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.shtmc
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.shtmc
Understanding HIPAA
Likewise we are asked how criminal background screening is affected by the new HIPAA guidelines. To learn more about HIPPAA Compliance
please click on the link below.
Compliance Guidelines
Likewise we are asked how criminal background screening is affected by the new HIPAA guidelines. To learn more about HIPPAA Compliance
please click on the link below.
Compliance Guidelines
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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: infoondemand@windstream.net |
| 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, E-Verify, and social security number verifications. |
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