Compliance with the Fair Credit Reporting Act (FCRA)

This information is presented for general educational purposes and is provided solely for the convenience of its readers. It is not a substitute for legal advice. Consultation with qualified legal counsel is recommended for all matters of employment law.

This document addresses US federal requirements as found in the Fair Credit Reporting Act (FCRA),15 U.S.C. 1681 et seq. related to the procurement and use of consumer reports and investigative consumer reports (also known as background reports) for employment purposes. This document does not address background check requirements found in State law, International law, or regulated industries.

Summary of the Background Check Process

1. Employer discloses in writing to applicant/employee that he/she will be the subject of a background report as part of the employment selection process.
   
   
2. Employer obtains signed authorization for preparation of a background report from applicant/employee.
   
   
3. Employer provides information about the applicant/employee to the background screening company and requests background screening.
   
   
4. Background screening company conducts the background checks which were requested by employer and prepares background report.
   
   
5. Background screening company provides background report to the employer and, if requested by applicant/employee, provides copy to applicant/employee.
   
   
6. Employer reviews completed background report and determines if any information will adversely impact employment decision. If no adverse impact results from information in the background report, the employer will proceed with other steps in the employment process.
   
   
7. If employer is considering an adverse employment action based in whole or part on information in the background report, the employer must:
   a) notify applicant/employee;
   b) provide a copy of the background report; and
   c) provide the document, “A Summary of Your Rights under the Fair Credit Reporting Act.”
   (This process is sometimes called “Pre-Adverse Action” or “Preliminary Adverse Action” or “First Notice.”)
   
   
8. Applicant/employee contacts background screening company if s/he disputes any information in background report.
   
   
9. Background screening company re-investigates any disputed items of information and issues updated report to employer and applicant/employee.
   
   
10. Employer reviews updated report and makes final employment decision. If the employment decision is adverse, a notice of adverse action is sent to applicant/employee. (This process is sometimes called “Final Adverse Action.”)