How To Stay FCRA Compliant On Employer Background Checks
FCRA (Fair Credit Reporting Act) is a bit of a misnomer because it’s not limited to credit reports—it also covers other information employers want, including public records, employment, criminal records, sex offender registration, driving, and more.
It’s easiest to think of FCRA compliance as having four steps.
Step 1: Employer Certifications
Prior to providing a consumer report, employers must first certify to the CRA, in writing, that they will follow the FCRA rules concerning disclosure, authorization, notice and adverse action notices, and that they will not use information in violation of any state/federal discrimination law.
Typically, the CRA will provide such a form to the employer, Rosen notes.
Step 2: Disclosure and Authorization
Before obtaining any type of consumer report, an employer must:
- Make a clear and conspicuous disclaimer to an individual, in writing, in a standalone document (not as part of the employment application), that a consumer report may be obtained for employment purposes.
- Obtain the individual’s signed authorization to obtain the report.
You can combine the disclosure and the request for authorization, but you cannot put excessive language on the form that detracts from the clear meaning.
Prior to actually obtaining an investigative consumer report, and in addition to the requirements listed above, an employer must clearly and accurately disclose to an individual that the report may include in-depth information about his or her character, general reputation, personal characteristics, mode of living, criminal, driving and work history, etc.
This disclosure must:
- Be in writing,
- Be mailed or otherwise delivered to the individual no later than 3 days after the report was first requested, and
- Include a statement informing the individual of his or her right to request additional disclosures and to receive a written summary of legal rights.
If an individual does request additional information, an employer must mail or otherwise provide the information within 5 days of receipt of the written request, or the request date of the report, whichever is later.
Step 3: Adverse Action Letters
Prior to taking adverse action based in whole or in part on a Consumer Report, employers must provide applicants with copies of the report and a Summary of Rights.
- Employers must give the consumer (applicant) the same report the employer receives, whether written or oral.
- FCRA is silent on how long the employer must wait to raise an objection, but the best practice is to give the applicant a meaningful opportunity to review, reflect and object.
You can’t “just say no,” on the basis of the report because of the many possibilities of mistakes. For example:
- Stolen identity
- Mistaken identity
- The person didn’t know about the negative record and thus no chance to correct it
- The record is wrong
- There is confusion about the record
If the adverse action becomes final, a second letter is required under FCRA Section 615; This letter must provide, orally, in writing, or electronically, the following:
- Notice of the adverse action
- The name, address, and telephone number of the consumer reporting agency that provided the consumer report
- A statement that the consumer reporting agency did not make the adverse decision and cannot provide the individual with the specific reasons supporting the action
- Notice of the individual’s right to obtain a free copy of the consumer report (if the report is requested within 60 days of receiving notice of an adverse action, a consumer reporting agency must provide the report free of charge) and
- Notice of the individual’s right to dispute the accuracy or completeness of the information contained in the report.
Step 4. Follow State Rules
There are many state laws that have FCRA implications, and some are quite detailed. For example, in Massachusetts, the final adverse action letter must be in 10-point type minimum, be issued within 10 days, and use specified language. (And, of course, he says, California has numerous “only in California rules.”)
Here are the 20 states with their own FCRA-type rules:
- Arizona
- California
- Colorado
- Georgia
- Kansas
- Kentucky
- Minnesota
- Montana
- New Hampshire
- New Jersey
- New Mexico
- New York
- Louisiana
- Maine
- Maryland
- Massachusetts
- Oklahoma
- Rhode Island
- Texas
- Washington
Various states have special rules concerning:
- Disclosure form for consumer
- Rules for Investigative Consumer Reports
- Nature and Scope letter
- Disputed Accuracy procedures
- Timing and notice of reports
- Notification periods
- 7-year limit on criminal records
Some states limit employers from using arrests, such as: California, Hawaii, Illinois, Massachusetts, Michigan, Nevada, New York, Pennsylvania, Rhode Island, Utah Virginia, Washington, and Wisconsin.
Some states limit misdemeanors, such as: California, Hawaii, and Massachusetts.
Some states limit first offense records, records based upon a certain age (other than a seven year limit) or diversion/nonadjudication programs, such as: Georgia, Massachusetts, Hawaii, Illinois, and California.
Some states limit expunged or sealed records, such as: California, Colorado, Hawaii, Illinois, Ohio, Oklahoma, Oregon, Rhode Island, Texas, Virginia, Louisiana, Maryland, New Jersey, South Dakota, Utah, and Virginia.
Many states have rules reflecting EEOC guidelines—that arrest or conviction must have rational relationship to job given nature and gravity of the offense, nature of the job and age of offense.
What About Social Network Searches?
As for social network checks:
- Make it one of the last steps
- Make sure that someone does the checks according to a process
- Keep it behind a “Chinese Wall”; that is, don’t let the hiring manager be the one to do the search
- Make sure you have consent
Recruiting, interviewing and background checking—there’s a lot that can go wrong. How to get your supervisors and managers all doing it right?
Only one way—training.
Even with the best of intentions, your supervisors and managers will say something or do something that gets the company into hot water—unless they are trained. Unfortunately, up until now, training has been a real challenge—there’s such a load of extraneous planning, preparing, and tracking involved. But we’ve got good news—Barbelo Group have developed a unique new program that’s done all that work for you.
Email contact@barbelogroup.com for more information
