Is My Company Compliant?

Shannon Wheeler Compliance 0 Comments

Disclaimer: The following information on specific laws and regulations does not constitute legal advice. As always, compliance with federal, state and local laws is ultimately your responsibility. We recommend that you consult with legal counsel to ensure your processes and procedures are fully compliant.


Is my company’s hiring process compliant with all laws and regulations that apply to us?

Are we following all the latest rules?

How do I get more information?

If you are asking yourself these questions, we have a place for you to start. Here at Tenstreet, we want to be your partner in hiring drivers and reducing the burden of compliance on your business. That’s why our system is flexible – so we can configure it to your specifications based on your hiring practices. We also have integrated countless features and automated services to help you with compliance, but all of this doesn’t necessarily make you compliant. We see several common mistakes among carriers and while we can’t give you legal advice, as your partner, we can give you information. With the ever-changing legal landscape and costly lawsuits being filed, it has never been more important for you to review your processes and documentation with qualified legal counsel.

Even if we cannot tell you that you are compliant, we are able to tell you some reasons why you may not be compliant.

You may not be compliant…

…if you include the FCRA disclosure and authorization as a part of your application or if you have a release of liability in your disclosure and authorization:

Prior to ordering any consumer report, employers must first

  1. make a clear and conspicuous disclosure to the individual consumer setting out that consumer reports may be obtained for employment purposes; and
  2. get the applicant’s written authorization to obtain such consumer reports.

The applicant’s written authorization can be in the same document as the disclosure. However, it must be in a stand-alone document, meaning the disclosure and authorization should not be included as a part of your application (where the applicant signs the application, for example) or with any other document. Also, the disclosure and authorization should NOT include any other fine print such as a release of liability, an at-will employment acknowledgement, or other extraneous information. But your disclosure and authorization should include reference to the FCRA summary of rights and any applicable state summary of rights.

All of this to say: don’t include disclosure language anywhere in your application. Save it for the disclosure and authorization section that immediately follows the application.

…if you don’t have a pre-adverse action/adverse action process:

If you intend to take adverse action against a prospective or current employee and that decision is based in part or entirely on information in a consumer report, a pre-adverse action letter should be sent to the consumer. This pre-adverse action letter should inform the consumer that adverse action (no job offer, termination of employment, etc.) may be made based on the consumer report and should include a copy of the consumer report that the decision will be based on, accompanied by a summary of the applicant’s rights under the FCRA and with any applicable state/local summaries of rights or notices.

After the pre-adverse action letter is sent, the employer should wait a prescribed period of time (in some cases as much as 10 business days) to allow the consumer to respond and dispute the information in the consumer report. After the waiting period, if you have not heard that the consumer is disputing the information in the consumer report, then you may send an adverse action letter describing the adverse action you are taking against the consumer.

We’ve seen many lawsuits over an employer’s failure to have a compliant pre-adverse/adverse action process that follow the step by step process required by the FCRA.

Tenstreet offers a consumer letters product and also provides sample letters that you can adopt with our consumer letters product. We’ve also added a custom waiting period configuration setting so that your letters are sent after the time period you specify.

…if you don’t include the specific criminal charge in the pre-adverse action letter that you may base any adverse action on and you hire in California or another jurisdiction that requires this:

California and other jurisdictions require that the employer identify the specific criminal charge upon which any adverse action may be made in a pre-adverse action letter to the consumer. We’ve designed our system to help you with this.

…if you don’t send pre-adverse/adverse action letters when terminating a driver in your annual MVR/MVR monitoring processes:

Many carriers do not realize that MVRs ordered as part of driver monitoring or the annual MVR process are consumer reports in the same way that pre-employment MVRs are consumer reports. Regardless of the circumstances under which they’re ordered, MVRs fall under the FCRA definition of a consumer report. Include information about your driver monitoring agencies in your pre-adverse action/adverse action process and in the lists of your consumer reporting agencies. Send pre-adverse/adverse action letters if you take an adverse action based on a consumer report, regardless of circumstance.

…if you don’t have a §1681m summary of rights:

The FCRA requires the transportation industry to provide this §1681m-specific summary of rights to drivers in connection with their application when an applicant is applying by mail, telephone, or computer. Courts have found the failure to provide this information may constitute a willful violation of the FCRA.

…if you don’t include a list of ALL of your consumer reporting agencies in the California notice, §1681m summary of rights, and pre-adverse/adverse action letters:

Driving applicants and employees should be provided a list of the name and contact info for all consumer reporting agencies that may be used to obtain a consumer report on the individual. Tenstreet can add this to your customized IntelliApp. We just need the list of the CRAs you use.  If you use The Work Number from Equifax, that is also a consumer report, so be sure to include Equifax’s consumer contact information.  If you take adverse action on a consumer and use our consumer letter product, upload The Work Number report to Tenstreet so we may include it in the pre-adverse action notice (and ask us to include the Document Type in the consumer letters).

…if you don’t respect ban the box/fair chance legislation and don’t have a legislative reason why you do not:

With Tenstreet as your partner, we dynamically remove criminal record questions when an applicant lives in a Ban the Box jurisdiction. With the IntelliApp, you can trust that your application will be updated each time a new jurisdiction moves to Ban the Box. Further, “fair chance” laws vary by jurisdiction and include more than simply not asking about criminal history on an application. Make sure you understand these additional requirements in the jurisdictions where you hire and operate.

…if you don’t have a privacy policy on your application and you hire in California or Canada:

California and Canada have passed specific laws that among other things require any online service that collects personal information from a consumer have a link to a privacy policy. Send us your privacy policy and we’ll add the link to your application.

At Tenstreet, we want to help:

We’ve said it before, and we’ll say it again: we hate it when our clients get sued. That’s why we’re always working hard to make meaningful improvements to the software and services we offer you. While we can’t offer legal advice, we can help make you aware of the rules and regulations that may have you teetering on the line of compliance.

For more information on how Tenstreet’s compliance services can help, reach out to us at sales@tenstreet.com.

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