When you use a background screening company to check applicants or employees, the Fair Credit Reporting Act (FCRA) applies. FCRA violations can lead to costly lawsuits, including class actions. Here are the key steps every employer should know.
Step 1: Provide a standalone disclosure
Before ordering a background check, you must give the applicant a clear written disclosure that a consumer report may be obtained for employment purposes. The disclosure should be in a document that consists solely of the disclosure. Avoid adding extra language, such as liability waivers, which has been the subject of litigation.
Step 2: Get written authorization
The applicant must authorize the background check in writing. Electronic signatures are commonly used.
Step 3: Certify compliance to your screening company
Employers certify to the screening company that they will follow FCRA requirements, including the adverse action process and equal employment opportunity laws.
Step 4: Pre-adverse action notice
If you’re considering not hiring someone, or taking other adverse action, based in whole or in part on the background report, you must first send a pre-adverse action notice. It includes:
- A copy of the background report
- A copy of “A Summary of Your Rights Under the Fair Credit Reporting Act”
This gives the applicant a chance to review the report and dispute errors.
Step 5: Wait a reasonable period
Give the applicant a reasonable amount of time to respond before making a final decision. Many employers wait at least five business days.
Step 6: Adverse action notice
If you proceed with the adverse decision, send an adverse action notice that includes information about the screening company, a statement that the screening company did not make the decision, and notice of the applicant’s right to dispute the report and to request a free copy within 60 days.
State and local laws
Some states and cities add requirements, such as additional notices, timing rules, or restrictions on using certain records. Review the laws where you hire.
Elite Services helps you stay compliant
Elite Services Workplace Screening provides background searches nationwide with electronic waiver links that make the disclosure and authorization process simple. This article is general information; consult your legal counsel for advice on your specific situation.
Ready to protect your workplace? Elite Services Workplace Screening provides nationwide drug testing, DOT compliance, background searches, MVRs, and E-Verify. Call 888-738-9297 or contact us online to get started.
This article is for general information only and is not legal advice. Laws and regulations change; consult qualified counsel about your specific situation.