Do you get your applicants’ consent before running their pre-employment criminal background checks? If you’re a hiring manager or responsible for hiring, you probably already know that the Fair Credit Reporting Act (FCRA) requires written consent from an applicant. Even that may not be enough, however.
FCRA Disclosure & Authorization a Must
The FCRA requires a signed disclosure and authorization. The disclosure tells the applicant you will run a background check, and what that background check will include. That disclosure must also tell the candidate that you may base your employment-related decision on information you obtain in that background check. The authorization states that the candidate consents to the criminal background check. If you’re already taking this step, great! But another, there is another, less known part of this requirement.
Assuming that the state(s) in which you employ people do(es) not impose additional requirements, the authorization and disclosure can, in many jurisdictions, be combined in one form, but they still must be a separate, stand-alone form. In other words, you cannot bury it in a job application, employee handbook or employment contract, and you cannot include other language, such as a release or limitation of liability clause. The authorization/disclosure must consist solely of language to that effect. Once you add to that authorization and disclosure, you risk being found in violation of the FCRA. Frankly, the best practice (which we recommend) is that you keep the authorization and disclosure as separate forms on separate pages.
What If You Get It Wrong?
If one or more applicants complain to the Consumer Financial Protection Bureau you could be assessed penalties ranging from $100 to $ 1000 per violation. Classes of rejected applicants, to whom you failed to provide proper authorizations and/or disclosure forms can also file a lawsuit. Publix Supermarkets paid $6.8 million to settle a case alleging that their disclosure forms included release of liability language. Just last month, in a similar case, Syed v. M-I, LLC No. 14-17186, the 9th Circuit Court of Appeals also found inclusion of release language in the disclosure to be an FCRA violation, and reinstated the plaintiff’s dismissed complaint. While M-I, the screening company will likely pay dearly for this mistake, you can learn from M-I, LLC. Start by reviewing and updating your background check procedures and your authorization and disclosure forms—and, of course, work with a trusted background screening provider and consult with employment counsel.
Robyn Kunz is the Chief Compliance Officer at Trusted Employees. She has worked in the background screening industry for over 15 years and holds Advanced Certification in the Fair Credit Reporting Act from the National Association of Professional Background.
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