FCRA Requirements for Background Checks in 6 Steps

Create FCRA compliant employment screening policies for your business

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In addition to reviewing relevant state laws and consulting with legal counsel, use these six steps to create compliant employment screening policies for your business.


Provide Disclosure and Get Consent

Before starting a background check with a consumer reporting agency (CRA), employers must get a candidate’s (or existing employee’s) written authorization and receive acknowledgement that the background check may be used as a basis for employment decisions, such as hiring, promotion, or retention.

TIP: GoodHire’s integrated, mobile-optimized electronic consent avoids candidate confusion, speeds up turnaround times, and minimizes litigation risk.


Use A Consumer Reporting Agency (CRA)

Provide candidate information to a compliant CRA and they will begin collecting and preparing the results. Depending on the CRA used, the background check may include criminal records, civil judgments, credit history, and other personal information on public record.

TIP: Secure collection and management of a candidate’s personal information presents real challenges and data privacy risk. GoodHire’s candidate self-complete flow ensures the highest standards of accuracy without compromising candidate privacy.


Share Results With The Candidate

Once the background check results are ready, a copy will be returned to the employer and, if requested, to the candidate. If the candidate disputes any records in the results, the CRA can reinvestigate the records and provide updated results to both employer and candidate.

TIP: GoodHire automatically provides every candidate with their own results through a secure, online account - for free. With such early access, candidates can review results quickly, reducing hiring delays and helping you make better, more informed hiring decisions.


Review Results Within EEOC Guidance

Any hiring policy that disproportionately screens out minorities, including policies that ban employment of people with criminal records that are not job-related or consistent with business necessity, may automatically be considered in violation of the Equal Employment Opportunity Commission’s (EEOC) guidance and requirements under Title VII of the Civil Rights Act of 1964.

TIP: Beyond the legal necessity of new ban-the-box and other fair hiring laws, GoodHire is the only employment screening company to offer candidates the ability to add comments directly into their background check. The context helps you make an informed, individualized assessment as required by the Equal Employment Opportunity Commission.


If you’re confused by overlapping ban-the-box, FCRA, and EEOC requirements, you’re not alone.



Follow Adverse Action Process

If an employer decides not to hire or promote a candidate or to terminate an employee, based in whole or in part on a background check, the employer must follow an Adverse Action process. This process may also be called Pre-Adverse Action, Preliminary Adverse Action, or First Notice.

TIP: GoodHire’s automated and compliant Adverse Action process, including individualized assessment, targeted screens and adjudication guides you through the entire process. And, our dedicated US-based customer support team is available for both you and your candidates. Get our Adverse Action checklist here.


Finalize Hiring Decision

If an employer has followed all steps for conducting a background check, then a final employment decision, whether to hire, promote, or terminate, can be made. In instances when the decision is adverse, employers must send a notice, called Final Adverse Action, to the candidate or employee.

TIP: GoodHire’s compliance expertise is unparalleled. We distill FCRA, state, local, ban-the-box, fair hiring and EEOC regulations and guidelines into easy to follow, easy to understand tools and services.

Compliance can be tricky. Find out how we make it simple.