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Everything You Need to Know about Employment Background Checks

Going in for a job interview can be intimidating all on its own.  Couple that with your potential employer conducting an employee background check and the entire process can be down right scary.  Whether you are hired or fired may depend on the information found in your credit report or a background report, however the Fair Credit Reporting Act (“FCRA”) has got you covered.  Under the statute, guidelines are set forth for how an employer can use your report, review your report and notify you of its findings and plans. 

When heading for a job interview, understand that employers want to conduct background checks often because they want to protect themselves.  For example, if you are applying for a job in the financial sector, an employer would probably want to know you are not in serious debt.  If you are applying for a job in child care, an employer would probably want to know that you did not have a criminal record.  Not to worry, when an employer conducts a background check, not all information is discoverable. Under the FCRA, employers are allowed to review credit records, bankruptcy records, medical records, employment records, court records, driving records, criminal records, past employers, education records, personal references and social security administration documents.  Despite this lengthy list, there is information that cannot be included in your background check. Some of this information includes, bankruptcies after 10 years, judgments and arrest records after 7 years, paid tax liens after 7 years, collection accounts paid or unpaid after 7 years and any negative account after 7 years from the date of last activity. If you are applying for a job with a salary in excess of $75,000 the FCRA sets forth exceptions to these rules and much of the information may be discovered indefinitely, some states disagree with this exception and have set for rules to the contrary. Check your states laws to find out whether this exception applies to you.

The FCRA does not require employers to conduct background checks, but because approximately 2/3 of employers do, the statute sets standards that employers must follow when conducting a screening. When an employer plans to conduct a background check it must follow four steps to comply with the statute. First, the employer must get permission from the credit reporting agencies to access your credit report for employment purposes. Second, the employer must notify you that it plans to conduct a background check and receive your written consent. Third, if the employer uses any information in your report adversely, if must provide you with notice of its plans to use your report in its decision not to hire you and provide you with a copy of your report and an explanation of your rights under the FCRA before the employer actually declines you for the position. Last, if your employer ultimately declines you based on information contained in your report, it must provide you with a written notice of the reason for the decline and the name and address of the company that provided the report that was used in making the decision.

In the event information contained in your report was erroneous, you have the right to dispute the information in your report under the FCRA.  The information you dispute must be verified, and if the accuracy cannot be proved, it must be deleted from your file.  The FCRA provides that the entities conducting the investigation must complete it and report the results to you within 30 days of receiving your dispute.  In the event the inaccurate information is deleted from you report you can request the information be resent to the employer and that you be reconsidered for employment.  Unfortunately, there is no obligation under the FCRA for an employer to rehire you based on the updated information. 

If you believe your rights have been violated under the FCRA and you would like the advice or assistance of counsel, contact SmithMarco P.C. for a completely free case review.

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