Background Checks and the Fair Credit Reporting Act: Keep It Simple!

Excerpted from JD Surpa by Akerman LLP – HR Defense

Employers who conduct background checks, beware! It might be time to revisit your standard documents and screening processes to ensure they comply with the Fair Credit Reporting Act (FCRA). The number of lawsuits brought under the FCRA has more than doubled since 2009. FRCA litigation was the highest on record at the close of 2019, and continues to rise. Many of these cases have been brought on a class basis for purely procedural violations and resulted in multi-million dollar settlements.

The good news for employers is that in the context of FCRA compliance, less is more, and a quick review of current forms and practices can alleviate any concerns regarding potential exposure.

The FCRA For “Employment Purposes”

The FCRA was enacted to protect consumers by promoting the accuracy, fairness, and privacy of information maintained by consumer reporting agencies. Anytime an employer requests a “consumer report” on an applicant or employee, obligations under the FCRA are triggered. Consumer reports can include a broad range of categories, including driving records, criminal records, credit reports, and other reports from third parties, such as drug tests.

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