As an employer, the success of your business can boil down to hiring the right employees for your company. However, mitigating risks and liability doesn’t just involve conducting background checks on potential employees. The process of conducting background checks itself can also bring risk depending on how closely an employer follows the Fair Credit Reporting Act (FCRA) guidelines and regulations.
Increase in Violation Claims Under the FCRA
There has been an increase in claims under the FCRA by unsuccessful applicants for employment for violations arising out of background checks conducted by third party background check providers. If the claims are successful, claimants can recover actual damages, statutory damages, attorneys’ fees, and costs from an employer who violates FCRA. In translation, employers could be held financially responsible for improperly conducted background checks or for violating applicants’ rights under the Fair Credit Reporting Act. This is why it is so important for employers to be understand what they are responsible for and the documents and information needed to conduct employment background checks.
Tips for Employers to Maintain FCRA Compliance
It is important for employers to know that they may only supply the information required by statute and nothing more to an applicant or employee to obtain valid consent to conduct a background check through a third party credit reporting agency. Employers must also provide timely pre-adverse action and post-adverse action notices to the applicant or employee in connection with any adverse action that may be taken (pre-adverse) or will be taken (post-adverse) as a result of information contained in the report provided by the third party credit reporting agency.
Employers should review and make sure to have the following documents, as well as have the proper documents signed by the applicant prior to any background check is conducted:
- Background Check Authorization and Disclosure Forms
- Pre and Post-Adverse action notices and procedures
- Copies of any State Specific legislation regarding background checks
By making sure employers have these documents, it will be easier for companies to defend against claims of FCRA violations and more importantly, make sure to remain FCRA compliant throughout the background check process as to avoid any violation claims in the first place.
At Accredited Background Checks, Inc. we make sure to provide every employer with the knowledge and tool necessary to maintain compliance in accordance with FCRA and state regulations. If you have any questions about conducting a background check or need to start an employment background check, feel free to contact us online or call at (800)441-2728.