Do you have written policies and procedures in place?

Do you have written policies and procedures in place?

Policies&ProceduresWith numerous federal class action lawsuits behind us and looming on the horizon, employers should take the time to understand the importance of complying with the Fair Credit Reporting Act when conducting background checks for employment purposes. In a recent case, filed on June 9th, 2015, the plaintiff’s attorney alleges that a car rental company willfully violated the FCRA’s mandates on the usage of background screening reports when considering applicants for employment. This case is important because it demonstrates how proactive handling of applicants can violate the FCRA.

The use of consumer reports, and background screening reports are consumer reports under federal law, is highly regulated. The FCRA places many requirements on agencies like Liberty Screening Services, who provide these reports and many regulations on the employers that utilize them to make hiring decisions.

• Employers must provide applicants with a clear, conspicuous, written disclosure, in a standalone document, and get the applicant’s express written authorization before conducting a background check.
• Before employers take adverse employment action (i.e. denying or revoking the job offer), employers must provide a copy of the consumer report, a written summary of the applicant’s rights under the FCRA, and give the applicant a reasonable amount of time to respond or dispute the accuracy of the report. A minimum of five business days has been established as reasonable for notices delivered by mail.
• After taking adverse action, the employer must again provide the applicant with a copy of their consumer report, their rights under the FCRA, and a notice of the adverse action. The notice is required to provide the applicant with the contact information for the consumer reporting agency who prepared the report.
In the pending case, the plaintiff’s attorneys allege that the employer violated the FCRA by:

• Failing to provide applicants with a clear, conspicuous, written document consisting of only the disclosure that it may procure a consumer report for employment purposes;
• Failing to obtain written authorization for the procurement of consumer reports; and
• Using the reports to make adverse employment decisions without first providing applicants with sufficient and timely notification of its intent to take adverse action
While recruiters and employers value good applicants, the FCRA offers many pitfalls that can be levied against them. The employer in this case had retained their background screening agency to mail a copy of the reports, the rights under the FCRA and notice of possible adverse action on their behalf. But, the plaintiff’s attorneys allege that the employers notified the applicants by phone that they failed the background check – before the consumer reporting agency had an opportunity to send a copy of the report to the applicant.

Having clear, written policies and procedures, and adhering to them, can help prevent the basis for this lawsuit and others like them. When employers work closely with their consumer reporting agencies to ensure compliance, it is important that those policies and procedures are in place. These types of written documents can be shown in a court that the employer did not willfully violate the FCRA, but rather that the violation was done out of their ordinary practice.

To address this case, employers would need to adopt, draft, and distribute a written policy, which is then communicated to their hiring agents and recruiters, that they are not to communicate or take action on a background check until at least five business days from the date of the pre-adverse action notice. In some instances, it may be beneficial to disallow access to consumer reports during this crucial waiting period as waiting is counter-intuitive to the recruiting process.