Which Law Sets National Standards for Employment Screening and Background Checks?
In the United States, employment screening and background checks have become an essential part of the hiring process for many employers. These checks are conducted to ensure that potential employees are suitable for the job and do not pose any risks to the company or its existing employees. However, there are laws in place to protect the rights of both employers and employees during this process. The law that sets national standards for employment screening and background checks is the Fair Credit Reporting Act (FCRA).
The Fair Credit Reporting Act was enacted in 1970 to promote the accuracy, fairness, and privacy of consumer information contained in the files of consumer reporting agencies. While the FCRA primarily focuses on consumer credit reporting, it also applies to employment screening and background checks as they often involve the use of consumer reports. A consumer report is any communication that contains information about an individual’s creditworthiness, credit standing, credit capacity, character, general reputation, personal characteristics, or mode of living.
Under the FCRA, employers must follow certain procedures and guidelines when conducting employment screening and background checks. These include obtaining written consent from the job applicant before obtaining a consumer report, providing a copy of the report to the applicant if adverse action is taken based on the report, and giving the applicant an opportunity to dispute the accuracy or completeness of the report.
Additionally, the FCRA requires that employers provide a clear and conspicuous disclosure to the applicant that a consumer report may be obtained for employment purposes. This disclosure must be in a standalone document, separate from the job application, and cannot include any other information.
Employers must also comply with the FCRA’s requirements for the use of investigative consumer reports, which are reports obtained through personal interviews with neighbors, friends, or associates of the applicant. If an employer decides to obtain an investigative consumer report, they must inform the applicant of their right to request additional information about the nature and scope of the investigation.
Frequently Asked Questions:
Q: Can an employer conduct a background check without the applicant’s consent?
A: No, under the FCRA, employers must obtain written consent from the applicant before obtaining a consumer report for employment purposes.
Q: What happens if adverse action is taken based on a consumer report?
A: If adverse action is taken, such as not hiring the applicant, the employer must provide a copy of the consumer report and a copy of “A Summary of Your Rights Under the Fair Credit Reporting Act” to the applicant. The applicant then has the right to dispute the accuracy or completeness of the report.
Q: Are there any limitations on the information that can be included in a background check?
A: Yes, the FCRA sets limitations on the types of information that can be included in a background check. For example, bankruptcies that are more than 10 years old cannot be reported, and certain types of adverse information, such as arrests or civil suits, that are more than seven years old cannot be included, unless specific exceptions apply.
Q: What should an employer do if an applicant disputes the accuracy of a consumer report?
A: If an applicant disputes the accuracy or completeness of a consumer report, the employer should conduct a reasonable investigation to determine whether the disputed information is accurate. If the information is found to be inaccurate, the employer should correct it and provide the applicant with a corrected copy of the report.
Q: Are there any state-specific laws that employers need to consider?
A: Yes, in addition to the FCRA, employers must also comply with state-specific laws regarding employment screening and background checks. Some states have additional requirements, such as restrictions on the use of criminal records or limitations on the types of information that can be considered.
In conclusion, the Fair Credit Reporting Act is the law that sets national standards for employment screening and background checks in the United States. It provides guidelines and procedures that employers must follow to ensure the accuracy, fairness, and privacy of consumer information. By understanding and complying with the FCRA, employers can conduct effective and lawful background checks while protecting the rights of both applicants and employees.