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Four Essential Requirements to Comply with the FCRA when Conducting an Employee Background Check

Since the Fair Credit Reporting Act ("FCRA") amended the requirements of conducting employment background checks in early 2013, compliance has never been more important.  Consumers need to be cautious that their potential or existing employers are not violating their rights under the statute and knowing their rights is the first step to protection.   

  1. Employers must submit written consent from the employee prior to requesting a copy of the employee's credit file.  As of January 2013, the FCRA requires that anytime an employer requests a copy of an employee's credit file for the purpose of a background check, the employer must provide proof of consent from the employee.  Such authorization must clearly show that the employee understands the information requested will be used for the purpose of making employment decisions. 
  2. Employers must disclose their intention to conduct a background check.
    The employee must be aware of the employer's intention to conduct a background check and the disclosure must include a statement regarding the type of background check to be conducted, what information will be gathered during the process and how the information will be utilized.  This document must be identical to the document presented to the credit reporting agency when requesting the employee's information.
  3. Employers must follow protocol prior to taking adverse action against an employee.
    Should the employer receive information contained in the report requiring them to take adverse action against the employee, prior to taking this action, the employee must be presented with a copy of the information received from the credit reporting agency along with a copy of "Summary of Your Rights Under the FCRA".
  4. Employers must follow protocol when taking adverse action against an employee
    If an employer takes adverse action against an employee, the employer must provide an "Adverse Action Letter".  This letter must include the name, address and telephone number of the credit reporting agency who provided the report; a statement declaring the credit reporting agency is not responsible for the adverse action taken against the employee and that it is not able to provide a reason for the adverse action; a statement that the employee has the right to obtain a copy of the same credit report by making a request within 60 days of the adverse action; and a statement that the employee has the right dispute any inaccurate information contained in the report directly with the credit reporting.

If you feel an employer has violated your rights under the FCRA, contact SmithMarco P.C. for a free case review.

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