Disclaimer: We are not lawyers and specific
situations may vary. Please consult with your attorney before implementing any
screening program.
The federal rules regarding employment screening are contained in the Fair Credit
Reporting Act. At a minimum, your screening program must conform to these rules.
(State-specific rules may also apply. The FCRA has two primary goals with respect to
employment:
Ensuring that people are explicitly notified, and agree to, any background checks that are
done, and allowing people to correct any misinformation before any decisions are made
by the employer. Job candidates must sign a release form agreeing to permit a
background check before it is performed. The most common background checks are
criminal record checks, credit reports, and driving records. The release form must
provide “clear and conspicuous” disclosure, which is generally interpreted as requiring a
separate page rather than burying it in the rest of the job application.
What happens if they are not willing to sign? You cannot perform the background check
in that case…but you are not required to hire them, either. It is very important that you
have a consistent policy on this to avoid any charges of discrimination.
If you find out information in the course of doing the background check that causes you
to take adverse action against the candidate, certain rules must be followed. Adverse
action can be broadly defined — failure to hire, termination, decision not to promote, and
so on. It is best to err on the side of caution here. If the report will cause you to treat the
candidate or employee in any negative way, adverse action rules apply.
For adverse action, the employer must do the following:
Before taking the adverse action, give the individual a copy of their report and a copy of
the Summary of Your Rights Under the FCRA (PDF reader required).
After taking the adverse action, you must tell the individual that adverse action has been
taken. This notice must include contact information for the consumer reporting agency
(CRA) that provided the report, and a statement that the CRA cannot explain why the
adverse action was taken. You must also tell them they have the right to dispute the facts
in the report, and that they are entitled to an additional free copy of their report from the
CRA for the next 60 days.
An excellent summary of rules for employers using background checks is available at the
http://www.ftc.gov/bcp/menus/consumer/credit/rights.shtm
We are often asked about the legal rules and regulations involved in beginning employee
background checks. Here we attempt to explain some of the basics involved, in particular
the Fair Credit Reporting Act. Disclaimer: We are not lawyers and specific
situations may vary. Please consult with your attorney before implementing any
screening program.
The federal rules regarding employment screening are contained in the Fair Credit
Reporting Act. At a minimum, your screening program must conform to these rules.
(State-specific rules may also apply. The FCRA has two primary goals with respect to
employment:
Ensuring that people are explicitly notified, and agree to, any background checks that are
done, and allowing people to correct any misinformation before any decisions are made
by the employer. Job candidates must sign a release form agreeing to permit a
background check before it is performed. The most common background checks are
criminal record checks, credit reports, and driving records. The release form must
provide “clear and conspicuous” disclosure, which is generally interpreted as requiring a
separate page rather than burying it in the rest of the job application.
What happens if they are not willing to sign? You cannot perform the background check
in that case…but you are not required to hire them, either. It is very important that you
have a consistent policy on this to avoid any charges of discrimination.
If you find out information in the course of doing the background check that causes you
to take adverse action against the candidate, certain rules must be followed. Adverse
action can be broadly defined — failure to hire, termination, decision not to promote, and
so on. It is best to err on the side of caution here. If the report will cause you to treat the
candidate or employee in any negative way, adverse action rules apply.
For adverse action, the employer must do the following:
Before taking the adverse action, give the individual a copy of their report and a copy of
the Summary of Your Rights Under the FCRA (PDF reader required).
After taking the adverse action, you must tell the individual that adverse action has been
taken. This notice must include contact information for the consumer reporting agency
(CRA) that provided the report, and a statement that the CRA cannot explain why the
adverse action was taken. You must also tell them they have the right to dispute the facts
in the report, and that they are entitled to an additional free copy of their report from the
CRA for the next 60 days.
An excellent summary of rules for employers using background checks is available at the
http://www.ftc.gov/bcp/menus/consumer/credit/rights.shtm
| Understanding HIPAA rules for background screening Likewise we are asked how criminal background screening is affected by the new HIPAA guidelines. Here are a few resources for you. HIPAA Law Summary of Administrative Simplification Provisions Clarification of HIPAA Administrative Simplification Compliance Act Things to think about if you are a Health Care provider: Data Privacy Data Breach Response Unsafe working conditions Badge Access Violations Critical Infrastructure Protection Threats of Violence Loss Prevention Theft Drug/Alcohol Abuse Things to think about if you are an employer Consumer Credit Protection Act (CCPA) Executive Order 11246 Fair Labor Standards Act (FLSA) Family and Medical Leave Act (FMLA) Health Insurance Portability and Accountability Act (HIPAA). Immigration and Nationality Act (INA) Labor-Management Reporting and Disclosure Act (LMRDA) Migrant and Seasonal Agricultural Worker Protection Act (MSPA) Occupational Safety and Health (OSH) Act Rehabilitation Act of 1973, Section 503 Uniformed Services Employment and Reemployment Rights Act (USERRA) Walsh-Healey Public Contracts Act (PCA) Worker Adjustment and Retraining Notification Act (WARN) Things to think about if you are a small business Human Resources Services Payroll administration HR Compliance Risk Management Workers Compensation Benefits Insurance Medical Life Business Professional Liability Compliance Red Flags for any business offering credit terms HIPAA and COBRA for benefits coordinators HIPAA and ARRA for health care providers, IT, health insurance agencies, medical billing and coding companies, medical software providers, and any other practice or business associate. |
| There is an easy way to get the information you need to make your hiring decisions. A simple, affordable criminal background search is now available. Information On Demand, Inc. performs criminal background searches on the national, state and county level. Services also include credit reports, employment, education, and social number |
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| Information on Demand, Inc. Post Office Box 757, Blairsville GA 30514 Tel: 706.781.3554 Fax: 706.781.3808/3907 Email: informationondemand@windstream.net |
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