If you are conducting background checks on employees and/or applicants, please note that the “Summary of Your Rights Under the Fair Credit Reporting Act” notice has been updated. This notice is required by the Consumer Financial Protection Bureau prior to taking any adverse employment action based on a consumer report.
Fair Credit Reporting Act Rules Governing Background Checks
Employers conducting background checks should be aware of the federal Fair Credit Reporting Act’s (FCRA) requirements for obtaining and using background checks within their businesses. These requirements include, among other things, that prior to obtaining a “consumer report”, the applicant:
- must be provided with a disclosure that the report may be obtained for employment purposes; and
- the disclosure must be in a document that consists only of the disclosure (e.g., NOT part of an employment application), and may not contain any form of waiver of liability or rights.
The applicant must authorize the report in writing before it is obtained, and the employer must provide the applicant with a Summary of Consumer Rights before taking any adverse action based on the report.
Be Aware of State Laws Limiting Background Checks
In addition to the requirements of the FCRA, many states have further limitations on how employers may use information obtained via background checks. In Texas, for example, state law limits employers to a seven-year background check for positions offering to pay less than $75,000. For jobs that pay more than $75,000, employers may look all the way back to the age of 18.
At Hendershot Cowart P.C., our labor & employment attorneys can assist you in reviewing your employment policies and processes to safeguard against violating state or federal background check guidelines. Contact our firm to schedule a consultation at your convenience.
