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A study conducted by webrecon.com indicates that they are seeing an increase in lawsuits based on allegations of FCRA violations.

FCRA Lawsuits

WebRecon LLC produces an annual review of litigation for claims of violations against the Fair Credit Reporting Act (FCRA) and other laws. In 2022, their report showed that the number of lawsuits had increased over what they saw in 2021.

The study explained that in December of 2022, there were 447 FCRA lawsuits. That was an increase from November, which had 414. From an annual perspective, the group noted that there were 5,597 complaints brought forth in 2022, compared to 5,407 the year before.

While the numbers did not jump drastically, they do provide a reminder that it is imperative for employers to be compliant with these laws.

Keeping Compliant

The FCRA is a federal law that created rules employers must follow during the background screening process. Failure to comply can lead to allegations and costly fees. Here are some important tips on how to remain compliant.

Make sure your Disclosure and Authorization forms are current and concise.
The FCRA mandates that a Disclosure must be a document which consists only of the Disclosure itself. This means it cannot contain any other content, such as liability waivers or even administrative statements. The same basic principles are in play for the Authorization, which is a document an applicant must sign to authorize a background screening. Organizations can play it safe by keeping both forms succinct and free of any extra information.

Review your adverse action process.
After running a background check, you might consider taking an adverse action, such as denial of employment, based on criminal records you review. Before you do, the applicant must be informed in writing and given an opportunity to respond and file a dispute. If the person says the records are not accurate or are outdated, then the agency that compiled the background check must conduct a reinvestigation. Employers are required to hold off on finalizing a decision until they have the final result.

Don’t Forget State Laws

When screening potential employees, volunteers or applicants, complying with applicable state laws is equally important. Many states, counties and cities have Second Chance laws that are designed to help people with non-serious criminal records find employment.

These laws vary by location. Some prohibit employers from inquiring about an applicant’s criminal records during the initial stages of the hiring process. Others require organizations to individually assess any convictions that are returned in a background investigation. We recommend consulting with legal counsel to ensure you are adhering to all laws that are in effect where you operate.

Running Background Checks

While there are various laws that are intended to help people with lower-level convictions find jobs and other necessities, running comprehensive background checks remains an essential part of the hiring process. These reports help employers make informed decisions, demonstrate due diligence and maintain safe workplaces.

When your organization is hiring, please contact us. Our experienced team can help you customize screening packages that meet your specific needs, industry regulations and applicable laws. We are available to assist you Monday through Friday from 5am to 6pm PT.