FCRA Consent & Disclosure Checklist for Criminal Background Checks

Employers have an interest in performing background checks and looking into criminal history of job applicants for employment purposes.

Employers who use outside employment screening agencies to conduct criminal background checks must follow the Fair Credit Reporting Act (FCRA) guidelines. The FCRA is a federal law governing the collection, accuracy, and privacy of consumer information held by credit reporting agencies. Failure to follow FCRA requirements can lead to penalties such as fines and class action lawsuits.

There are also state laws and federal guidelines for conducting employment background checks.

Many states with “Ban the Box” or Fair Chance laws prohibit employers from asking about criminal records or convictions during the hiring process or before conditional offer of employment. Be sure to check with your state and local jurisdiction to understand when you can ask about criminal history.

Even if your state doesn’t have a Ban the Box law, the U.S. Equal Employment Opportunity Commission (EEOC) guidance encourages employers to postpone questions about criminal history until after making a conditional job offer. Employers should also consider whether any criminal conviction is job-related.

FCRA Compliance Checklist for Background Checks

When performing background checks in your screening process, you should know about timing, disclosure requirements, obtaining written consent, and what to do if there is a negative result. Here is a checklist for FCRA-compliant background checks:

__ Determine when you can perform background checks according to applicable laws

__ Provide a Disclosure for Background Investigation (standalone document). See below for an example.

__ Provide a Summary of Your Rights Under the Fair Credit Reporting Act from the Consumer Financial Protection Bureau (CFPB)

__ Get written authorization from applicant or employee. See below for an example.

__ Conduct background check and review background check report

__ If no concerning information, proceed to hiring decision

__ If concerning information that results in a rejection, go to Adverse Action Process

Adverse Action Process

If there is a negative result, hold off on any employment decision until you have performed the adverse action process. This gives an applicant or employee the opportunity to clarify or correct a negative result.

__ Send Pre-Adverse Action Notice along with the name and contact information of the reporting company and a copy of the report

__ Allow waiting period for applicant or employee to respond to background check results and clear up any inaccuracies with reporting agency

__ After waiting period, based on response, make hiring decision

__ If not hiring or promoting the applicant or employee, send a final Adverse Action Notice 

Typically, the waiting period is five business days, but your state or local jurisdiction may have a set number of business days.

As an employer or hiring manager, you want to make sure your processes are meeting compliance requirements with federal, state, and local laws. You may consider having an employment attorney review your process, and review or draft disclosures, authorizations, and adverse action notices.

Record Retention Requirement Under FCRA

The FCRA does not have a specific period for record retention but the EEOC requires employers to retain the records for at least one year from the record date or the date the employment action was taken, whichever is later. It is recommended as a best practice for employers to keep records for up to five years due to the statute of limitations for FCRA claims. However, check your state laws as they may require longer retention periods.

Examples of Disclosure Notice and Authorization Form

(Standalone Document – Disclosure Form)

DISCLOSURE FOR BACKGROUND INVESTIGATION

[Name of Company] (“Company”) may use a background screening company to obtain a consumer report (“background report”) on you for purposes of employment. This background report may include information about your criminal history, past jobs, education, driving record, and other information from public records and prior employers.

The background report will be obtained from a consumer reporting agency.

[Name of Consumer Reporting Agency]

[Address]

[Phone Number]

A Summary of Your Rights Under the Fair Credit Reporting Act will be provided to you.

(Standalone Document – Authorization Form)

APPLICANT AUTHORIZATION FOR BACKGROUND INVESTIGATION (Separate Document)

By signing below, I acknowledge I have received and read the “Disclosure for Background Investigation” provided by [Name of Company]. I hereby authorize [Name of Company] to obtain a consumer report (“background report”) about me for the purpose of employment, and throughout my employment, to the extent permitted by law.

[Printed Name of Applicant or Employee]

[Signature of Applicant or Employee]

[Date]

The examples above do not cover investigative consumer reports that look into a person’s character, general reputation, personal characteristics, and mode of living. There are additional obligations under the FCRA such as “giving written notice that you may request or have requested an investigative consumer report, and giving a statement that the person has a right to request additional disclosures and a summary of the scope and substance of the report.”

Get Legal Help

You may want to have your legal counsel or an employment lawyer write or review your disclosure and authorization document to make sure it complies with federal, state, and local laws.

Disclaimer: The information presented here does not constitute legal advice or representation. It is general and educational in nature, may not reflect all recent legal developments, and may not apply to your unique facts and circumstances. Consider consulting with a qualified attorney if you have legal questions.