Conducting Background Checks & the FCRA

We breakdown the best practices for conducting background checks and maintaining compliance with the FCRA.

Keeping Compliant on Background Checks - Consistency is KEY

When making personnel decisions - including hiring, retention, promotion, and reassignment - employers sometimes want to consider the backgrounds of applicants and employees.

For example, some employers might try to find out about the person's work history, education, criminal record, financial history, medical history, or use of social media. Except for certain restrictions related to medical and genetic information, it's not illegal for an employer to ask questions about an applicant's or employee's background, or to require a background check.

If you get background information (for example, a credit or criminal background report) from a company in the business of compiling background information, there are additional procedures the FCRA requires beforehand:

Tell the applicant or employee you might use the information for decisions about his or her employment. This notice must be in writing and in a stand-alone format. The notice can't be in an employment application. You can include some minor additional information in the notice (like a brief description of the nature of consumer reports), but only if it doesn't confuse or detract from the notice.

Get the applicant's or employee's written permission to do the background check. This can be part of the document you use to notify the person that you will get the report. If you want the authorization to allow you to get background reports throughout the person's employment, make sure you say so clearly and conspicuously.

Use background check services that are FCRA compliant.

The Fair Credit Reporting Act (FCRA) is fairly clear on what you can and cannot do as part of a background check with regards to credit information. Nearly all background checks are governed by the Fair Credit Reporting Act (FCRA), but you should know that there are an array of other laws that affect them, depending on state and region.

Get legal advice on how local and state laws govern your use of background checks.

Several states laws limit employers use of arrest and conviction records to make employment decisions. These laws may prohibit employers from asking about arrest records or require employers to wait until late in the hiring process to ask about conviction records. Get legal advice on basic criminal history laws for each state.

Give candidates a chance to clear up mistakes or misunderstandings with background checks.

Information obtained through background checks can sometimes be slightly incorrect and even outright wrong. Giving candidates a chance to rectify or explain incorrect information can help you save a great candidate that could have been excluded.

Use background checks consistently not on a candidate-by-candidate basis.

Apply the same background check process to every candidate you interview for the role. Applying it selectively to only candidates form a specific background or experience level can cause unintended legal consequences if it is shown to be a proxy for illegal discrimination. Outside of this, waving some candidates through based on gut feeling defeats the purpose of doing a background check to protect your company.

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