The Fair Credit Reporting Act & Employment Background Checks

Did you know that when you apply for a new job your potential employer may ask for your consent to perform a background check prior to hiring you?   There are some very important aspects to the pre-employment screening process that you must take notice of in order to enforce your rights under the Fair Credit and Reporting Act (“FCRA”).  Below are two important aspects of the FCRA to remember when it comes to companies conducting background checks prior to hiring you.

 

Disclosure and Consent

First, an employer must obtain your authorization prior to asking for a report about you from a credit agency or any other company that provides background information.  The disclosure that the company intends to conduct a background check and the employee’s consent to the background check must be separate from any other application materials.  Importantly, no extraneous information can be attached or included on the consent form.  The authorization and disclosure must stand alone.  

A company’s failure to follow the disclosure and authorization rules regarding background checks could subject the company to a fine of up to a $1,000 per employee, plus other statutory penalties as stated in the FCRA.

 

Adverse Action

If an employer takes any adverse action against the applicant or employee as a result of information obtained in the report, such as, denying to hire the job applicant or consider an employee for promotion, or to terminate employment, the employer must adhere to the notification process under the FCRA.

First, prior to the employer acting on the information obtained from the report, the employer has to provide a “pre-adverse action” notice to the job applicant or employee, which has to include a copy of the consumer report and Summary of Rights as outlined under the FCRA.  Second, after a statutory waiting period expires, the employer must then give an “Adverse Action Notice” to the applicant or employee which includes the information required by the statute itself.  A failure to follow the two-step notification process can also subject the company to substantial fines under the FCRA.

The lawyers at Blumenthal, Nordrehaug & Bhowmik are currently litigating class action lawsuits involving violations of the Fair Credit Reporting Act.  Cases brought by the firm include:

If you feel your rights have been violated during the pre-employment screening process, contact an experienced California labor law attorney today at (800) 568-8020.