New explanatory guidance on employee background checks has been issued by the Federal Trade Commission and Equal Employment Opportunity Commission. This guidance takes the form of an Employer publication and a publication aimed at employees and job applicants.
Background checks are still permitted under the law. However, the new guidance reminds employers that it is illegal to discriminate based on a person’s race, color, national origin, sex, religion, age, disability or genetic information when using a background check for employment purposes.
The guidance requires advance notice and written permission from a job applicant before obtaining background reports from a third party consumer reporting agency. If an applicant is denied a job or promotion based on a background check, the individual has the right to review the report on which the decision was based.
When taking an adverse action based on the results of a background check, certain actions must be taken.
In advance of the adverse action, the individual must
- Get a notice that includes a copy of the report used in making the decision; and
- Receive a summary of rights under the fair credit reporting act.
After the adverse action, the employer must tell the individual
- That the rejection was because of information in the report;
- The name, address and phone number of the company that sold the report;
- That the company selling the report did not make the hiring decision and cannot give specific reasons for it; and
- That the person can dispute the accuracy or completeness of the report and get additional free reporting for 60 days.
Background check information must be disposed of securely. Records must be kept for one year after the record was made (or decision was taken). The records must be retained for two years in certain circumstances. If an applicant files a discrimination charge, the records must be kept until the case is concluded.
Background check information may be disposed after the retention period is over. The documents must be disposed securely, which may include burning, pulverizing, or shredding paper documents and disposing of electronic information so it cannot be read or reconstructed.
Employers who use background check in hiring or ongoing employment should be sure they are complying with the background check information requirements of the FTC and EEOC.
