Are Your Background Check Disclosures FCRA Compliant?

June 2, 2017
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Ensure Your Background Check Disclosures Pass Muster with KISS Rule

Criminal background checks are a hot-button issue. In addition to state-level “ban the box” laws, the federal Fair Credit Reporting Act (FCRA) also governs prospective employee criminal background checks.

Ensure Your Background Check Disclosures Pass Muster with KISS Rule

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The Federal Trade Commission (FTC), which is tasked with enforcing the FCRA, recently published a blog post regarding employers’ obligation to obtain written authorization to conduct background checks. While not considered official guidance, the FTC’s post does provide useful information for New York and New Jersey employers. According to the FTC, the bottom-line is to keep it simple (stupid) or KISS.

Mandatory FCRA Disclosure

The FCRA applies when employers obtain background check information from third-party consumer reporting agencies and the FCRA requires employers to notify job applicants and employees that the employer might use information in the consumer report for employment decisions. The FCRA also requires employers to obtain written authorization to obtain the consumer report.

FTC Advises Employers to Keep It Simple

Because the FTC has not provided an official form for employers to use or any other official guidance regarding the required disclosure, it is a frequent subject of litigation. While the agency’s latest blog post, which is entitled “Background checks on prospective employees: Keep required disclosures simple,” does not remove all ambiguity regarding employers’ obligations, it does offer useful information. According to the FTC, “It’s OK to put the required disclosure and your request for their authorization in one document.” Nonetheless, the agency warns: “Just be sure to use clear wording that the prospective employee will understand.”

The FTC notes that many employers get into hot water by “using complicated legal jargon or adding extra acknowledgments or waivers.” It provides the following examples of common missteps:

  • Do not include language that claims to release you from liability for conducting, obtaining, or using the background screening report.
  • Do not include a certification by the prospective employee that all information in his or her job application is accurate.
  • Delete any wording that purports to require the prospective employee to acknowledge that your hiring decisions are based on legitimate non-discriminatory reasons.
  • Get rid of overly broad authorizations that permit the release of information that the FCRA does not allow to be included in a background screening report – for example, bankruptcy filings that are more than ten (10) years old.

As highlighted by the FTC, adding additional language may not only confuse applicants but may also lead to liability under the FCRA. To determine whether your background check disclosures and authorizations pass muster, it is always advisable to work with an experienced attorney.