The Right Way to Make Hiring Decisions Based on Background Checks

As consumers, we’re all protected by the Fair Credit Reporting Act (FCRA), which spells out the appropriate ways our sensitive data may be handled and used by employers, insurers, landlords, and anyone requesting access to these records. The findings of these consumer reports are used to determine our eligibility for most if not all of the basic necessities of life: employment, housing, credit, insurance, and more.

So as an employer pulling a background check on an applicant, it is important to remember the right way to make decisions based on your findings in order to remain in compliance with the FCRA. Avoiding the “wrong” way will ultimately protect your assets and interests in the same way that running a background check will help you find the most appropriate additions to your team.

What to Do When a Background Checks Pulls Negative Results

First the FCRA will require that you provide the applicant with a disclosure document informing them that the background check will take place, and then receive written authorization from the applicant to run the check.

If the check is returned with information that compels you not to hire the applicant, there are few things that must be done to cover your bases and stay compliant. You must:

  • let the applicant know of the results of the report and your decision not to extend an offer due at least in part to the results.
  • provide the applicant with a copy of the report.
  • give the applicant enough time to review the report and challenge any inaccuracies.

Ban-the-Box Legislation

Be aware that ban-the-box-type legislation is becoming more prominent across the U.S. and you must educate yourself on how your state regulates the handling of criminal histories of your applicants.


We’re always happy to answer questions regarding FCRA compliance. Contact us to learn more.

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