FCRA Background Check Compliance Guidelines
Here are 10 steps an employer must take to legally obtain a background report on an applicant/employee:
- Employer discloses in writing to applicant/employee that they will be the subject of a background report as part of the employment selection/promotion/retention process.
- Employer provides disclosure and obtains signed authorization for preparation of a background report from applicant/employee.
- Employer provides information about the applicant/employee to the background screening company (or Credit Reporting Agency, CRA under the FCRA) and requests background screening.
- Background screening company conducts the background checks requested by employer and prepares background report.
- Background screening company provides background report to the employer and, if requested by applicant/employee, provides a copy to applicant/employee.
- Employer reviews completed background report and determines if any information will adversely impact the employment decision. If no adverse impact results from information in the background report, the employer will proceed with other steps in the employment process.
NOTE: Steps 7-10 are used only when an employer is considering an adverse employment action.
- If employer is considering an adverse employment action based in whole or part on information in the background report, the employer must:
- Notify applicant/employee
- Provide a copy of the background report, and
- Provide “A Summary of Your Rights under the Fair Credit Reporting Act.” (This process is sometimes called “Pre-Adverse Action” or “Preliminary Adverse Action” or “First Notice.”)
- Applicant/employee contacts background screening company if s/he disputes any information in background report.
- Background screening company reinvestigates any disputed items of information and issues updated report to employer and applicant/employee.
- Employer reviews updated report and makes final employment decision. If the employment decision is adverse, a notice of adverse action is sent to applicant/ employee. (This process is sometimes called “Final Adverse Action.”)