The FCRA requires that employers take specific actions to make certain that an individual’s rights aren’t violated. The following details are essential to understanding the most important FCRA requirements.
Any oral, written, or other pertinent communication of any information provided by the consumer reporting agency concerning a consumer’s credit standing and worthiness, character, personal characteristics, reputation and more that’s used, or expected to be collected and/or used in part or in whole, serving as a variable in establishing the applicant’s eligibility for employment.
This comes into play when employment is denied or another decision is made that has an adverse effect on the prospective or current employee. Are you FCRA compliant? Ask yourself the following questions.
- Do you send out adverse action letters?
This is a must because compliance is mandatory for everyone.
- Do you use paper?
If the answer is yes, you need to have an efficient process in place to track it, ensuring that the letter was actually sent out. It’s also important to use a mail service that’s traceable. You also need to ensure that the letters go out following the required timeline.
- Do you have easy access to your proof that the letter was sent?
Be sure to have a system in place or use a consumer reporting agency that makes it easy to locate your adverse action documents.
- Do you know what to do if an applicant disputes the findings in their background check?
If you run into this situation, you’re required to provide the appropriate dispute process to any job candidate that you denied employment too dependent on the adverse background check. If by chance the background check is determined to be in error it will need to be corrected. Once corrected, you’ll need to store it in a safe place, ensuring that it remains in compliance, minimizing the likelihood of a breach. In other words, all of the components of a company’s hiring cycle should be securely stored in one trustworthy location.
Over the past few years, the Fair Credit Reporting Act (FCRA), the federal law mandating, among other items, procedures and reporting requirements that employers must follow when conducting background checks through a third-party vendor, has become a hot-button employment issue and a lucrative one for class action plaintiff attorneys. Similar to other class actions involving technical violations, such as wage and hour and “seating” lawsuits, plaintiff class action attorneys have latched onto technical requirements in the law providing for statutory damages when these requirements are violated. The motivation driving these lawsuits? The promise of easy money.