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.

HR Luncheon Event: What Employers Need to Know About Background Checks, Drug Screening and E-Verify / Form I-9 Compliance

Learn from the experts: Join A-Check Global & AppleOne Employment Services for a Special Complimentary Luncheon Presentation Thursday December 4th at A-Check’s headquarters in Riverside, CA. Attendees will earn 2.0 (General) recertification credit hours toward PHR, SPHR and GPHR recertification through the HR Certification Institute. View Event Flyer (PDF) Continue reading “HR Luncheon Event: What Employers Need to Know About Background Checks, Drug Screening and E-Verify / Form I-9 Compliance”

FCRA Compliance More Important Now than Ever For U.S. Employers

Large Law Firms in the United States specializing in class action claims have discovered a lucrative revenue stream – Employers that violate the Fair Credit Reporting Act (FCRA), the federal legislation that outlines the process for obtaining and utilizing consumer reports.

There have been an estimated 27 such class action lawsuits in 2014 – close to 40 over the last three years – regarding violations of the FCRA. The majority of these lawsuits are attributed to failures in two important steps in the process – Authorization and Adverse Action. Continue reading “FCRA Compliance More Important Now than Ever For U.S. Employers”

HR Impact Webinar Series – Compliant Background Screening Process: Best Practices For U.S. Employers

HR Impact Webinar Series – Compliant Background Screening Process: Best Practices For U.S. Employers

Webinar Info:

Recorded: Thursday, October 30th, 2014
Duration: 1 hour plus 15 minutes Q&A

View Recording of Webinar and Q&A Session

Download documents featured in the webinar below:

Continue reading “HR Impact Webinar Series – Compliant Background Screening Process: Best Practices For U.S. Employers”

Public Records vs Private Data – Critical Information for Compliant Employee Screening Practices

Lights… Camera…. Action!  Now playing in a courthouse near you, a lawsuit against an employer or background check company for a consumer reporting violation involving the rights of an applicant or even more catastrophic, a class of applicants.

Consumer Reporting is now on the radar of three major federal agencies, The Federal Trade Commission (FTC), the Consumer Financial Protection Bureau (CFPB), and the Equal Employment Opportunity Commission (EEOC) in addition to the approximate 1.2 million attorneys practicing in the United States.

With so much focus on regulatory compliance in consumer reporting, can your organization afford not to implement a fully-compliant screening process considering all rules and regulations including HR Law, Federal Consumer Law, State Consumer Law, and Agency Guidance?

Nearly all organizations that utilize pre-employment screening in their hiring process are familiar with the requirements of proper disclosure, authorization, and the process to utilize when administering an adverse communication.

However, some organizations, in their haste to locate the background screening company that provides the fastest and cheapest information, fail to consider the accuracy and completeness of the information which makes the fastest and cheapest background information also the riskiest to use in your hiring process.

There is nothing wrong with seeking the fastest results at the most reasonable price however it is important to know the difference between public records reported directly from the source and aggregated data reported directly from a database.

The Federal Fair Credit Report (FCRA) in §613 outlines a choice between two processes that a Consumer Reporting Agency (CRA) must utilize when reporting aggregated data (criminal record databases) to the end-user.

The first method is to provide any and all adverse information to the applicant at the same time as providing it to the end-user to ensure the applicant has the opportunity to dispute inaccurate information.

The challenge in this process is ensuring the applicant receives the information in a timely manner, which leads most CRAs to apply the second process afforded by the FCRA. To comply with FCRA §607 by ensuring “maximum possible accuracy” and §613 to check all aggregated (database) adverse information against the current public record, A-Check only reports public information directly from the most current public record.

It is important you understand A-Check does utilize several different criminal record and sex offender registry databases but only in the capacity of a criminal records locator search.

A-Check utilizes databases to extend the geographical scope of our research. However, when records are located by using databases, all information is compared to the current public record to ensure that only accurate, up-to-date information is reported to our end-users.

Should you have any questions regarding this or any other process, please feel free to email compliance@acheckamerica.com for more information.