When filling job vacancies, considering internal promotions, ensuring the safety of your customers and staff or meeting contractual requirements, many companies turn to background screenings to ensure they make informed decisions. At PlusOne Screening Solutions, we want to shed light on the process and responsibilities involved in using consumer reports for employment decisions. Here’s a breakdown of what you need to know.
What Are Consumer Reports?
Consumer reports, often used for background screenings, encompass a range of information including credit reports and criminal records. They play a critical role in hiring, retention, promotion, and reassignment decisions. However, their use is governed by the Fair Credit Reporting Act (FCRA), enforced by the Federal Trade Commission (FTC).
Key Steps to Comply with the FCRA
The following are Federal FCRA requirements. States and local jurisdictions may have additional requirements.
- Before Obtaining a Consumer Report
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- Provide Notice: Inform the applicant or employee in writing that their consumer report may be used for employment decisions. This notice should be standalone and not embedded within an employment application. It should include a brief description of the nature of the consumer reports but avoid extraneous details that could confuse the purpose of the notice.
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- Obtain Written Permission: Secure explicit consent from the individual to obtain their consumer report. If you plan to use/obtain a consumer report throughout their employment, ensure this is clearly stated.
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- Certify Compliance: When requesting the report from a consumer reporting agency (CRA), you must certify that:
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- You’ve notified the individual & obtained their consent
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- You have complied and will comply with all FCRA regulations
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- Affirm that the information will not be misused or lead to discrimination
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- Review and adhere to applicable laws of your state related to consumer reports
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- Before Taking an Adverse Action
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- Provide Pre-Adverse Action Notice: If you plan to reject an application, deny a promotion, or participation in a program or take any other adverse action, ensure you:
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- Give the individual a notice that includes a copy of the consumer report used to make the decision
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- Give the individual a Summary of Your Rights Under the Fair Credit Reporting Act. This allows them to review the information reported and notify of any inaccuracies.
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- Ensure required notices adhere to applicable laws of your state as it relates to adverse action.
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- After Taking an Adverse Action
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- Issue Adverse Action Notice: Inform the individual of the decision taken based on their consumer report. This notice should include:
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- The name, address, and phone number of the reporting company.
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- A statement clarifying that the reporting company did not make the adverse decision and cannot provide specific reasons for it.
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- Information on the right to dispute inaccuracies and obtain a free report within 60 days.
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- Handling Investigative Reports
An investigative report is based on personal interviews concerning a person’s character, general reputation, personal characteristics, and lifestyle. Additional obligations apply to users of Investigative Reports. These obligations are:
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- Giving written notice that you may request or have requested an investigative consumer report
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- Giving a statement that the person has a right to request additional disclosures and a summary of the scope and substance of the report.
- Disposing of Consumer Reports
Once you have finished using a consumer report, securely dispose of it. This includes shredding paper documents or properly deleting electronic information to ensure it cannot be reconstructed or read.
Conclusion
Understanding and complying with the FCRA is crucial for employers using consumer reports. The FCRA guidelines ensure fair treatment of applicants and employees while protecting your organization from potential legal issues.
While we at PlusOne Screening Solutions pride ourselves on adhering to FCRA requirements and supporting our customers to ensure compliance, the above information is provided for information purposes only. It should not be construed as legal advice. Users are reminded to seek legal counsel concerning their obligations and use of PlusOne Screening Solutions services.
