Employers who administer background checks to employees or job applicants should review those forms for new compliance requirements. The U.S. Court of Appeals for the 9th Circuit recently held that state disclosures cannot be mixed with disclosures required under the Fair Credit Reporting Act.
When companies administer background checks, they must comply with the Fair Credit Reporting Act (FCRA). State laws may also apply to background investigation reports when used for employment purposes.
FCRA requires a background request disclosure to be clear and conspicuous in a stand-alone document. FCRA requires the following steps to be followed in connection with receiving background information (from the EEOC website):
- Tell the applicant or employee you might use the information for decisions about his or her employment. This notice must be in writing and in a stand-alone format. The notice can't be in an employment application. You can include some minor additional information in the notice (like a brief description of the nature of consumer reports), but only if it doesn't confuse or detract from the notice.
- If you are asking a company to provide an "investigative report" - a report based on personal interviews concerning a person's character, general reputation, personal characteristics, and lifestyle - you must also tell the applicant or employee of his or her right to a description of the nature and scope of the investigation.
- Get the applicant's or employee's written permission to do the background check. This can be part of the document you use to notify the person that you will get the report. If you want the authorization to allow you to get background reports throughout the person's employment, make sure you say so clearly and conspicuously.
- Certify to the company from which you are getting the report that you:
- notified the applicant and got their permission to get a background report;
- complied with all of the FCRA requirements; and
- won't discriminate against the applicant or employee, or otherwise misuse the information in violation of federal or state equal opportunity laws or regulations.
The recent court case held that state disclosure requirements, that supplement FCRA, should not be included on the federal background check disclosure forms. Instead, each disclosure should be a separate standalone document without extraneous information.
Employers should review their background check forms to ensure any state disclosure requirements are separated from the FCRA disclosure and authorization.
