FCRA (Fair Credit Reporting Act) is a bit of a misnomer, says Rosen, because it's not limited to credit reports—it also covers other information employers want, including public records, employment, criminal records, sex offender registration, driving, and more.
It's easiest to think of FCRA compliance as having four steps, says Rosen, who is CEO of Employment Screening Resources in Novato, California. He offered his four steps at the SHRM Employment Law and Legislative Conference, held recently in Washington, DC.
Prior to providing a consumer report, employers must first certify to the CRA, in writing, that they will follow the FCRA rules concerning disclosure, authorization, notice and adverse action notices, and that they will not use information in violation of any state/federal discrimination law.
Typically, the CRA will provide such a form to the employer, Rosen notes.
Before obtaining any type of consumer report, an employer must:
You can combine the disclosure and the request for authorization, but you cannot put excessive language on the form that detracts from the clear meaning.
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Prior to actually obtaining an investigative consumer report, and in addition to the requirements listed above, an employer must clearly and accurately disclose to an individual that the report may include in-depth information about his or her character, general reputation, personal characteristics, mode of living, criminal, driving and work history, etc.
This disclosure must:
If an individual does request additional information, an employer must mail or otherwise provide the information within 5 days of receipt of the written request, or the request date of the report, whichever is later.
Prior to taking adverse action based in whole or in part on a Consumer Report, employers must provide applicants with copies of the report and a Summary of Rights.
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You can't "just say no," on the basis of the report, Rosen says, because of the many possibilities of mistakes. For example:
However, says Rosen, in the real world, it's rare for people to object, and rarer still that they are right.
If the adverse action becomes final, a second letter is required under FCRA Section 615; This letter must provide, orally, in writing, or electronically, the following:
In tomorrow's Advisor, Rosen's next steps, plus an introduction to the "Best Workforce Training Solution."
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