FCRA Compliance & Guidelines For Background Screening

The Fair Credit Reporting Act (FCRA) has guidelines that must be followed in order to perform a background check on a potential employee or applicant. Failure to follow those guidelines can mean big problems for your business. Fortunately, there are ways to make sure the rules are being followed, and that your company is checking out applicants thoroughly and getting great employees. One of the ways to do that is through a background screening service. With strong knowledge of FCRA guidelines, a screening service takes the hassle and risk out of background checks.

The FCRA Guidelines

There are five main steps to ensure that your company is following FCRA guidelines when it performs background screening. These are:

1. Having a permissible purpose

If your company does not have a permissible purpose for checking into a person’s background, it is illegal to screen them. These permissible purposes must be employment related, but “employment” is considered to be a relatively broad category. Hiring a prospective employee is within that category, as is retaining or promoting an employee who has already been hired. Considering an employee for a transfer is also permissible, and background screening can be legally obtained for contractors and volunteers, as well as actual employees. Even with such a broad category, though, having a permissible purpose is only the first step in performing a background screening under FCRA guidelines.

2. Disclosing the background check

Before the background screening is obtained, the fact that the screening will be done must be disclosed to the person who is going to be screened. That means any employee or prospective employee your company is going to screen, has to know about it. This is generally only an issue for prospective employees, however, because the form they sign for the background screening often states that they consent to the screening being done as a condition of employment and again at any time while they are employed. That eliminates the need to have them sign a disclosure statement again later, if they are going to be screened for a transfer, promotion, or other legal reason. The disclosure for a background screening must be in writing, and cannot be combined with any other form, with the exception of the authorization statement the person will have to sign.

3. Obtaining written consent

The disclosure provided to a prospective employee is not an authorization to conduct a background screening. It is only information explaining that the screening may be performed, as a condition of being hired by your company. To obtain the screening, you will also need an authorization form, signed by the potential employee, that states that they are giving their permission for your company to conduct a background screening on them. If you do not have this form signed, you cannot legally perform a background check on an employee or an applicant. Companies who screen employees or applicants without their knowledge or written consent can face serious penalties, and may also be sued by the individual whose privacy they violated.

4. Certifying your intent

Before obtaining any background screening, the company must certify that they are obtaining that screening for a permissible purpose, they have disclosed their intent to the person being screened, and that they will use the report they receive in a manner that does not violate any laws. You will also certify that, if you decide not to hire someone based on their background screening, you will follow proper “adverse action” procedures.

5. Agreeing to appropriate “adverse action” measures

Appropriate action measures involve specific notification requirements, to ensure that anyone you fail to hire based on a background screening has the opportunity to discover what was in their report and dispute anything that is not correct. If they dispute something, it can take up to 30 days to update or correct a report due to inaccuracies. After that time, you will receive an updated report and will notify the person who was screened of your final employment decision.

Choosing a Background Screening Service

There is plenty to do, as a business owner, to make sure you are following the law. Fortunately, you can remove a lot of the burden of getting things right by using a background screening service. These services look at criminal and civil records, along with credit reports and social information. You can also find out about a potential employee’s driving record, any government or spec records, verifications, drug testing, and physicals. By knowing all of those things about a potential employee before they are hired, you can make the right decision for your company, and bring in only the best talent. It’s a great feeling, and it comes with a lot of peace of mind.

At VerifyProtect.com, we can help with your employee screening needs. We have been in business since 1988, and we are leaders in the employment screening service industry. Whether your company is big or small, we can help you hire talented, vetted employees you can feel good about. We assist our clients in making sure a potential applicant would be a good choice for an employee, and deliver advanced technology that is reinforced by excellent customer service. Whether you need to verify the past employment of someone who has applied to work for you, or you need to check for a criminal history or valid references, Verify Protect can provide your company with accurate data. That can help you make the best hiring decision, and keep your company moving forward. Give us a call at (610) 355-2331 or emailing inforequest@verifyprotect.com.

Kristina Taylor
In 1989, Kristina began her career as a customer service representative at the newly formed American Tenant Screen, Inc. Ten years later, she pioneered tenant background screening on the Internet. As a long-standing member of the National Multifamily Resident Information Council (formerly the National Association of Screening Agencies) Kristina gains insight into the trends of the tenant screening industry to better understand the current and future needs of their clients.

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