Time for a F.C.R.A. / EEOC Compliance Check Up?

Time for a F.C.R.A. / EEOC Compliance Check Up?

The legal landscape for Human Resource professionals is a constantly changing one. Never make the assumption that your Fair Credit Reporting Act (F.C.R.A) compliance is handled or monitored by another person, another department, or solely by the third party applicant background screening service. Assuming that your applicant screening processes are F.C.R.A. compliant, without having and enforcing a documented process, is a near guarantee that they’re not and can lead your company down a dangerous road.

Do any of these common F.C.R.A. compliance misconceptions sound familiar at your organization?  If they do, your company may be at risk for compliance violations from the Consumer Financial Protection Bureau, EEOC, or a class action lawsuit. 

1. We don’t run credit reports on applicants, so the Fair Credit Reporting Act doesn’t apply to our applicant screening practices.
False: If you use any third party company to provide you applicant screening services, you are obtaining a type of consumer report and are obligated to abide by the laws of the F.C.R.A.

 2. The background screening provider we contract with says THEY are Fair Credit Reporting Act compliant, which makes us compliant by default. If we’re not, it’s their liability.
False: Your applicant screening provider may have a great program for F.C.R.A compliance but it is impossible for the applicant screening provider to uphold the client’s end of compliance as it involves the hiring managers decision process and actions.
3. An applicant background check authorization should be a part of, or attached to, each job application.

False: A background check authorization must NEVER be attached to or combined with the application for employment.

4. Our company is located in an “employ at will” state so we’re not obligated to inform an applicant if they are disqualified because of their background check.
False: “Employ at will” does not override the applicant’s rights under the Fair Credit Reporting Act. If you use a third party screening provider, you’re obligated to provide a pre-adverse and an adverse action notification if the decision is based in any part due to the result of the background check. 
5. We use an online database that provides us a “nationwide criminal record search”.  If a serious criminal record is reported from this database search, we have the right to withdraw the offer of employment.

False: Not without further research. The results of a nationwide criminal record search (which go by many different brand names), must be followed up with direct research from the jurisdiction in which the record originated in order to confirm the information is up to date.

6. Our company policy of NOT employing anyone who has a felony criminal conviction on their record in the last seven years is specific enough to be F.C.R.A. compliant and appease the EEOC.
False: Even with specific guidelines such as “Felony” and “Seven Years”, you’ll need more of a matrix like decision process to show you’re not making a blanket judgment. The EEOC has argued in recent cases against BMW and Dollar General, that “disparate impact” can result from anything less than a case by case assessment.

The bottom line
If you’re not certain who handles each aspect of your F.C.R.A compliance, you’re probably not compliant one hundred percent of the time. Ask your applicant screening provider for documentation defining their role in F.C.R.A compliance, as well as what is expected of your company, the end user. You may be surprised to learn that simple steps are missing from your procedures, or that basic compliance requirements are not being met. If so, you’re not alone. Nearly half of the Human Resource professionals we polled in an anonymous survey could not define their role in providing F.C.R.A. compliance while screening job applicants.

Don’t wait until you are legally obligated to provide documentation of your F.C.R.A. compliance procedures to the EEOC or a class action attorney. A simple F.C.R.A checkup can help identify problems now and prevent serious legal issues down the road. Now is the time to get your F.C.R.A compliance back on track! For a basic compliance checklist, email FCRAChecklist@safescreener.com or call 888.578.8600 x113. We’re here to help!

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Brad Jones is the Director of Operations for Background Screening Consultants LLC.  Brad is an active member of the National Association of Professional Background Screeners and serves on the Chicago Chamber of Commerce’s Workplace Well-being Committee.  For more information on applicant screening services, or a free F.C.R.A. Compliance Checklist, please call 888.578.8600 x113 or email bjones@safescreener.com.

6 Responses

  1. Excellent article. Very informative and well written. The only points I might add are to #3 where employers have a separate form expressing consent most likely in an electronic form that is completed during the application process. You are correct that it is not part of the actual application but it is part of the application process. The electronic signature used as consent has come under scrutiny in recent months by two lawsuits indicating the consent had to be written. Although the lawsuits have been settled, it brings up a major issue when companies accept an electronic signature when the FCRA does not explicitly allow it although a staff opinion was given that does gives a different interpretation. The other point regards to #5 about the nationwide criminal search. As we all know, a true nationwide search does not exist due to several factors such as states not disseminating records or providing bulk data. However, this does bring up a good point that a search on a howard jones could result in hundreds of records even with the same date of birth. It would be logical for a company to investigate further just by sending a researcher to the county or state repository to inquire further. I truly believe this is one of the major issues with background checks and why we have become a litigious society simply because those who review the records are not educated enough to understand that a person who lives in Philadelphia most likely did not reside in Texas unless of course a SS# verification with an address history can prove residence in Texas. If educating customers in light of these records, I believe we would be less inclined to deny applicants merely based on the fact a criminal record popped up and would not jump the gun.

  2. Very good points Peter. I believe knowledgeable comments add depth to the original article. Your input is truly appreciated!

  3. Nice Job! For certain types of employment I believe it's absolutely imperative that the employer knows who their dealing with before they hire. Maybe it's not so important for other positions…I don't know, but why shouldn't the hiring agency have a right to know. It should be nothing personal….It's business. Great job, thanks. For some good related information, please go here http://www.thecreditreportagencies.com

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