Background Checks and the FCRA

The most important factor when conducting background checks is to ensure that all procedures are compliant with the federal Fair Credit Reporting Act (FCRA) guidelines.  This is typically an area where employers can find themselves in trouble.  Working with an employment screening company like PeopleG2 can help educate the HR department and other hiring managers on following the basic procedures that are in place via the FCRA.

The challenge when hiring is that there are so many things to consider when interviewing applicants for employment.  A couple of the things that tend to create difficulty for companies when it comes to FCRA compliance in background checks are 1) improper disclosure forms or lack of disclosure forms altogether, and 2) failure to meet “pre-adverse action” requirements.

It is important to provide all applicants with disclosure forms regarding the background check that will be conducted.  PeopleG2 provides these forms to all of its clients, and the forms are FCRA compliant.  Always note that specific language is necessary to have within the body of these disclosure forms.  It is best to obtain these forms from PeopleG2, so that the wording is correct and the background check can be conducted without concern.

Pre-adverse action describes the period in which the applicant has to dispute any information found on a background check.  A letter must be provided to an applicant explaining that the background check has been received, and that there is an opportunity to review this information and dispute anything that is inaccurate.  It is always possible that information found does not pertain to the applicant, or something has changed with regards to a court record, etc.  An applicant must have this opportunity before a second letter is sent which describes the adverse action.  Many times, this pre-adverse action letter is not provided which can lead to problems once adverse action has been decided on.

Court cases that deal with violations of FCRA guidelines are reminders of the fact that background checks are highly regulated, and that the slightest misstep can lead to action being taken.  It is in the best interest of an employer to work with a professional employment screening company.  As noted, PeopleG2 will provide assistance with basic compliance issues to all of their clients which will help identify not only FCRA guidelines, but also state and local laws surrounding employment screening.