Q: What is the Fair Credit Reporting Act?
A: The Fair Credit Reporting Act (FCRA) was enacted to ensure that "consumer reporting agencies exercise their grave responsibilities with fairness, impartiality, and a respect for the consumer's right to privacy." Despite the name, the FCRA applies to more than just credit reports including criminal history records, motor vehicle records and employment and educational information.
Under the FCRA, you as the employer are considered an "end user" and Info Cubic is considered a "consumer reporting agency". The FCRA imposes several requirements onto end users such as obtaining a disclosure and authorization before requesting a background check on an applicant or employee and engaging in the adverse action process.
In addition to the Federal FCRA, several states have various laws that also impact the background screening process. Feel free to contact us with questions about state-level legislation that may impact you.
Q: Do I need to get my employee's or applicant's consent to run a background check on them?
A: Yes, it is a requirement of the Fair Credit Reporting Act (FCRA) that you obtain consent before using a Consumer Reporting Agency (such as Info Cubic) to conduct any kind of background check. Info Cubic provides a sample disclosure and authorization form for your review; however, we strongly recommend consultation with qualified legal counsel on whether your disclosure and authorization form meets federal and state requirements.
Q: Do I need to send you the release my applicant signed?
A: Generally speaking, no. There are a select few searches where we require a signed release form in order to complete your request. However, you are required by the Fair Credit Reporting Act (FCRA) to obtain your applicant's or employee's express written permission to access any of their background check information. Specifically, you as the employer cannot procure a consumer report for employment purposes unless a "clear and conspicuous disclosure has been made in writing to the consumer" before requesting the consumer report "in a document that consists solely of the disclosure, that a consumer report may be obtained for employment purposes." The applicant must also authorize in writing the procurement of the consumer report. From time to time, we may request copies of the documents for audit purposes.
Q: What is the adverse action process?
A: The adverse action process must be followed any time a decision is made in whole or in part based on information in a background check report that adversely impacts an individual, such as denying employment, terminating an employee or deciding not to promote an individual. Adverse action is a two-step process which consists of a Pre-Adverse Action notice and an Adverse Action notice (or Final Adverse Action notice). Info Cubic provides sample adverse action letters; however, we strongly recommend consultation with qualified legal counsel on this matter.
There may also be local and state requirements that impact the adverse action process. This is particularly the case with a few recently passed "ban the box" laws that typically regulate the timing of the criminal history inquiry. Feel free to reach out to us for more information on these laws.