If information is inaccurate, consumers can file a dispute to have the information completed or corrected. When an employer uses a third party to conduct a background check, they must comply with the FCRA as well. All of this is standard practice, but the way you collect and store this information can land you in hot water with the federal government. Here are four bad hiring practices that can get you in trouble and what to do instead :. Luckily, there are a few things you can do to ensure your organization is compliant with the FCRA:.
Fair Credit Reporting Act and Employee Background Checks
By following the above tips and best practices, you can make sure your company is compliant and help avoid the hefty fines associated with FCRA violations. Topics: compliance , FRCA. Subscribe to the Fuse Blog. Claim your free resources. Get great HR content in your inbox. What are employers doing wrong? Failing to inform the applicant how the background check impacted the hiring decision : If you decide not to hire the applicant based on the information you discovered in their report, you must provide the applicant a copy of the report with a summary of their rights under the FCRA, as well as contact information for the company that sold the report to your organization.
Failing to dispose of the information properly : According to the Equal Employment Opportunity Commission EEOC , employers must keep employment records on file for one year. The disclosure document must be presented on its own—not handed over in an orientation packet or other collection of papers.
Before instructing a CRA to conduct a background check, an employer must obtain signed consent from the job candidate under review, acknowledging that the check is happening and that they give permission for it to occur. The FCRA permits the candidate to authorize, or provide consent to, the background check within the disclosure document. Sharing results with the candidate. Upon completion of a background check by a certified FCRA-compliant CRA , and before making a final hiring decision, the employer must inform candidates of their rights under FCRA and offer them the opportunity to review and correct their reports.
New Compliance Requirements for FCRA Background Checks | Hunton Employment & Labor Perspectives
By providing interactive tools that let candidates note questions or concerns, this approach also can reduce the amount of time required to re-check disputed information, if any. Apply Equal Employment Opportunity Commission rules to findings review. Individuals with criminal records must be considered on a case-by-case basis, in light of job requirements and any mitigating circumstances, such as personal character, successful completion of rehabilitation or diversion programs, satisfactory job performance in a similar role, and other context.
A background check CRA should provide reports that conform to those requirements. Follow proper 2-step adverse-action procedures.
If a background check leads to a decision against hiring, retaining, or promoting a candidate, the employer must issue the candidate a written notice, known as a pre-adverse action notification , and give the candidate a chance to refute or explain any findings before a hiring decision is final. GoodHire provides guidance through this process and helps generate appropriate pre-adverse action notifications to streamline this process, and provides a secure web portal the candidate can use to submit any explanations.
In instances when the background check leads to an adverse employment decision the employer decides not to hire , employers must send a final adverse action notice to the candidate or employee. Finalize the hire.
Highly Regulated Industry
Once all background checks are conducted; any disputed facts have been rechecked and corrected as needed; and candidates have been notified of proposed adverse actions and given a chance to respond, the employer can make a final hiring decision and notify all candidates of the final decision. The number of lawsuits filed over alleged FCRA violations has increased steadily each year since Many FCRA violation cases are class-action lawsuits, brought on behalf of sizable groups of job candidates.
Widespread employer use of standardized documents and background check procedures helps make this a sound legal strategy and a potentially lucrative one for law firms.
Attorney Lanette Suarez noted in Law. DISH Network. The coffee giant faces a class-action suit in Georgia from a man who claims his job application was declined based on a criminal conviction wrongly attributed to him, and that Starbucks failed to give him a copy of the background check in time to correct the error.
Beyond “Credit Reporting”
No matter what their eventual outcomes may be, high profile suits and settlements bring unfavorable publicity. And the perception that an employer may be careless about job-candidate rights can discourage promising applicants from pursuing opportunities with them.
Conducting FCRA-compliant background checks is not overly complicated, but care must be taken to choose a FCRA-compliant CRA, and to ensure all necessary documents and procedures are in place from the start, and that there are no deviations. As an employer, you need to work closely with HR and legal counsel to vet all policies and procedures.