Dos and Dont’s of FCRA Disclosures in Employee Screening

If you’re familiar with FCRA guidelines, then you know there are certain disclosures required at nearly every step of the hiring process. In this blog, we focus very narrowly on your obligations related to those disclosures, helping you avoid some of the common pitfalls.

Disclose Your Intent to Conduct a Background Screen

Employers must inform candidates they will be using a consumer report for employment purposes.

Do

  • Provide written disclosure to the applicant stating that information found in their background report may be used as a basis to exclude them from employment
  • Provide the disclosure as a stand-alone document
  • Certify to the Consumer Reporting Agency (CRA) from which you are getting the report that you have complied with the appropriate FCRA steps

Don’t

  • Bundle the disclosure with other application materials

Obtain Consent for the Screening

The applicant or employee must agree to the background check by providing written authorization.

Do

  • Obtain an authorization signature before proceeding

Don’t

  • Accept verbal consent only

Send a Pre-Adverse Notification, if Applicable

If the information you receive in a background report becomes a factor in your decision to exclude a candidate from employment, you must provide a pre-adverse notification to the applicant to that effect. The notice must inform the candidate of their right to explain or refute the findings before the employment decision is final. The notice should include a copy of the background check report the employer relied upon, as well as a copy of a Summary of Rights Under the FCRA

Do

  • Provide a pre-adverse notification to the applicant
  • Include a copy of the background report
  • Provide the applicant a copy of the summary of their rights

Don’t

  • Exclude a candidate from employment without giving them a chance to respond
  • Forget to give the candidate time – usually 5 days — to refute the information or communicate any mitigating circumstances

Provide an Adverse Notice, if Applicable

If you decide that the candidate’s rebuttal information is not sufficient to change your decision to exclude, you must then send an Adverse Action notice to the applicant. The notice needs to include the contact information of the CRA that supplied the report, a statement that the CRA did not make the decision to take unfavorable action and can’t give specific reasons for it, and a notice of the candidate’s right to dispute the accuracy or completeness of the report, as well as get a new, free report from the CRA if requested within 60 days.

Do

  • Send an adverse notice stating the decision to exclude based on information in the background report
  • Provide the name, address, and phone number of the CRA that produced the report
  • Include a statement that the screening agency had no part in the decision to exclude
  • Let the applicant know they have a right to another screening report, which must be provided within 60 days

Don’t

  • Close the position until you’ve completed the entire adverse action process, as mitigating information may emerge
  • Fail to notify the applicant that they have a right to dispute the information with the CRA

The dos and don’ts highlighted above are specifically in reference to the disclosures you may need to provide to candidates during the hiring process. These important steps are part of a broader set of FCRA guidelines. If you’d like help understanding any of your employer hiring obligations, always consult your attorney.

About Michael Gaul

Michael is a results-oriented marketing executive with over two decades of experience in employment screening, physical security, and business process management. Michael has deep experience in human capital risk management and a passion for educating business leaders and HR professionals on strategies that tangibly protect their interests. Michael serves on the Board of the Secure Cash and Transport Association (SCTA) and is a member of the Professional Background Screening Association (PBSA), and the American Society of Industrial Security (ASIS).
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