Employers which conduct background checks for personnel-related decisions must ensure that these checks comply with the Fair Credit Reporting Act (FCRA) as well as all applicable discrimination laws.
Employers conduct background checks for potential employees for a variety of reasons, such as to learn about professional/financial history, criminal history, or education, and anytime an employer accesses an applicant’s background information (including credit information) as part of the screening process, it must ensure full compliance with all applicable laws including the FCRA and laws enforced by the Equal Employment Opportunity Commission (EEOC).
Here are some FCRA regulations for employers which obtain background information from companies which compile and provide it:
- The employer must inform the applicant that his/her background information may be used for the employer’s hiring decision, and it must be in a written and “stand-alone” format.
- An employer which intends to obtain an “investigate report” about an applicant must inform the applicant of his/her right to a description of the investigation’s nature and scope.
- The employer must certify to the company which provided the applicant’s background information that the employer: notified the applicant and obtained his/her permission to receive a background report; complied with all FCRA regulations; and did not discriminate against the applicant or misuse the information in a way which violates any state or federal equal opportunity laws or regulations.