Now more than ever, employers must adhere to specific federal and state laws when conducting employment background checks. There has been an increase in class action lawsuits brought against employers for violating such laws, especially the Fair Credit Reporting Act (FCRA).
Here ways employers may easily fall prey to noncompliance with the Fair Credit Reporting Act:
- Disclosure and Authorization Form included inside of the employment application
This is a very simple rule that majority of employers break. The FCRA specifically says that a disclosure form must be completed by the subject of the report consisting solely of the disclosure on one page, separate from any other internal documents.
- Not providing the consumer with rights under the FCRA
Any time an employer elects to run a background check for employment purposes, they must provide a document explaining to the consumer their rights under the Fair Credit Reporting Act (FCRA) Summary of Rights. This notice is three pages long and must be provided to every single applicant residing in the United States.
- Utilizing records that are older than the seven year period
Employers must only use criminal records that result in a conviction not older than seven years from the date of disposition. Unfortunately, employers are unaware of this due to the lack of information provided by the third party background screening vendor. This results in potential liability to the employer, especially if the applicant is not hired due to inaccurate information being reported.
- Making and employment decision based on criminal records that did not result in a conviction
This is where employers are really getting in trouble for non-compliance. The FCRA explicitly states that only convictions may be reported on an employment background check; therefore, if you are an employer and are receiving records with these types of dispositions, it may be a good idea to switch background screening vendors:
- Not Guilty
- Not Prosecuted
- Not allowing the subject of the report to review and dispute the findings
When an employer decides to take adverse action based on the results of an employment background check, they must follow the pre-adverse/adverse action process. This allows the applicant an opportunity to view the background report procured, and identify any inaccuracies. If there are any issues with the report, the applicant is able to contact the background screening company and dispute the findings.