The hiring process of new employees involves a great deal of time, patience, and an unwavering skeptical mindset. The decision in this procedure encompasses that you are responsible for choosing the professional that is best fit for your business and it’s culture. To satisfy the requirements of the defined job description, employers will evaluate a candidate’s experience, assess their skillset, and-to ease peace of mind-possibly conduct a background check. Background checks are analyzed to verify a candidate’s employment history, educational history, possible criminal activity, their credit score, and more. Generally, anticipating applicants have begun to expect a background check during this process, however, many organizations are facing severe consequences by violating the terms of a compliant background check in accordance with the FCRA.

What is the FCRA?

Simply put, the Federal Credit Reporting Act is a federal law which regulates the way organizations access consumer credit reports and how they store that information. This law was written and enforced to protect consumer privacy by monitoring how credit institutes share an individuals financial history. Additionally, this law allows consumers pertaining rights, such as:

  • The right to informed consent before a background check is performed.
  • The right to review background check information and correct any mistakes
  • The right to be informed when information from a pre-employment background check about them is used to make decisions that adversely affect them.
  • The right to petition decisions made based on the data in their pre-employment background checks when they believe it is inaccurate
What are businesses doing wrong?

Regularly, employers depend on consumer reports to determine previous criminal history information, driving records, and more, in addition to the candidate’s credit standing. All of this is quite standard, but the manner you collect and store this personal information can put you in the hot seat with the federal government. Here are four bad hiring practices that can get you in trouble:

Relying on “Free Background Check” structures: Delete this from your list before you even think about. With hidden tactics, undisclosed costs, and illegitimate methods, selecting advertisements promoting these “Free” background checks can get you into deeper trouble than you thought possible.

Not notifying the applicant in writing: First off, you must inform the interested applicant you’ll be conducting a background check on them, and specify that this information may influence your hiring decision. To avoid potential litigation with the FCRA, you’ll have to provide this notification in writing as it’s own separate document.

Failing to get applicant consent: Once you’ve both written and informed the applicant that you plan to complete a background check, you must get their permission to do so. Additionally, it’s imperative that you communicate to both the applicant and the third-party background check company that you won’t discriminate against the applicant or misuse the information in violation of state or federal equal opportunity laws.

Failing to dispose of the information properly: The Equal Employment Opportunity Commission (EEOC) states that employers must keep employment records on file for one year. After one year, you must dispose of the information securely by shredding physical documents or thoroughly destroying electronic files.

How can you Ensure Compliance with the FCRA?

While it’s your crucial responsibility to stay up to date with newest laws and regulations pertaining to proper background checks, you may still doubt your policies and procedures on your own. Here are a few ways you can increase your compliance with the FCRA:

  • Perform and audit on your background check forms: Have your organization’s legal counsel review your current background check forms to determine whether they meet compliance regulations.
  • Create an FCRA compliance checklist: Create a checklist to make sure you’re taking all the appropriate measures and precautions throughout the hiring process to avoid violating the FCRA.
  • Train all personnel involved in hiring for compliance: Everyone involved in hiring employees must be trained on FCRA and the methods they must take to ensure compliance.

The truth of the matter is this, while you should be regularly conducting FCRA compliant background checks on your candidates, misleading methods-such as “free” alternatives-may catch your attention. As previously mentioned, the cost of going in this direction, or an insufficient one, can far outweigh the initial cost of performing a legitimate background check-or none at all. If you and your business needs further assistance in your HR area-whether it be audits, personnel training, or even an outside FCRA compliant background check, our team at MCDA CCG, INC. provides solution based services to ensure your peace of mind. Our industry leading experts, quick response rate, and competitive pricing models will ensure that your business is operating up to code so that you can continue to grow. Contact us today!






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