FCRA Compliance 101: COMMON MISCONCEPTIONS

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. It's never too late to get on the right track!


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 clearly visible, or attached, to each job application.
False: A background check authorization must NEVER be attached to or combined with the application for employment. This is an all too common element in class action lawsuits against corporations.
 
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. While the EEOC has arguably over-stepped it's bounds in some cases against corporations, it's better for applicants and employers to have a strong procedure in place and stay under the radar of the EEOC.

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. Over 50% 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.