“In the Know!” Part Two: Law and Disclosure and Authorization, oh my.

As your trusted partner, we want to make sure you have access to professional guidance when making employment decisions. To that end, this is our second of a three part series in employment screening compliance. Last month we discussed End Users and Permissible Purpose; this month we’ll quickly cover Disclosures and Authorizations.

Disclosure: End User Must Disclose to Applicant Prior to Requesting a Report

PLEASE NOTE: Because an ever-increasing number of law firms now specialize in class action litigation regarding employer required FCRA Disclosure and Authorization, employers AND consumer reporting agencies should be equally as focused on technical compliance with applicable federal and state laws. Employers should not take short cuts by combining disclosures in the screening process even though “green thinking” and common sense dictate the shrinkage of paper and reduction of steps in the process. If utilizing technology to process Disclosure and Authorization, it is also highly recommended to ensure the electronic signature process utilized is in full compliance with the federal Electronic Signature in Global and National Commerce (ESIGN).

Authorization: Federal Law, State Requirements, and Collection of PII

Employers are required to obtain authorization from the applicant prior to requesting a consumer report for the permissible purpose of employment with only one exception – investigation of wrongdoing.

PLEASE NOTE: Since many organizations utilize the Authorization for a dual purpose in that it not only authorizes the consumer report but it also authorizes the release of information to the consumer reporting agency, class action law firms have taken advantage of this literal interpretation of the federal Fair Credit Reporting Act to successfully sue hundreds of employers for technical violations of the FCRA. If the Authorization form contains language such as “I hereby authorize my past employers and schools to release information about me” or include state required notices such as those in Minnesota, New York City, Oklahoma, or Washington, it will violate the FCRA if combined with the Disclosure.

In short, PLEASE present your Disclosure and Authorization forms as separate documents.

One last recommendation about the Authorization form: ensure that it states “I authorize the background check” and not “I agree to be background checked.”

Next month, RESPONSIBLE BACKGROUND SCREENING Part Three will cover Evaluations, Decisions and the use of a Compliance Checklist.

 

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