If your company requests background checks on prospective employee’s, your practices are probably governed by the Fair Credit Reporting Act (FCRA). Compliance with the FCRA requires firms to make certain disclosures and more importantly obtain authorization from the prospective employee. Some common examples of background checks that fall under the FCRA, include credit checks, criminal record checks and motor vehicle reports.
According to the Federal Trade Commission (FTC) employers should:
- Before obtaining a background screening report about a prospective employee, disclose to the person that you intend to obtain the report and get written authorization.
- If the background screening report reveals something that may cause you to decide not to hire the person, you must notify them of the results of the report and provide them with a copy. Next, you must give them sufficient time to review the report so they may challenge elements that might be incorrect.
- If you ultimately decide not to hire someone based in whole or in part on the contents of a background screening report, you must provide a notice to that person that states they weren’t hired due at least in part to the result of the background screening report.
According to FTC attorney, David Lincicum, “Under the FCRA, you must provide the prospective employee with a clear and conspicuous written disclosure that you plan to get a background screening report about them and you must get the person’s written authorization that gives you their permission to compile the report.” Lincicum continues you can put the required disclosure in one document, but make sure you use “clear wording that the prospective employee will understand.”
The FTC advises that employers keep forms simple. Some additional tips include:
- Don’t include language that claims to release you from liability for conducting, obtaining, or using the background screening report.
- Don’t include a certification by the prospective employee that all information in his or her job application is accurate.
- Delete any wording that purports to require the prospective employee to acknowledge that your hiring decisions are based on legitimate non-discriminatory reasons.
- Get rid of overly broad authorizations that permit the release of information that the FCRA doesn’t allow to be included in a background screening report – for example, bankruptcies that are more than 10 years old.
Superfluous or overly broad language can not only lead to FCRA violations, but may also make it harder for prospective employees to understand the purpose of the document.
For more information about the FCRA, visit the article on the FTC website.