Understanding FCRA Compliance
The Fair Credit Reporting Act (FCRA) is a federal law enacted on October 26, 1970. This legislation governs the collection, dissemination, and usage of consumer credit information, with the primary objective of ensuring accuracy, fairness, and privacy in credit reporting practices. Over the years, the FCRA has evolved through numerous amendments, extending its scope beyond consumer credit reports to encompass various forms of background checks. For employers, adherence to the FCRA mandates the acquisition of accurate and lawful background checks, thereby safeguarding job applicants and preventing the misuse of their information.
Key Aspects of FCRA Compliance in Background Checks
Permissible Purpose You must have a permissible purpose for ordering information from Phoenix Global Employment Screening. Certification of this permissible purpose must be provided prior to the fulfillment of any request. Employment purposes are considered permissible under the FCRA. Employers must not only ensure they have a permissible purpose but also explicitly inform the individual that the information gathered could influence employment decisions, obtaining their explicit authorization beforehand.
FCRA Background Checks: Pre-Request Requirements
Pre-Request Obligations Employers must adhere to specific requirements before requesting a consumer report. These background checks, known as consumer reports, may include information from various sources, such as criminal records. When utilizing consumer reports for employment decisions, including hiring, retention, promotion, or reassignment, compliance with the FCRA is mandatory, as enforced by the Federal Trade Commission (FTC).
Disclosure Employers must inform the applicant or employee, in writing and as a stand-alone document, that their consumer report may be used for employment-related decisions. This document, referred to as the Disclosure, must meet explicit requirements, including not being embedded within an employment application.
Authorization Written permission from the applicant or employee must be obtained. This authorization can be part of the Disclosure document.
Certification to PGES Employers must certify to Phoenix Global Employment Screening (PGES) that:
The applicant or employee has been notified and permission has been obtained.
All FCRA requirements have been met.
The information will not be misused or lead to discriminatory practices, in accordance with federal or state equal opportunity laws.
For assistance with your background screening needs,
please contact us at 1-888-889-PGES (7437).
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