The FCRA Way: 4 Steps to a Compliant Background Check
Background checks are common during the hiring process and appear straightforward, but the reality is that a compliant background check can be murky.
Frito-Lay, Walmart, and Delta Airlines have all settled employee lawsuits related to these companies’ employment background checks disclosure processes. Most recently, 7-Eleven agreed to pay out nearly $2 million because it violated the Fair Credit Reporting Act (FCRA) by not properly disclosing its consumer reporting practices to candidates.
These lawsuits are often why employer disclosure/notice forms contain confusing language or a lot of fine print. Plus, companies may tell applicants about the hiring decision before providing a copy of the report or the notice of their rights. To combat those common mistakes, we’ve put together some steps that will help you comply with the federal FCRA and Equal Employment Opportunity Commission (EEOC) requirements. Please keep in mind that your state may have additional requirements.
A few additional tips
- Use a separate form. Don’t put your notice/disclosure information in your employment application; use a separate form.
- Remember the EEOC. Use consistent evaluation standards with all applicants but be ready for sensitive issues to emerge from the reports. If reports reveal issues that occur among people who fall under state and federal protected classes (e.g., disabilities, race, color, age, national origin, sex, or religion), you need to ensure the applicant has had the opportunity to showcase their ability to do the job.
- Review your forms and processes with your legal team. It’s best to keep your notices simple and understandable.
- Provide some explanation and additional information in a rejection. When disclosing a rejection to a candidate, explain the report’s impact on your choice. Include the vendor name, contact info, disclaimer language, and their right to argue the report and request another one within 60 days.
- Train your HR colleagues and hiring managers. Review your processes with your hiring team(s) and specify when they should or should not be sending out job offers.
- Background check vendors. Third-party vendors are required to give applicants a copy of their background results upon request.
The quote, “With great power comes great responsibility,” seems like a good motto for background screening. They must be used wisely and judiciously. Outsmart potential problems by providing applicants with the proper notices, at the right times.
Additional Resources
