A good business practice is to consult competent legal counsel BEFORE encountering legal issues. This consultation should include a review of your Disclosure/Authorization forms for obtaining background investigation reports from a consumer reporting agency.
On April 28, 2017, the Federal Trade Commission (FTC) issued a blog article entitled “Background checks on prospective employees: Keep required disclosures simple.” This blog post from the FTC has encountered a great degree of criticism for being overly simplistic. And, in the end it doesn’t really provide any clear example of acceptable wording for the Disclosure. However, people should know that virtually all of the violations involving Disclosures were due to employers simply not providing one to consumers before ordering background investigation reports.
Your provider should make it easy to comply. If you have questions or need help, contact us.
We want to highlight the FTC’s basic conclusion in their blog post that Disclosures should be simple to understand. And the Disclosure, in addition to other basic steps, should be given to the consumer.
The blog post reminds employers of the following rules:
If your company uses background screening reports to make hiring decisions, here are some steps the FCRA requires you to take:
- Before you get a background screening report about a prospective employee, disclose to the person that you intend to get the report and then get their written authorization allowing you to do that.
- If the background screening report reveals something that may cause you to decide not to hire the person, you must notify them of the results of the report and provide them with a copy. Next, you have to give them sufficient time to review the report so they can challenge any elements that might be incorrect.
- If you ultimately decide not to hire someone based in whole or in part on the contents of a background screening report, you must provide a notice to that person that states they weren’t hired due at least in part to the result of the background screening report.
And the blog post highlights certain practices that have gotten employers into trouble:
Some companies trip themselves up by using complicated legal jargon or adding extra acknowledgements or waivers. Here are some examples of the kind of things that shouldn’t be in this simple document:
- Don’t include language that claims to release you from liability for conducting, obtaining, or using the background screening report.
- Don’t 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 doesn’t allow to be included in a background screening report – for example, bankruptcies that are more than 10 years old.
It boils down to this: Complying with the FCRA’s disclosure requirement for the use of background screening reports is easy. You can do it in a few sentences. Just include a simple, easy-to-understand notification that you will obtain a background screening report, perhaps with a simple explanation of what information will be included in the report. The request for the prospective employee’s authorization should be in plain language, too. Nothing else is required – and nothing else is permitted by the FCRA. Keep it simple. It’s not just a good idea. It’s the law.