Fair Credit Reporting Act

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Q: Are there certain rules an employer must follow when conducting background checks on employees and prospective employees?

A: The Fair Credit Reporting Act (“FCRA”) is an often overlooked federal law that imposes stringent technical requirements on employers wishing to procure a “consumer report” from a third party “consumer reporting agency” for hiring or other employment purposes. Individual FCRA lawsuits and class actions are on the rise and failure to comply with the FCRA can result in harsh financial penalties.  This blog post provides a brief overview of the FCRA.
Continue Reading Employers Must Comply with Detailed Requirements When Having a Third Party Perform Background Checks

Q: My company uses a third-party vendor to conduct background checks on prospective employees.  We heard there is a new model for the “A Summary of Your Rights Under the Fair Credit Reporting Act” notice.  Should we be using it?

A: Yes.

The Fair Credit Reporting Act (FCRA) establishes strict procedures that employers must follow when obtaining background check reports on applicants or employees from a third party “consumer reporting agency.” The FCRA requires employers to provide written disclosures to and seek affirmative consent from applicants and employees before procuring these types of background check reports.
Continue Reading Employers Must Utilize New Fair Credit Reporting Act (FCRA) Summary of Rights Form