Tips for Staying Compliant During the Pre-Employment Screening Process

Compliant background checks are like the backstage detectives of hiring and risk management. They dig into a person’s past while making sure all the rules and laws are followed. Adjudication is a big part of this; it’s the practice of setting standards and guidelines for how relevant and serious these things are for the job or purpose of the check. Then there’s adverse action, which is all about giving folks a chance to explain or fix any mix-ups found in their checks before any tough decision about rescinding a job offer is made. It’s all about being fair and making sure everyone gets a fair go when their background is being checked. These two things show how background checks can be done carefully and by the book while also thinking about the people involved.

We’ve pulled together a few tips for educating your Talent team on compliant background checks and how to find the best background check providers who are equipped and educated in navigating key aspects of compliance surrounding the screening process.

What Makes a Background Check Compliant?

The Fair Credit and Reporting Act (FCRA) is a federal law that regulates the accuracy, fairness, and privacy of sensitive and personal information disclosed in consumer reports. It outlines protocols for collecting background information when working with a consumer reporting agency. The law stipulates civil and statutory penalties for non-compliance. 

FCRA defines a consumer report as “any written, oral, or other communication of any information by a consumer reporting agency (CRA) bearing on a consumer’s credit worthiness, credit standing, character, general reputation, personal characteristics, or mode of living, which is used or expected to be used or collected in whole or in part to serve as a factor in establishing the consumer’s eligibility” for lending, housing, insurance, or employment purposes.

Employer background checks are consumer reports, and employers must comply with the regulations. Specifically, FCRA regulations apply to records that are often part of an employee background check, such as:

  • Criminal records
  • Civil lawsuits
  • Driving records
  • Medical records
  • Employment & Education Verifications

Tips for Complying with FCRA in the Background Check Process

Disclosure and Pre-Authorization

Compliance with FCRA starts before you conduct the background check. You must share a clear and conspicuous disclosure statement with all candidates informing them that a background check may be obtained for employment purposes.. The disclosure must be included in a stand-alone document and must not contain extraneous information. As such, the background check disclosure cannot be attached to a job application, liability waivers, or other interview materials.  

The disclosure commonly includes the following: 

  • A statement that the employer may request a background check for employment purposes from a background check provider. 
  • The types of information that will be provided in a background check report. 
  • The background check provider’s contact information 

Additionally, you must capture the candidate’s pre-authorization signature on a separate consent form. If you’re working with a background check provider, you must certify that you got permission from the candidate to conduct a background check and that you will not misuse the information or discriminate against them.

Learn more about your candidate’s rights in background screenings here

Adjudication and the Adverse Action Process

If your adjudication process prompts you to take adverse action, the FCRA has an approach to help protect your company from penalties. The pre-adverse action notice allows your candidate to discuss or dispute the report before the final action. 

If you’ve discovered potentially disqualifying information in the adjudication process, you are required to send the candidate a pre-adverse action letter that includes the following:

  1. A copy of the consumer report
  2. A copy of a document called “A Summary of Your Rights Under the Fair Credit Reporting Act” (your background check provider will give you this document)

If after a reasonable amount of time after sending the pre-adverse action letter you decide to make a final adverse action, you must send a final adverse action letter including the following:

  1. Notice of the adverse decision
  2. Name, address, and telephone number of background screening provider
  3. A statement that the background screening provider did not make the adverse decision and is unable to provide the specific reasons why the adverse decision was made
  4. Notice of the right to obtain a copy of the background check report from the background screening provider within 60 days
  5. Notice of the right to dispute with the background screening provider any inaccurate information

Background Check Providers – Why Accreditation Matters for Compliant Screening 

The Professional Background Screening Association (PBSA) is a non-profit organization that provides background screening providers and consumers with educational opportunities, practical guidance, and resources regarding legal compliance and ethical business practices.  The Association currently represents over 880 member companies engaged in employment and tenant background screening across the United States and around the globe. 

The PBSA developed the Background Screening Organization Accreditation Program (BSOAP). An accredited consumer reporting agency, like a background check provider, must show that they’re following strict standards to ensure they’re in line with the FCRA. These accredited companies must keep records of their policies and procedures for each aspect covered by the BSOAP standards. Sure, unaccredited providers could still follow the FCRA rules, but no official agency holds them accountable, and they won’t be subject to audits to prove their compliance. 

Check out our blog about the PBSA and why it’s essential when evaluating background check providers. 

The background check is a crucial step in the hiring process, impacting candidates who have invested time and effort in pursuing job opportunities with your company. It’s essential to ensure that the information screened is relevant and accurate. 

Educating your Talent team and partnering with accredited background check providers like InCheck can help you manage this complex process effectively.

At InCheck, we help companies with their screening needs. If you’re interested in learning more about our services and how we can help you, please reach out to schedule a call with an In Check expert.

Disclaimer: This blog is for general informational purposes only and should not be construed as legal advice.

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