Common Questions About FCRA Background Check Rules
Updated: Jul 7
The federal Fair Credit Reporting Act (15 USC §1681 et seq.) (FCRA) covers "consumer reports" issued for multiple purposes, and this is a source of confusion to many individuals. In addition to covering credit checks, the FCRA also governs employment background checks for the purposes of "hiring, promotion, retention, or reassignment." The FCRA does not require employers to conduct employment background checks. But the law sets a national standard that employers must follow in employment screening. In some states, laws may give an employee more rights than the FCRA.
Do I have a right to know when a background check is requested?
Yes, if it is not performed by the employer. The background check must be prepared by an outside company -- a "consumer reporting agency" or business that "for monetary fees, dues, or on a cooperative nonprofit basis, regularly engages in ... assembling ... information on consumers for the purpose of furnishing consumer reports to third parties." (FCRA §603f)
Under the FCRA, the employer must obtain the applicant's written authorization before the background check is conducted. The authorization must be on a document separate from all other documents such as an employment application. In California, when an employer obtains permission for a background check, the applicant or employee should also be told that they may request a copy of the report. The FCRA, in contrast, says the subject is entitled to a copy of the report if a pre-adverse notice is given.
Under federal law, if the employer uses information from the consumer report for an "adverse action" - that is, denying the job applicant, terminating the employee, rescinding a job offer, or denying a promotion - it must take the following steps:
● Before the adverse action is taken, the employer must give the applicant a "pre-adverse action disclosure." This includes a copy of the report and an explanation of the consumer's rights under the FCRA.
● After the adverse action is taken, the individual must be given an "adverse action notice." This document must contain the name, address, and phone number of the employment screening company, a statement that this company did not make the adverse decision, rather than the employer did, and a notice that the individual has the right to dispute the accuracy or completeness of any of the information in the report.
Modified disclosure and adverse action procedures apply to positions subject to U.S. Department of Transportation (DOT) regulations such as truck drivers. The DOT has independent authority to set qualifications for workers in transportation industries.
Can a background check report include a case that was expunged?
According to the FTC, it should not. In August 2012, the agency fined a background screening company $2.6 million for, among other things, reporting criminal records that had been expunged. In addition, the FTC charged the company with failing to follow other FCRA provisions, including failure to provide consumers with a copy of their background check report.
I am applying for a job in a profession that is required by law to perform background checks, such as in law enforcement, childcare, or a hospital. Will this affect my rights under the Fair Credit Reporting Act?
Maybe. When a specific law requires a background check, that same law usually outlines the rights employees have. These rights may not necessarily follow the Fair Credit Reporting Act, the background screening law that governs "consumer reports." However, if a third-party screening company is hired, the FCRA would apply.
Law enforcement agencies or state licensing authorities may have direct access to state and federal criminal records databases, which many private employers do not have. A government-run database is not a consumer reporting agency and is not subject to the FCRA. Whether you have a right to get your report or make corrections may be spelled out in the background check forms you signed or perhaps on the agency's website.
However, individuals are generally allowed to access their criminal records files maintained by a state or federal agency. To learn how to access your state’s criminal records data files, visit the website of your state Attorney General. The federal Privacy Act also gives you the right to request records maintained about you. To check federal criminal records, contact the Federal Bureau of Investigation.
Each state offers its own definition of expungement, based on different rules and laws. Generally, expungement can be viewed as the process to "removing from general review" the records pertaining to a case. But the records may not completely "disappear" and may still be available to law enforcement.
To learn more about FCRA Background Check Rules, call 718-674-1245 or click here.