There has been an increase in lawsuits against employers for noncompliance with the Fair Credit Reporting Act (FCRA) involving pre-employment background checks. The FCRA has several mandatory steps that must be taken when an employer does background screening of a potential employee for criminal record, credit history, and certain other information.
Before screening occurs, the employer must obtain the applicant’s written consent and make certain written disclosures about the purpose for the background check. If an employer intends to take adverse action based on the results of the background check, you must first give the applicant a notice of intent to take adverse action form, a copy of the background report, and a copy of a document entitled “Summary of Your Rights Under the FCRA”. This will allow the applicant to correct any errors in the background report, such as a misidentification of the person. Once a final decision has been made not to hire the applicant because of the background report, the employer must supply the applicant with a final notice of adverse action letter.
Many violations of the above requirements can be technical, but can still give rise to legal liability for violating the FCRA. Employers must be certain to follow all the required steps when doing background screening.