George Lenard, who runs the popular "Employment Blawg", has an interesting post this week about how current job seekers will have to undergo different scrutiny than perhaps the last time that they engaged in a job search.  As George notes, the biggest change is the prevalent use of background checks by employers.  George provides some useful tips to job seekers about what this means during the interview process.Searching for Information

For employers, some (but by no means all) will use these checks without a clear understanding of the laws that may be implicated. Indeed, some employers who do hiring infrequently, may not be aware of the extent of the development of this area of law.  This post will discuss one aspect of such compliance — the Federal Fair Credit Reporting Act.   

As its core and very broadly, the FCRA imposes three general requirements on a company that seeks to obtain and use a background check (known as a "consumer report") for employment purposes: 

(1) the company procuring the report must make certain disclosures to, and obtain authorization from, the job applicant;
(2) the company must make certain representations to the consumer reporting agency from which the report is procured; and, 
(3) the company that uses that report for employment purposes must make certain disclosures to the applicant both before and after taking any adverse action against the applicant based on the report.

The first and third obligations require a bit more explanation.  What is meant by the first requirement? Typically, a clear and conspicuous disclosure– in a stand-alone document — in writing to the applicant that the report may be obtained for employment purposes, and then, written authorization from that applicant.

Regarding the third set of requirements, before not hiring the employee based, in whole or in part, on information in  that report, the company must provide a copy of that report and a description of the applicant’s rights.  After taking an adverse action (i.e., not hiring the applicant), the company must provide further notice of the adverse action in a format that discloses, among other items, the name, address and phone number of the company that provided the background check. 

Of course, there are other state requirements that may apply, in addition, to other rules under FCRA itself.  For example, there are additional requirements for the use of "investigative consumer reports" and there are exceptions to the above rules (such as when criminal activity is suspected) that may apply. 

But for employers using background checks, alarm bells should go off when doing so.  In today’s age when doing a background check appears as simple as typing in some names or social security numbers into a computer database, nothing is that simple about these checks.   If employers are not following the rules, they risk substantial liability in the future for breaking them.  The Federal Trade Commission, the government agency responsible for oversight of this law, has a good primer on the subject for employers as well. 

  • Jeannine

    This site is exactly what I’ve been looking for. I was recently hired at a new company, (which I quit my only other job for), with no problems, they told me they had to do a backround check, which I had no problem with. They had me start, I worked an entire full day of work. Had a day off, and the next day I came in and they handed me a one day check telling me they had to let me go because my backround check came up with something. Now I am without job, and having extreme difficultly finding a new one. I honestly thought I was good to start my new job without worry.
    My question is….
    Weren’t they supposed to this consumer report before I was hired, and before they had me start work, eliminating this problem?

  • Thanks for your comment Jeannine. Unfortunately, as I’ve indicated on my disclaimer and comment pages, I cannot provide advice to specific issues, nor would I want someone relying on this site for such advice.
    In general, while employers often try to complete all background checks before hiring, sometimes that is not the case and, so as to help the employee, they may allow them to start while the check is being finished. Many employers, in fact, condition the job on the successful completion of background checks, no matter when completed. Additionally, information that shows misrepresentations on a resume or application may also be grounds for terminating an employee.
    As always, the only specific advice I’d give people is that if they have a specific legal issue, check with an attorney to understand your rights.

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  • Cole

    A similar situation just happened to my 20 year old son. We understand that an unsatisfactory background check can make the employment offer null. I do find it terribly unethical for the perspective employer to not due their due diligence before offering employment and putting into motion notice and quitting of the existing job. My son is now out of work after being told not to come in on his arranged start day…one day after the quit his former job. He had been told he was “all set” to start at the new company before his last day at the old job. Yet the new company was insistent that he give notice so he could begin on their inflexible start date. Unethical.