Background Checks and the Federal Law
Employers obtain background checks (or consumer reports, commonly known as credit reports) to aid decision making when it comes to evaluating a consumer for employment, promotion, reassignment, or retention as an employee. Intelli Corp, HireSafe, HireRIght, Clarifacts, EmployeeScreenIQ, and Proforma are just a few of the many background check/employee screening companies that offer employers their services. When an employer conducts a background check, they may be provided with any of the following information about you:
- Credit reports;
- Criminal and civil records;
- Social security number (trace and validation);
- Employment verification;
- Education verification;
- Professional license verification;
- Motor vehicle and driving records;
- Military record verification; and
- Workers’ compensation history.
Federal law, specifically the Fair Credit Reporting Act (FCRA), sets standards for screening for employment reasons. When an employer conducts employment or pre-employment screening, they are provided with a consumer report. According to the FCRA, a consumer report is:
“any written, oral, or other communication of any information by a consumer reporting agency bearing on a consumer’s credit worthiness, credit standing, credit capacity, character, general reputation, personal characteristics, or mode of living which is used or expected to be used or collected in whole or in part for the purpose of serving as a factor in establishing the consumer’s eligibility for
(A) Credit or insurance to be used primarily for personal, family, or household purposes;
(B) Employment purposes; or
(C) Any other purpose authorized under section 604 [§ 161b].”
If an employer intends to obtain a consumer report to evaluate a current or potential employee, the employer is required by law to disclose that a consumer report may be obtained for employment purposes, and provide the consumer with a summary of the consumer’s rights under the FCRA. Before an employer is allowed to take any adverse action against a consumer, as a result of information learned in the consumer report, the employer must provide a copy of the report to the consumer.
Sometimes, employers fail to abide by the law, and take unfavorable action taken against the employee or potential employee due to information learned in the consumer report. This problem is not new nor is it being ignored. The Fair Trade Commission (FTC) recently issued a Report stating that: “we intend to continue to work in this critical area.” The report served as written testimony to the U.S. Commission on Civil Rights and details the legal rights of the consumer.
Adverse actions due to either the inaccuracy of the consumer report/background check, or by the employer for not abiding by the responsibilities required of them under the law, can be remedied under the FCRA. Being denied due to erroneous or incomplete information is not that uncommon. If you have been subject to unfavorable action due to inaccurate or incomplete information being reported on your credit report, or feel as if the employer has not lived up to their legal obligations consider seeking legal counsel.