4 Ways to Improve Your Compliance When Using a Background Check

Disclosure

Disclose to the consumer that you are doing a background check. This needs to be in writing and in a standalone document (exception is that the authorization can be included, if state law doesn’t prevent it). It cannot be incorporated in the application for employment. Over the last few years, there have been a number of class action law suits regarding the release of liability language used in the disclosure and authorization form. Two of the law suits were 1) A settlement for 2.5 million was issued in the Singleton v. Domino's Pizza, Inc., 976 F. Supp. 2d 665 (D. MD. 2013) for including language that releases liability and 2) Whole Foods also lost a class action lawsuit for similar Disclosure and Authorization additions that are not permitted.

Authorization

Obtain the consumer’s authorization to run the background check. This needs to be in writing and can be done electronically if the ESIGN Act is followed. This is typically done on the same form as the disclosure and is allowed per the FCRA. Make sure the form you are using states your company, not another company name. If the form states the wrong company, it means the applicant isn’t authorizing One Source to run the check at all. This is an issue as the FCRA (the federal Fair Credit Reporting Act) states we must have a signed disclosure and authorization form.

Adverse Action Process

If the background check contains information that doesn’t meet your criteria, send the pre-adverse action (required for pre-employment screening and recommended for all types of background checks) and include a copy of the report and the Federal Summary of Rights. See the Employment Education Series for a current version of the Federal Summary of Rights.

Then wait a period of time before sending the adverse action notice. This allows the consumer time to dispute their report.

Next, send the adverse action notice (required for all types of background checks). See the updated templates for pre-adverse action and adverse action notices. Note that these only meet the federal guidelines enacted by the FCRA, it doesn’t cover any city, county, or state law that may be in place.

State Laws

All background checks must follow the federal FCRA. In addition to this, some states have enacted State FCRA laws. These laws must be followed as well. State laws can add additional requirements for a wide array of items: how far back information can be reported on a background check, time limits for sending notices, when a background check can be ran, and the list goes on. Think of these state laws as being stricter guidelines than what the federal government has in place. Many states are also passing laws that ban the box or are in regards to salary history bans.

 

Here are links to our template documents

EMPLOYER EDUCATION SERIES FCRA SUMMARY OF RIGHTS DISCLOSURE & AUTHORIZATION
PRE-ADVERSE ACTION ADVERSE ACTION
 

 

About Author

Jill DeJong
Jill DeJong

Jill serves as Compliance Director for One Source. In this role, she is responsible for leading the internal processes for promoting and ensuring One Source’s compliance with laws, regulations, company policies, procedures and contracts.

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