Background Checks

Information on “adverse actions” (for example, not hiring an applicant or firing an employee) is available from the Equal Employment Opportunity Commission (EEOC). The EEOC has recently released updated guidance, and we will share it on this blog site. In the meantime, consider the FTC guidance, which is equally important to follow.

When an adverse action is based upon background information obtained through a company in the business of compiling background information, the Fair Credit Reporting Act (FCRA) requires the employer to provide the applicant or employee with specific information before taking the adverse action:

  • A notice that includes a copy of the consumer report used in making the decision; and
  • A copy of “A Summary of Your Rights Under the Fair Credit Reporting Act,” which employers should receive from the companies that sell them reports.
  • By giving the individual advance notice, it affords him or her an opportunity to review the report and explain any negative information. When you take an adverse employment action based on information from the report, you must give the applicant or employee (orally, in writing or electronically) the name, address and phone number of the company that sold the report. You must also tell him or her:
  • That he or she was rejected because of information in the report;
  • That the company selling the report didn’t make the hiring decision and can’t give specific reasons for it; and
  • That he or she has a right to dispute the accuracy or completeness of the report, and to get an additional free report from the reporting company within 60 days.