If you obtain, or have prepared for you, criminal background checks, consumer reports, or investigative consumer reports from a consumer reporting agency, you must comply with the various requirements of the federal Fair Credit Report Act (FCRA).
What’s a Consumer Report?
The FCRA defines a consumer report as “any written, oral, or other communication of any information by a consumer reporting agency bearing on a consumer’s credit-worthiness, credit standing, credit capacity, character, general reputation, personal characteristics, or mode of living” when the information is used for “employment purposes.”
Examples of consumer reports include credit history checks, state Department of Motor Vehicle record checks, and criminal background checks.
An “investigative consumer report” refers to a report bearing on a consumer’s character, general reputation, personal characteristics, or mode of living that is obtained through personal interviews with neighbors, friends, or associates of the consumer.
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Applicants Must Be Informed
If you require this information, you must inform each applicant that you intend to investigate him or her. You must also obtain from the applicant written, signed authorization to do so.
No later than three days after you request the report, you must notify the applicant that you have done so and identify the consumer reporting agency that will conduct the investigation. You must also alert the applicant to his or her right to review the reporting agency’s findings.
You’re required to certify to the consumer reporting agency performing the investigation that you have made the required disclosures.
If You Decide Not To Hire Based on Findings
If you ultimately decide not to hire the applicant because of the report’s findings, you must send the applicant a pre-adverse action notice of your intended decision.
If the applicant does not dispute your decision, you can then send the individual a notice of the decision not to hire him or her.
How Long To Keep Background Check Records?
While the FCRA does not have a specific recordkeeping provision, the Federal Trade Commission has stated that employers should keep background check records for at least the statute of limitations period.
Because a rejected applicant can take action up to five years after an adverse decision, you should retain all necessary documents, such as report findings, required notices, and verifications of providing mandated disclosures, for at least this period of time.
Tomorrow, we’ll look at the option of conducting your own background checks.
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Don’t the requirements of CA’s Investigative Consumer Reporting Agencies Act, which are more rigorous than those under FCRA.
Don’t the requirements of CA’s Investigative Consumer Reporting Agencies Act, which are more rigorous than those under FCRA.