FCRA Compliant Pre-Employment Background Checks
January 17 2023
In today’s market, running background checks on potential employees is considered a common and intelligent best practice. However, the process calls for careful consideration of many details. The FCRA (Fair Credit Reporting Act) has established guidelines that every business must follow during pre-employment screening. This guide discusses the basic details every Human Resources professional needs to know before running an FCRA compliant background check on a candidate.
What is an FCRA Compliant Background Check?
Though certain laws might differ across the nation, every background check is required to comply with the FCRA. This federal legislation was designed to promote fairness and accuracy and ensure privacy for data used by consumer reporting agencies.
To run an FCRA compliant background check, an employer must maintain a consistent background screening process that does not infringe upon any individual rights. This process can be broken down into four basic steps.
How to Run an FCRA Compliant Background Check
A company must ensure that any screens it conducts are for a permissible purpose. This is why you ask a consumer reporting agency (CRA), specifically a professional background screening company, to run the background check. According to FCRA section 604(a)(3), permissible purposes for which consumer reports are most commonly sought include purposes related to credit, employment, insurance, and rental housing. Typically, the screening of a candidate for a position or promotion at a company will fall under the category of “employment purposes.”
If an organization runs a background check for reasons that fall outside of the FCRA-established permissible purposes, it will be considered a violation of the FCRA, which can lead to costly legal action against the company and a damaged reputation. Employers must establish that their background checks are used for permissible purposes only and follow their established policies and procedures for every consumer report.
Step Two: Disclose Details
A company must disclose that they intend to run a background check before screening a candidate to remain FCRA compliant. It is a violation of the Fair Credit Reporting Act to run background checks on candidates without their knowledge. The employer must provide the disclosure form as a standalone document, written in a clear and concise manner. This document cannot include any superfluous information, including liability waivers, state-specific background check information, or anything else the employer might want to include. The form is so specific that the point size of the font is specified, so use great caution when adding or changing anything to this form, or avoid changing it altogether.
Step Three: Get Written Consent
In addition to disclosing the details of a background check, employers must receive written consent from the candidate that explicitly authorizes the employer to request the background check and acknowledges that the check will be conducted. This form must be a stand-alone form, completely separate from the disclosure mentioned in the previous section. Similar to the disclosure form, this document should not include a liability waiver. However, employers may include state-specific background check disclosures or information, an acknowledgement that they have received the Summary of Rights under the FCRA, and any demographic information that might be necessary to conduct the background check.
Step Four: Follow Adverse Action Process
If an employer decides not to hire an applicant due to information found on a background check report, they should follow the adverse action process.
The first step of this process is a pre-adverse action notification. In this notification, applicants must be informed that a company is considering not hiring them based on the results of an FCRA compliant background check.
While this communication can be written, verbal, or electronic, it should always include the name and contact information of the background screening company that conducted the check. It should also notify the candidate that the third-party screening vendor did not play a role in the decision-making process and does not know the reason for the decision. The candidate should then be informed that they have the right to dispute the report and the right to additional options depending on the local regulations that apply, such as fair chance hiring laws.
After the pre-adverse action notification has been sent, the employer must wait the requisite amount of time before making an employment decision. The amount of time is typically five days, but it varies based on the jurisdictions a company falls under. Once the proper amount of time has passed, the employer can proceed with their final employment decision. The company must send an adverse action notice to the applicant to communicate the hiring decision.
Screen Compliantly with an FCRA-Certified Background Check Company
Screening candidates in-house creates unnecessary complications for businesses that already have a lot on their plates. That’s why InfoMart, a PBSA-accredited background screening organization, has dedicated over 30 years to developing background checks that you can trust. Our team of FCRA-certified specialists monitor screening regulations across the nation to offer customizable screening solutions with built-in compliance.
When you work with us, your company will have the freedom to focus on its mission and leave the other stuff to us. Does this sound too good to be true? Click the button below to talk to a representative today!
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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.
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.