If a company requests a credit check or criminal history check on applicants for employment, it must comply with the Fair Credit Reporting Act, “FCRA,” if that information is obtained from a Consumer Reporting Agency. (Any person which for monetary fees regularly engages in the practice of assembling or evaluating consumer credit or other information for the purpose of furnishing consumer reports to third parties)
STEPS FOR EMPLOYER TO COMPLY WITH FCRA
- DISCLOSURE AND AUTHORIZATION: Must provide a clear and conspicuous written disclosure on a document consisting solely of the disclosure that a consumer report may be obtained for employment purposes, and the applicant must authorize the employer to obtain such a report.
- CERTIFICATION TO THE CRA: Must provide a Certification to the CRA that the employer is requesting the information for employment purposes; has provided the disclosure and received the authorization; will provide the applicant/employee with a copy of the report and will not take any adverse action before providing the applicant/employee with a notice of their rights under the FCRA before taking any adverse action based in whole or in part upon the report; and will not use the report in violation of EEO laws.
- PRE-ADVERSE ACTION DISCLOSURE: Before taking any adverse action based in whole or in part on information contained in a report, the employer must provide a copy of the report to the applicant, along with a description in writing of the applicant’s rights under the Act (this should be provided to the employer by the consumer reporting agency with the report). Wait at least 5 business days before proceeding to Step 4.
- ADVERSE ACTION NOTICE: After taking the adverse action the employer must provide a second separate notice including: the nature of the adverse action based on the consumer report; name, address, and toll free telephone number of the consumer reporting agency; a statement that the consumer reporting agency did not make the adverse decision and cannot explain it; a statement setting forth the applicant’s right to obtain a free disclosure of the applicant’s file with the consumer reporting agency, if requested within 60 days of notice of the adverse action; and a statement regarding the applicant’s right to dispute the accuracy or completeness of the report directly with the consumer reporting agency.
While compliance appears relatively easy, it is not. There have been numerous FCRA lawsuits filed against employers in recent years: many for highly technical violations. We can help you assess whether your applicant screening process is in accord with the requirements.