Keeping a Close Eye on Compliance:

FCRA Disclosure and Authorization Forms

No doubt, you already know the Fair Credit Reporting Act (FCRA) has strict regulations in place to govern your pre-employment background screening process—and that failure to meet these regulations when screening your candidates can quickly get you into some pretty expensive legal trouble. It’s no secret that class action attorneys, year after year, continue to pursue employers and Consumer Reporting Agencies that are not in strict compliance with FCRA requirements.

Before we get too much further, let’s take a quick look at why these regulations are in place to begin with.

The FCRA was enacted to help ensure consumer protection

Short and simple. It’s about the privacy of consumer information—knowing what information is collected, and how that information can be used by lenders, credit issuers, and yes, even employers. During background screening, this protection also extends to information like criminal/arrest records.

In short, if you’re a U.S.-based business, of any size, public or private, your pre-employment background screening program is subject to FCRA regulation compliance.

Two important requirements: FCRA Disclosure and Authorization

Employers must begin all candidate background screening with two critical steps:

  • Disclosure: You must properly inform candidates that you will be performing a background screen
  • Authorization: And, you much obtain the candidate’s permission for this background screen

Let’s take a closer look at what is required for both.

Disclosure: Clearly notifying candidates that you intend to perform background screening as part of a wholly informed hiring decision. This disclosure must be clear (direct language, easy to understand), conspicuous (prominent, not deeply embedded in other forms or fine print), and presented as a stand-alone document.

Authorization: Also as a self-contained document, a clear candidate acknowledgement that background screening will be conducted as a pre-employment requirement. This can be presented jointly with the Disclosure, but must be on two separate and printable pages. As part of the authorization, the client will also acknowledge that the company is an equal-opportunity employer and follows all fair hiring practices.

That said, what can go wrong? Well . . . without close attention, a lot!

At most risk, improperly worded presented background check disclosure and authorization forms that do not follow FCRA requirements to the letter are magnets for class action litigation. Like we mentioned above, the FCRA requires clear, conspicuous disclosure as well as candidate written authorization prior to performing a background screen employment. Furthermore—and this is detail attorneys are embracing—FCRA requires the disclosure and authorization forms exist as stand-alone documents. (FCRA section 604(b)(2)).

It is the End User’s responsibility to manage the forms they provide to candidates. Disclosure and authorization forms can typically be signed physically or electronically. However, your company or organization should always consult with your legal team to confirm you are utilizing the appropriate forms, as FCRA regulations evolves over time, as does state-by-state legislation.

A-Check Global has consistently communicated the importance of disclosure and authorization form compliance to our clients. While U.S. employers are ultimately responsible for ensuring their hiring practices comply with federal and state requirements, we’re here to help.

Ask us about our FCRA Form Tool Kit

We offer a convenient Authorization for Background Investigation Form Kit which helps make it easier to comply with FCRA and applicable state-by-state requirements. Our document includes all the components necessary to customize your Forms.

For more information and access to this Tool Kit, please contact us at clientsupport@acheckglobal.com or 1-877-345-2021.

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