When an employer uses a third party to help conduct a background check, there is a critical federal law the employer must be familiar with and follow. The law is called the Fair Credit Reporting Act (FCRA). Even though the name of the law uses the term “Credit,” the FCRA goes far beyond credit reports. The FCRA establishes specific requirements and rules for a pre-employment background report, called a Consumer Report, which is usually much broader in scope than just a credit report.
A Consumer Report can include a wide variety of obtained information concerning job applicants, such as criminal and civil records, driving records, civil lawsuits, reference checks, and any other information obtained by a Consumer Reporting Agency. Therefore, the FCRA fundamentally controls the information on applicants that is assembled, evaluated, or disseminated by certain third parties and used for employment purposes.
When first passed in 1970, the FCRA was primarily meant to promote confidentiality, privacy, accuracy, and relevancy regarding information gathered about consumers. The law was extensively amended in 1996, 1998, and 2003. The amendments substantially overhauled the use of Consumer Reports for employment purposes by providing greater protection to consumers.
Additional Resource - Complying with the Fair Credit Reporting Act (FCRA) in Four Easy Steps©
© excerpt from The Safe Hiring Audit book.
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