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Recent FCRA lawsuits serve as a good reminder that it is essential to ensure your disclosure and authorization documents comply with federal law.

FCRA Requirements

The Fair Credit Reporting Act (FCRA) is a federal law that was created to protect consumers. It established rules employers must follow during the hiring process. Among them is the stipulation that consumers shall receive clear and conspicuous disclosure and authorization documents before a background check can be run for employment purposes.

Both documents must be devoid of additional content. While there is some room for debate as to exactly what that means, organizations should do everything possible to make sure their documents are concise and compliant.

Common Violations

If an employer is accused of violating the FCRA, the matter could end up in court. This typically happens when a business includes content that cannot be on a disclosure. A few things companies tend to add are:

• Liability waivers that say the applicant holds the organization blameless.
• State law information.
• Details about the position or hiring policies.
• Administrative statements.

Content that does not specifically serve the purpose of the disclosure is never allowed.

Fines

Organizations that are found to violate the FCRA are likely to get fined. This can result in statutory damages between $100 and $1,000 per violation. In many cases, employers are hit with class action lawsuits that feature numerous members. Therefore, they could have to pay a hefty sum.

Following a lawsuit, employers may also incur other costs. For example, they are often required to pay attorney’s fees and costs.

Takeaway For Employers

It is essential to be aware of the FCRA and prepared for compliance. We recommend consulting with counsel to ensure all your documents and practices comply with federal, state and other laws that are in effect where you operate.

Once you have your documents updated, it is equally important to ensure everyone who participates in the hiring process has the latest versions. If you have multiple people who send disclosure and authorization documents to applicants, confirm they are not using outdated forms. This includes verifying any saved documents they have on their computers are up-to-date. An employee might not be aware that the disclosure they use contains extra content.

We Bolster Your Efforts

By working with an accredited Consumer Reporting Agency like Backgrounds Online, you gain a partner that provides educational resources to help you learn about current laws and best practices. Our site also offers sample compliance documents like disclosures and authorizations. Once you have an account with us, you can download and customize them as needed.

When you are ready to screen candidates, volunteers or contractors for employment purposes, please contact us. Our team can help you customize background screening packages for any position and help solve all of your screening challenges. We’re available to assist you Monday through Friday from 5am to 6pm PT.