When an employer decides to hire or promote an employee they should have a non-discriminatory legally compliant background screening program in place. Not only does this help employers ensure they are hiring the right person for the position, it also limits exposure to negligent hiring claims.
For this month we will focus on the question, “Are background checks legal?”
Yes, they are legal. The Fair Credit Reporting Act was enacted October 26, 1970 and regulates how employers use public record information (i.e. court records, driving records, verifications etc.) on background screening reports.
Consumer Reporting Agencies (CRA’s) are entities that collect and disseminate information about consumers to be used for employment purposes. CRA’s have responsibilities under the FCRA which include:
- Provide a consumer with information about him or her in the agency’s files and to take steps to verify the accuracy of information disputed by the consumer.
- If negative information is removed as a result of a consumer’s dispute, it may not be reinserted without notifying the consumer within five days, in writing.
- CRA’s may not retain negative information for an excessive period. The FCRA describes how long negative information may stay on a consumer’s credit report.