The Fair Credit Reporting Act (FCRA) regulates how employers perform an employment background check on job applicants. Contrary to popular belief, this federal law doesn’t cover just credit background checks. It covers any background report, such as driving records and criminal records obtained from a “consumer reporting agency” (CRA).
Under the FCRA, you’re typically free to conduct an employment background check and use the information if you have a clear business interest, such as hiring, firing, reassigning or promoting someone.
Editor’s Note: For more information on the Fair Credit Reporting Act, visit www.BusinessManagementDaily.com.
But you can’t run a job background check on a whim. You must receive the person’s written permission before obtaining the report.
Two trends now compel more employers to conduct an employment background check. First, terrorism threats and incidents of workplace violence have made companies more aware of the need for job background checks.
Second, “negligent hiring” lawsuits are on the rise. Companies have a “duty of care” to protect workers and customers from employees the company knew—or should have known—posed a security risk.
Learn about the FCRA notification rules you must follow before obtaining a consumer report on an applicant or employee, or withholding a job offer based on an employment background check, in Employment Background Check Guidelines.