Running a background check? Here's what you're legally required to do

Passed in 1970, the Fair Credit Reporting Act (FCRA) establishes rights for people who are the subjects of consumer reports, including certain background checks used for employment purposes. When employers obtain background information from a consumer reporting agency to make decisions about hiring, retention, promotion, and reassignment, they must comply with the FCRA.

Those requirements apply regardless of the size of your business or how long you’ve been hiring. Whether you’re preparing to run your first background check or reviewing an established screening process, understanding the steps required by the FCRA can help you build compliance into every screening.

FCRA compliance for employers involves several core requirements when using background check reports for employment purposes. These include providing a clear disclosure, obtaining written authorization, making required certifications before obtaining a report, and following the adverse action process when applicable.

For small businesses preparing to run their first background check, understanding these requirements upfront makes it easier to build compliance into the screening process from the start. Once those steps are part of your workflow, you can follow the same process consistently with future screenings.

Businesses on their 50th, 500th, or 5,000th background check also benefit from periodically revisiting key FCRA requirements. Processes can drift as teams grow, hiring volume increases, or locations expand. Comparing the core FCRA requirements with your current workflow helps you identify gaps and strengthen compliance.

The remainder of this guide reviews the basic responsibilities your business has under the FCRA, regardless of your business size or screening experience. It also explains what to consider beyond the FCRA to support compliance with other laws and regulations that may affect your hiring process.

At the federal level, the primary law that employers must comply with is the Fair Credit Reporting Act (FCRA). The requirements are easier to understand when you strip away the legal jargon and look at where they fit into the screening process.

For a practical way to approach compliance, you can organize these requirements into four core stages of the screening process. Here’s what employers need to know at each stage.

The first key step in FCRA compliance is to inform the candidate that you intend to run a background check. You must provide this notification in writing in a standalone document. Including it in the job application is not enough; the FCRA requires you to provide it to the applicant separately.

If you wish, you may add minor additional information beyond the notification itself. For example, you might choose to name the types of screenings you intend to run. However, any additional language must not make the disclosure confusing or distract from the required notification. In other words, the disclosure should remain clear and prominent, not buried among unrelated paragraphs.

Timing is also important. You must provide the disclosure before ordering any background checks. Some background check platforms send your disclosures automatically when you order screenings to help ensure candidates receive them at the start of the process.

In addition to providing the initial disclosure, another step in the compliance process is to obtain the candidate’s permission to perform screenings. This authorization must appear in writing. You may add a signature line to the initial disclosure or provide the candidate with a separate document to sign.

If you want the authorization to allow you to obtain background reports throughout the person’s employment, make that clear and conspicuous in the authorization. Like the initial disclosure step, you must obtain this written authorization before you start running any checks.

Before obtaining the report, you must certify to the screening provider that you’ve met applicable disclosure and authorization requirements.

Certification also typically includes additional language. You may be asked to confirm that you will only use the information received for your stated purpose and not use it for any purposes prohibited by federal or state law. You may also be asked to certify that you will perform adverse action steps established by the FCRA if information contained in a background check leads you to take an adverse action step, such as disqualifying a candidate for employment or firing an employee. Often, this language appears in terms of service that you agree to when you order a background check or sign up for an account on a screening platform.

Base the screenings you choose on the role and applicable legal requirements, which can extend beyond the FCRA. Determine which background checks you actually need before you begin, focusing on screenings relevant to the role you are filling.

The adverse action requirements become important when information obtained in a background check report may lead you to take an adverse employment action. If you aren’t considering an adverse employment action based on information in the report, the FCRA adverse action process isn’t triggered.

If you’re considering an adverse employment action based in whole or in part on information in the consumer report, the FCRA requires you to complete additional steps.

Missing an FCRA requirement can expose your business to regulatory enforcement or legal claims and, just as importantly, prevent applicants or employees from receiving the notices and opportunities to review their reports the law provides. Building these steps into a standardized screening workflow can make them easier to complete consistently.

To keep your background check process aligned with the FCRA, complete this checklist with every screening:

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Integrating the core requirements of the FCRA into your workflow can simplify ongoing compliance with this federal consumer protection law. Depending on the type of report you request and how you use background information, additional federal requirements may apply. Employers must also consider applicable equal employment opportunity laws, as well as state and local requirements, which can change as lawmakers introduce new legislation or modify existing rules.

Checkr’s Legislative and Regulatory Updates Hub can help you stay up to date on changes to background check laws and regulations and understand when to revisit your processes. Our Hiring and Compliance Guide also provides additional guidance for building a compliant workflow you can use consistently with every screening.

Hayley Harrison

Hayley Harrison began her career as a hiring manager at a mid-size regional bank in the Pittsburgh area. She now brings her experience and knowledge of hiring best practices to her work as a freelancer, helping employers refine and improve their processes.