When it comes to conducting background checks during the employment screening process, it can often be difficult for employers to remain in compliance with all of the rules and guidelines determined by the Fair Credit Reporting Act (FCRA), because there are many steps involved. However, it is critical to be aware of and to enforce all of the policies and procedures that have been outlined by the FCRA. Failing to do so could end up being costly to your business’ image and to your pocketbook. There are four basic steps that are required to stay in compliance with the FCRA during the employment screening process.

These steps include Permissible Purpose; Disclosure and Authorization (D&A); Pre-Adverse Action Notification; and Adverse Action Notification.

First and foremost, before an employer decides to conduct a background check, he or she must have Permissible Purpose, such as employment screening.

Once permissible purpose has been determined, the employer can move onto D&A. D&A requires an employer to provide the applicant with documentation that uses a specific set of language that informs him or her that a background check will be performed. The signed authorization of the applicant must be received in return. At this point, an employer should also give the prospective employee his or her first copy of the “Summary of Consumer Rights under the FCRA” as well.

Pre-Adverse Action Notification comes into play once an employer is considering denying employment based on the results determined during the background check. This step requires an employer to send a pre-adverse action letter, a completed copy of the background check and a second copy of the “Summary of Consumer Rights under the FCRA” to the applicant. This letter should make the applicant aware that they may not be hired for the position unless they choose to dispute the information found in the background check and provide proof that it is inaccurate.

After a reasonable amount of time has passed since you sent the pre-adverse action letter, Adverse Action can be taken. This requires an employer to send an adverse action letter to the applicant. This notification notes your final decision to deny employment based on the results found in the background check. The employer must also send a second completed copy of the background check and a third copy of the “Summary of Consumer Rights under the FCRA” as well.

Some employers have responded to the challenge of staying compliant by simply relying on the forms and information they receive from their background screening companies. While background screening companies are a great resource, those employers should keep in mind that the FCRA imposes compliance requirements on employers themselves, requirements that are independent of the requirements applicable to the background check companies.

Bottom line, as a business owner or employer, it is important to remember that if you are ever going to use any information found in a background check to determine whether or not to higher an employee, all of these steps must be followed to protect your business and the rights of the applicant. In many cases, the decision not to hire a potential employee has nothing to do with the results of his or her background screening. However, if you ever have any doubts or are unsure, it is always better to be safe than sorry.

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