FCRA Procedures – what you need to know to be compliant

Ann: “Cutting Edge, this is Ann.”

Customer (whining): “You want too much paperwork.”

Ann: “While I do have a black belt in paperwork [it’s true—look it up], it’s not me that requires the paperwork. It’s the Federal Trade Commission, they wrote the Fair Credit Reporting Act which governs Consumer Reporting Agencies like Cutting Edge Background Investigations.”

Customer: “I swear you just like to use a lot of words.”

Ann: “True. Let me lay some more words on you, so we all have a better understanding.”

Here are the procedures the FCRA requires before ordering the background check:

  1. Tell the applicant or employee you might use the information for decisions about his or her employment. This notice must be in writing and in a stand-alone format.
  2. The notice can’t be in an employment application. You can include some minor additional information in the notice (like a brief description of the nature of consumer reports), but only if it doesn’t confuse or detract from the notice.
  3. DO NOT include language about not holding you liable or any hold harmless clauses. This form should ONLY give permission for the background check. If you’re curious about why, I’ll send you a copy of the 9th Circuit’s opinion.
  4. Get the applicant’s or employee’s written permission to do the background check. This can be part of the document you use to notify the person that you will get the report. If you want the authorization to allow you to get background reports throughout the person’s employment, make sure you say so clearly and conspicuously. There is some argument about whether or not ”evergreen” clauses are a good idea. Check with your attorneys to be sure they work for you.
  5. Provide the applicant with a Disclosure form, separate from the permission or Authorization form. The FCRA requires employers who obtain a consumer report (background check) on job applicants to disclose that process “in a document that consists solely of the disclosure.”

So now that you have the procedures, do you know what to do with the results? Tune in to our next blog post for details.