FCRA and background checks: common employer questions, best practices

When considering a job applicant, you’ll likely want to investigate the person’s work history, education, criminal record, financial past, and medical information. The Federal Trade Commission (FTC) regulates such background checks (or “consumer reports”) through the Fair Credit Reporting Act (FCRA), a lengthy, complex set of laws that can be quite daunting to employers. Here are some common FCRA issues and best practices.

Notice to applicant, consent to obtain information

You must complete three steps before obtaining an applicant’s consumer report. First, let the individual know you may use the consumer report for employment-related decisions. The notice must be in writing in a standalone document (i.e., a separate written disclosure rather than buried in an employment application) with clear and visible language.

Second, obtain the applicant’s consent in writing to gain access to the consumer report. The consent section can be included on the document containing the notice provision mentioned in the first step above. According to the FTC, if an applicant declines to provide permission, you may reject the application.

Third, certify to the consumer reporting agency that you (1) have properly notified the applicant and obtained consent to access the consumer report, (2) will comply with the FCRA’s conditions on using the information for adverse actions, if applicable, and (3) won’t use it to violate any federal or state equal employment opportunity law or regulation.

Negative information found in consumer report