The requirements and obligations of the Fair Credit Reporting Act (FCRA) can be challenging to navigate, even for the most seasoned employer. Any employer that uses a professional background screening company like Verified Credentials to get a background report (called a “Consumer Report” under the FCRA) on applicants or employees is likely subject to the FCRA.
One of the most confusing, and litigated, requirements for employers under the FCRA are the Disclosure and Authorization requirements. Per the FCRA, before obtaining a Consumer Report for employment purposes, the employer is supposed to:
- Provide the applicant/employee with a clear and conspicuous disclosure, in a document that consists solely of the disclosure, that the employer may obtain a Consumer Report about them for employment purposes; and
- Get the applicant/employee’s written authorization for the employer to obtain the Consumer Report.
The meaning of the terms clear and conspicuous are undefined in the FCRA – and have been the subject of many debates (and lawsuits!). What may be clear to an HR-professional may be undecipherable to the average applicant/employee. Likewise, whether a disclosure document consists solely of the disclosure has also been under a spotlight.
The Federal Trade Commission (FTC), one of the federal consumer protection agencies tasked with enforcing the FCRA, has never provided a sample Disclosure or Authorization form for employers to use. However, the agency has provided hints to help employers stay compliant with the FCRA. In an FTC blog post from April 2017, the agency provided some pointers on what not to put in a disclosure document:
- Don’t include language that claims to release you from liability for conducting, obtaining, or using the background screening report.
- Don’t include a certification by the job candidate that all information in his or her job application is accurate.
- Delete any wording that requires the job candidate to acknowledge that your hiring decisions are based on legitimate non-discriminatory reasons.
- Get rid of overly broad authorizations that permit the release of information that the FCRA doesn’t allow to be included in a background screening report – for example, bankruptcies that are more than ten years old.
For the full FTC blog-post, click here: Background Checks on Prospective Employees: Keep Required Disclosures Simple
Of course, this post is just intended to help you think critically about your obligations under the FCRA. You should always discuss your background screening program – and any forms, disclosures, authorizations or notices – with your legal counsel, to ensure you remain compliant with all laws related to background screening.