How the FRICKA does an employer comply with the FCRA (“Fair Credit Reporting Act”)?

You are a prudent employer.  You want to do things the right way and ensure compliance with federal law.

The question is—are you complying with the commonly overlooked federal regulation, the Fair Credit Reporting Act, commonly referred as to the “FCRA?”  Beware: those who fail to comply face serious penalties!  If you perform background checks on your  employees or after you make a job offer to an applicant (during the post-offer, pre-employment stage) using credit reports, criminal background checks, driving records, educational records, or other types of consumer reports, you must comply with the FCRA. 

First, if you intend to conduct a background check that must comply with the FCRA, you must ask the individual to consent in writing before you perform the background check(s) you seek.

The second thing to do to ensure your compliance with the FCRA is to provide the individual with a Summary of Rights. Give this to her in person if possible, otherwise the Summary of Rights can be mailed or electronically and make sure that the font size of the Summary of Rights is 11 or more.

The third thing to do to ensure your compliance is to follow the FCRA’s requirement regarding adverse action if necessary.  When is this necessary?  The adverse action requirement is necessary if the background check you ran on the individual returns information which will require you to take adverse action against her based on the findings of the background check. 

What the "FRCA" do I do after that?  Well, this is a two-part answer.  First, give a pre-adverse action letter along with the background results you uncovered and a copy of the Summary of Rights to the individual and make sure you can prove you delivered this to the individual (e.g., signed acknowledgement confirming receipt or certified mail).  Be sure that in the letter you give the name, address, and phone number of the agency that provided the background information you relied upon to take the adverse action.  You are required to give her 5 to 7 business days to present an explanation for the results you uncovered.  Second, if the information she presents does not change your mind about her background check or if she does not respond within 7 business days, you must send post-adverse action letter confirming the adverse action taken in relation to the background check.

Don’t worry. Please call us if you have any questions associated with the background checks you are conducting with your employees to make sure you are complying with the FCRA!

Daniel N. Ramirez is a named partner at Monty & Ramirez, LLP. He is board certified in labor and employment law by the Texas Board of Specialization and has been recognized as a Rising Star by Super Lawyers magazine.

Daniel's Contact Information:

Email: dramirez@montyramirezlaw.com

Telephone: 281.493.5529

Website: http://www.montyramirezlaw.com