Understanding the FCRA from an Employer’s Perspective

The Fair Credit Reporting Act houses some of the most vital regulations for employers utilizing a third party background check company. It has specific mandates that ensure that applicants receive fair treatment and have a say in the screening process. Although despite its importance, employers have been making some pretty big FCRA blunders in 2014.

This year alone there have been 27 nationwide FCRA class action lawsuits filed against employers, 12 of which were filed in just a two month period during June and July. Needless to say, having the specific requirements of the FCRA fresh in the minds of employers and human resource departments is a must to avoid the legal implications of failing to follow the FCRA regulations. 

FCRA Document

Beyond reading the whole document, which isn’t entirely necessary as it relates mostly to credit reporting and borrowing, here are some of the basic and most important guidelines to be aware of when approaching hiring and an applicant’s rights in respect to the FCRA. 

1. Employee Notice and Authorization

Before beginning the background check process, every employer must obtain an applicant’s consent to be screened. This is done through a form which contains either a digital or physical signature from the applicant, it is known through HireSafe as the Release Authorization and Intent to Verify form. This document also ensures that the applicant is aware of his or her rights within the screening process. These rights relate to being able to obtain a consumer copy of the background check report and be involved in the adverse action process if there are any criminal records and/or other information discovered that could disqualify the applicant from employment. 

2. Employer Certification

The employer must then certify to the consumer reporting agency that they have provided the applicant with the necessary notices and disclosures with their written permission to obtain the background report. The employer also must certify the applicant is aware that the background screening report’s intended use is for employment purposes.

3. Notice of Proposed Adverse Employment Action 

If an employer decides to not hire an applicant after the background check process has been completed it is absolutely essential the Adverse Action is followed. Adverse action allows an applicant to dispute any potential criminal records displayed on their report. After a 5-10 business day period if the applicant has not refuted the criminal records, the final adverse action process is followed, stating the applicant is not to be hired.

Fun Fact: One of the most notable companies currently in court for not following the adverse action process is Disney.

While the FCRA can appear to be an overwhelming document at times, how much of it relates to employers utilizing a third party background screening company is quite miniscule. In fact, this shouldn’t be a problem at all if the background check provider instructs their clients properly in following all the necessary steps and procedures. HireSafe prides itself on ensuring their client’s safety when using its services and remaining FCRA compliant. If ever you have any questions on how to approach hiring and the FCRA, please do not hesitate to call.

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