Resources & Tips


Fair Credit Reporting Act (FCRA)

The Fair Credit Reporting Act is enforced by the Federal Trade Commission (FTC) and the Equal Employment Opportunity Commission (EEOC).  Any entity cannot conduct background checks based on gender, race, ethnicity, religious beliefs, genetic information, or disability.


Creating a Sound Background Check Policy

Developing a background check policy is just as critical as conducting one.  It is important for employers to know that they are open and subjected to the ever-changing rules of the EEOC if policies are adhered to in accordance to in accordance to Federal, State and municipal regulations, while possibly being exposed to negligent hiring.

Developing a background check policy is just as critical as conducting one.  A sound policy is one that takes into consideration the following:

  • The position
  • If there is a criminal history, is it relevant to the position
  • Has the candidate or employee been given an opportunity to explain the circumstances
  • Make sure it is compliant with the Fair Credit Reporting Act and any other Federal, State and municipal regulations

These determining factors should be a part of the hiring or promotional process, but not the totality.  To ensure reduced exposure to negligent hiring or EEOC penalties, always consult an employment attorney.

What To Consider When Conducting an Employment Screening

  1. Know what the vacant position’s job description
    It is important to have a job description and understand the responsibilities required for the position.  This will assist in determining what level of screening is required.  As well, a financial position may require screening elements that are not necessary in a receptionist position.
  2. Be thorough
    It may seem easier to cut costs by cutting corners.  However, a company’s reputation, licenses or business relationships can be directly impacted if an employer is negligent by not conducting a background screening.
  3. Be Consistent
    The screening should be consistent for the position throughout the organization, not driven by the person to hold the position.
  4. Be Compliant
    Background screenings are subject to Federal, State and local laws. The Fair Credit Reporting Act (FCRA) regulations are administered by the Employment Equal Opportunity Commission (EEOC) as well as the Federal Trade Commission (FTC).   FCRA regulates any collection, dissemination and use of consumer credit.

    Employment policies should reflect appropriate federal, state specific and local regulations and should be updated regularly.  It is also a good idea to have an employment attorney to assist in ensuring an organization’s regulatory compliance.

  5. Inform the Applicants’ of their Rights
    There are adverse effects that can result from a background screening.  All organizations should provide the appropriate adverse forms to applicants that informs them of their right to appeal an adverse decision made on employment, promotions, demotions or terminations.