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How Long Must I Keep Employee Background Check Records?

Tammy Cohen, PHR, SHRM-CP
February 10 2016
Some sources say 5 years, others say longer. In our current legal landscape, it’s all about interpretation of the law, which can be vague. As a leading provider of professional background checks for more than 26 years, here’s our take: 6 years.

Why a 6-Year Retention?

The statute of limitation for federal FCRA claims is 2 years after a consumer learns of a violation, or 5 years after the violation occurs in cases where the consumer had no way to know a violation occurred. Therefore, an applicant or employee has between 2 and 5 years from the date of the alleged violation to file a claim of FCRA violation.

If a background check is alleged to have contributed to a violation, the statute of limitations may begin from the date the background check was ordered through the date the background check was completed and/or delivered. Depending on how long an end user takes to make a decision, the statute can extend for several weeks or months after completion/delivery of a consumer report.

While 5 years is the suggested retention period, the chance for a different interpretation of when the retention period began could prolong the statute. Industry best practice for third party screening providers should be to keep all background check records, whether paper or electronic, for approximately 6 years after initial ordering.

Records to retain in a consumer background check file can include:

  • Applicant resume
  • Application for employment
  • Background check forms completed and / or signed by applicant, such as authorization and disclosure
  • Completed background check report
  • All communications pertaining to background check and hiring decision
  • Adverse action notices
  • Communications pertaining to applicant background check dispute

Why Must I Retain Background Check Data at All?

 

The Fair Credit Reporting Act (FCRA) functions mainly to protect consumers from inaccurate reporting or use of their personal records. Many more protections exist for the consumer than for information furnishers, Consumer Reporting Agencies (CRAs), resellers, and end users, which is why your background check policies and procedures must keep the protection of the consumer in mind.

Alleged FCRA violations are often filed on behalf of consumers who have suffered negative employment consequences, such as refusal to hire or termination. The Equal Employment Opportunity Commission (EEOC) and the Federal Trade Commission (FTC) have published guidance to aid employers and CRAs in permissible use of consumer information, but alleged violations proliferate.

Common claims of FCRA violation include:

  • Accuracy claim: a consumer report is inaccurate.
  • Reinvestigation claim: a consumer filed a dispute and the reporting agency failed to fix the inaccuracy or conduct a reinvestigation in a timely manner.
  • Disclosure and authorization claim: improper disclosure or authorization forms was used to obtain a consumer report.
  • Adverse action claim: adverse action procedures were followed improperly or not at all.
  • Reinvestigation claim: a reinvestigation was conducted improperly or not at all.

This broad range of possible legal action combined with a lengthy statute of limitations provides plenty of opportunity for lawyers to find and/or interpret a claim of violation. Based on the successful settlement of legal action against hiring and/or employment practices over the last several years, this trend can be expected to continue.

The Retention Benefit to Using a Professional Background Screener

Professional, accredited screeners like InfoMart retain records digitally so that your consumer reports are available 24/7 through our WebASAP portal. We can integrate with your existing ATS/HRIS so you can pull the information from your own system whenever you need it. Experienced customer service representatives are also available 14 hours daily in case you need any assistance.

 

How do you protect sensitive information?

About Tammy Cohen

Tammy Cohen, an industry pioneer and expert in identity and employment screening, founded InfoMart 30 years ago. Deemed the “Queen of Screen,” she’s been a force behind industry-leading innovations. She was most recently the first-to-market with a fully compliant sanctions search, as well as a suite of identity services that modernizes talent onboarding. Tammy revolutionized the screening industry when she stepped into the field, developing the first client-facing application and a due diligence criminal search that has since become standard for all background screening companies. Cohen has received national awards and honors for her business and civic involvement, including Atlanta Business Chronicle’s Top 25 Women-Owned Firms in Atlanta, Enterprising Women Magazine’s Enterprising Women of the Year award, the YWCA of Northwest Georgia’s Kathryn Woods Racial Justice Award, and a commendation in the 152nd Congressional Record. To learn more about Tammy, visit www.tammycohen.com.

About InfoMart

InfoMart has been revolutionizing the global background and identity screening industry for 30 years, providing businesses the information they need to make informed hiring decisions. They develop innovative technology that modernizes talent onboarding, including a first-to-market biometric identity authentication application and a verified sanctions search. The WBENC-certified company is a founding member of the Professional Background Screening Association, and they have achieved PBSA accreditation in recognition of their consistent business practices and commitment to compliance with the FCRA. The company is dedicated to customer service, speed, and accuracy, and it has been recognized for its success, workplace culture, and corporate citizenship with over 45 industry awards. To Get the Whole Story on InfoMart, please visit www.InfoMart-USA.com, follow @InfoMartUSA, or call (770) 984-2727.

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