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Employers Permissible Purpose for Using Background Checks
When employers engage a third party company to conduct employment background checks, the first question that should be asked by the vendor is what your organization’s permissible purpose is for pulling these reports. The only logical answer for using background checks is for employment purposes; however, employers also feel that they can “double dip” if you will and use the reports for other reasons.
The background screening company should provide your organization with the “Notice to Users of Consumer Reports: Obligation of Users Under the FCRA.” The notice spells out obligations that the employer has when conducting employment background checks.
Obligations of Employers
- Employers have a “permissible purpose” for requesting a consumer report from a consumer reporting agency (i.e. hiring, promotion, retention, or reassignment). Essentially, the permissible purpose should be employment. Employers must certify to their background screening company the permissible purpose before furnishing the consumer report. The majority of background screening companies will receive this certification in their end-user service agreement.
- Employers must provide certain notices and disclosures to a job applicant or employee, (i) prior to requesting a screening report; (ii) when information in the report could potentially affect eligibility for employment; and (iii) if adverse action will be taken due to the results of the background check.
- Employers must provide a notice pertaining to the background investigation, and receive written consent from the subject of the background screening report.
- Employers must properly dispose of these reports, including burning, pulverizing, shredding, or electronically purging information.
Employers must also adhere to the Fair Credit Reporting Act (FCRA), which has additional requirements when employers use reports for employment screening services.
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