Streamlined compliance with Checkr: Understanding disclosure and authorization requirements
Editor’s Note: This article is authored by the Checkr Compliance team.
When it comes to ordering background checks, employers or companies engaging independent contractors must navigate a complex web of legal requirements and obligations. A critical part of this process is understanding and complying with the Fair Credit Reporting Act (FCRA) requirements for disclosure and authorization. In this blog, we’ll explain these requirements and show how Checkr's background check workflow supports customer compliance.
Standalone disclosure requirement
Before an employer can obtain a background check from a screening provider, like Checkr, the FCRA requires the company to provide a clear and conspicuous written disclosure to the individual (candidate) that a background check may be conducted. This disclosure must be in a document that consists solely of the disclosure–this is known as the "standalone" requirement.
The purpose of the disclosure is to ensure that candidates fully understand their rights and the potential use of their background information in the hiring process.
The standalone disclosure should state that a background check report may be obtained for employment purposes. It should detail the type of information that might be gathered, such as credit history, criminal records, driving records, or any other relevant details. It must be presented in a format that is separate from any other information or paperwork (such as the authorization), ensuring that the candidate can easily recognize and understand what information may be identified and used for hiring decisions.
Understanding candidate authorization
A candidate must also provide authorization before an employer can obtain a background check. That means that the candidate is giving permission for the company to order and obtain a background check from a screening provider. The authorization is often called a “consent” form, because it is a document where the candidate provides their consent to a background check. The authorization can be provided on a hard copy document or through electronic means.
Considerations for evergreen consent
For roles that require ongoing background checks, employers may consider using evergreen consent, where the candidate agrees to future screenings as needed during their employment. It's important to note, however, that evergreen consent isn't universally applicable. Companies should consult with legal counsel to determine if this approach is compliant with the laws of the regions where they operate and whether it aligns with their business practices.
Streamlining the process with Checkr
Checkr’s background check workflow is designed to help employers streamline the compliance process. If companies use Checkr’s background check workflow for their candidates, Checkr will automatically and seamlessly provide the company’s disclosure and authorization forms to their candidates. The candidates will be able to review and sign the forms electronically.
This automation is key in reducing the manual workload on hiring teams. By ensuring that the company’s disclosures and authorizations are consistently presented to all candidates, Checkr's background check workflow minimizes the risk of non-compliance due to human error or oversight. It also expedites the process, allowing candidates to receive, review, and respond to these documents efficiently, which can speed up the overall hiring timeline.
Checkr also offers sample templates for disclosure and authorization that can be tailored to the unique needs of each organization. These templates are a starting point, and Checkr encourages employers to customize them to align with their company policies and the legal landscapes they operate in. For example, in California, companies may need to provide an additional disclosure to candidates.
Maintain a consistent compliance framework
Understanding and complying with FCRA requirements for disclosure and authorization is a vital step in conducting employment background checks. With Checkr's background check workflow, companies have access to tools that simplify this process, ensuring that candidates are well-informed and that legal standards are met. By automating the distribution of customized disclosure and authorization forms, Checkr helps companies save time, reduce errors, and maintain a consistent compliance framework throughout their hiring processes.
Get a background check today
Frequently asked questions
Does the FCRA apply to my business if I’m a small employer?
Yes. The Fair Credit Reporting Act applies to any US employer that uses a third-party screening provider to run background checks, regardless of company size or industry. If you’re ordering background checks through a provider like Checkr, FCRA requirements for disclosure and authorization apply to you.
What should the disclosure document actually say?
The disclosure should state that a consumer report may be obtained for employment purposes. It should also describe the types of information that might be gathered, such as criminal records or credit history. Keep the document focused. Adding unrelated content or extra forms to the same page can put you out of compliance with the standalone requirement.
What is a candidate authorization, and is it the same as the disclosure?
No, they’re separate. The disclosure informs the candidate that a background check may be conducted. The authorization is the candidate’s signed permission for you to actually order it. Sometimes called a consent form, it can be collected on paper or electronically.
Can I use the same authorization to run background checks on an employee in the future?
It depends on how the authorization is written and where your business operates. Some employers use what is called evergreen consent, where the candidate agrees upfront to future screenings during their employment. This approach isn’t universally applicable, so you should consult with legal counsel to confirm it complies with laws in the states where you operate.
Do I need different disclosure forms for candidates in different states?
Possibly. Federal FCRA requirements set the baseline, but some states have additional disclosure or notice requirements on top of that. California is one example where employers may need to provide candidates with an additional disclosure that’s separate from the FCRA disclosure. It’s worth reviewing the requirements for each location where you hire.
How does Checkr help with disclosure and authorization compliance?
Checkr’s background check workflow automatically sends your disclosure and authorization forms to candidates for their electronic review and signature. That reduces the manual work for your team. Every candidate receives the required documents consistently, which lowers the risk of errors or oversights in your process.
Can I customize the disclosure and authorization forms Checkr provides?
Yes. Checkr offers sample templates you can tailor to fit your organization’s policies and the legal requirements of the states where you operate. They’re a starting point, and Checkr encourages you to work with your legal counsel to make sure your final forms reflect your specific situation.
Disclaimer
The resources and information provided here are for educational and informational purposes only and do not constitute legal advice. Always consult your own counsel for up-to-date legal advice and guidance related to your practices, needs, and compliance with applicable laws.
