The Fair Credit Reporting Act, 15 U.S.C. § 1681 (FCRA) is U.S. Federal Government legislation enacted to promote the accuracy, fairness, and privacy of consumer information contained in the files of consumer reporting agencies. It is the employer’s responsibility to be aware and follow the steps to be compliant.
Disclosure: The employee must be notified in writing that the background check is being conducted and may impact their eligibility for employment. This must be a stand-alone document separate from the application.
Authorization: The applicant must provide written content to the background check, again on a stand-alone document separate from the application or disclosure. If ongoing background checks are a condition of employment, the employer must specify in written policies.
What if I decide not to hire an applicant?
Pre-Adverse Action Letter: When the decision is made not to hire an applicant based on information reported on their background check, the employer is required to provide written notice in the form of a Pre-Adverse Action Letter. In the letter the employer is required to give the applicant time to dispute information reported on the background check, along with a copy of the background report, a Summary of Rights and contact information for the Credit Reporting Agency (CRA).
Adverse Action Letter: If after the CRA investigation the decision is made not to hire the applicant the Adverse Action Letter must be sent along with a copy of the background report, a Summary of Rights and contact information for the Credit Reporting Agency (CRA).
National Background Investigations, Inc. makes it easier for employers to obtain applicant authorizations by offering electronically signed authorizations through applicant submission, keeping all paperwork on your computer and off your desk.