Learn about relevant background screening topics in checkr's compliance insights video series.
Su-Han Wang, Managing Litigation & Compliance Counsel at Checkr, shares an overview of the federal Fair Credit Reporting Act (FCRA). In this 3-minute video, learn how this federal law impacts background checks.
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Your hiring team has been working hard, found a qualified candidate, and made a job offer — congratulations! But there might be one more step in your hiring process: completing a background check.
To safeguard your company and ensure a seamless background check process, it can be helpful to be aware, in advance, of the relevant rules or laws that might apply to your company.
One of these laws is the Fair Credit Reporting Act, or the FCRA. The FCRA is a federal law, which means it applies across the country, and it governs how companies order and review information in consumer reports.
The FCRA was originally enacted to provide safeguards for consumer information in credit reports. Since then, the FCRA has been expanded to cover other types of data gathered by consumer reporting agencies, including background check providers like Checkr.
When you run a background check or credit check as part of your hiring process, these are considered consumer reports, and they must comply with the FCRA.
The FCRA requires employers to disclose their intent to conduct a background check and receive consent from the candidate before proceeding. Other protections that are afforded to the candidate are outlined in a document called "A Summary of Your Rights Under the FCRA.” These include the candidate’s right to:
- Know what information is contained in their background check
- Dispute any information that is inaccurate or incomplete
- Be notified if information in their background check is used in a way that negatively impacts their employment
When you're obtaining written consent from the candidate to proceed with the background check, you can do so in hard copy or through electronic means. The Checkr Dashboard helps you streamline this process.
When you initiate a background check, these disclosures and consent forms are provided by Checkr, in the platform, for the candidate to sign electronically. If the candidate or job location is in a state with additional requirements (such as California), Checkr may automatically provide the additional state-specific disclosures based on how the background check is ordered.
After a background check is complete and you review it, if you may not move forward with the candidate based on information in their background check, the FCRA requires that you start what’s called the adverse action process. This process includes informing the candidate of their rights under the FCRA, providing a copy of their report, and giving them an opportunity to correct any inaccuracies on their report. It's important to remember this process needs to be initiated before you make a final hiring decision. Checkr's Dashboard can also help you streamline this process.
Nothing in Checkr’s Blog should be construed as legal advice, guidance, or counsel. Companies should consult their own legal counsel about their compliance responsibilities under the FCRA and applicable state and local laws. Checkr expressly disclaims any warranties or responsibility or damages associated with or arising out of information provided.