4 Things You Need to Know About FRCA Compliance


4 Things You Need to Know About FRCA Compliance

The Fair Credit Reporting Act (FCRA) is a must-know for all employers, recruiters, and HR staff. It regulates how consumer reporting agencies use personal information. This federal law is an important one to stay in compliance with, legally and ethically. Here are 4 things you need to know to stay FCRA compliant:

  1. Background checks can only be run for a “Permissable Purpose” under the FCRA (employment purposes being one)

The person you are checking has to be someone you or the company you represent employs in some way, even if they are a volunteer. Usually they are run for hiring purposes, but not always. You could also run a background check on someone you might be promoting, for example. Don’t try to run an FCRA background check on your date through your company!

  1. Have a disclosure form ready, and have it authorized

Proper disclosure is incredibly important to being FCRA compliant. You must be sure you’ve informed anyone who might be employed by you that you may obtain a background check as a condition of their employment. Obtaining authorization is done by providing the candidate or employee a disclosure form, and having him or her acknowledge that he or she gives consent to the background check.

  1. Provide your screening agency with certain certifications

Your background check provider will need certain assurances from you before they can do their job, which are officially labeled as “certifications”. Your screening partner must be assured that you will only use the check for a specific authorized and identified “Permissiable Purpose” under the FCRA, like employment purposes, and that you have provided proper disclosure and obtained proper written authorization from the candidate or employee. Second, they need to know that you will not use the report(s) in violation of any applicable Federal or State equal employment opportunity law or regulation. Lastly, they need to be assured that you will follow the proper procedures if something in the report causes you to make an adverse decision.

  1. Have a plan for less-than-great screening results

Speaking of an adverse hiring decision, you need to be ready, just in case. There are a few steps to take if a background check comes back with results that will negatively affect your hiring decision. The first is to alert the candidate, giving them notice of information obtained from a consumer reporting agency that may affect your hiring decision. There is a dispute period, which allows the candidate to contest the information provided in their background check. If the information is upheld, you will need to inform the candidate of your final hiring decision.

Even if you are outsourcing your screening process, these in-house steps taken to ensure FCRA compliance can prevent a lot of headache and legal trouble. Start putting them into action today to avoid problems before they arise!

Partner with a background screening company that makes FCRA compliance simple. Contact ClearStar today!


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