As the nation celebrates the achievements of American workers this Labor Day weekend, it’s hard to ignore the 13.9 million people who remain unemployed. Millions of Americans are searching for work, and have been for months. The weak job market means employers are being flooded with candidates.
To weed out candidates, employers often turn to background checks. In a poll conducted by The Society for Human Resource Management, 73% of employers reported conducting criminal background checks on all job candidates. There are many companies specializing in employment screening and each uses its own method to gather background data. Unfortunately, many consumers have contacted us to report that they were the subject of a background check containing inaccurate data. It’s important for job seekers to be aware of their rights under the Fair Credit Reporting Act (FCRA), a law that regulates the consumer reporting industry.
Before a background check is ordered, an employer must:
- Give notice that a background check is required.
- Get written permission from the applicant.
If a screening company provides negative information gathered from public records, it either has to tell the applicant that it provided negative information to the employer or it has to take steps to make sure the information is accurate.
After the report comes back, if the employer might not hire because of something in the background check, it must give the jobseeker a copy of the report and a summary of rights under the FCRA.
If the employer doesn’t hire because of information in the background check, it must give the applicant notice (oral, written, or electronic). Notice must include:
- Name, address, phone number of the screening company.
- A statement that the consumer reporting agency (CRA), the screening company, did not make the decision (not to hire).
- Notice of the right to dispute accuracy or completeness of information in the report.
- Notice of the right to get another report, free of charge, within 60 days.
The individual can file a dispute with the screening company over inaccurate information:
- The screening company has 30 days to investigate a dispute. If, during that 30 day period, the applicant files additional information, the investigation may be extended by another 15 days.
- If information cannot be verified, it must be deleted.
- The screening company must provide written notice of the results of investigation no later than five business days after the investigation is completed.
- If information cannot be verified and is deleted, the consumer can ask that a revised report be sent to anyone who received an employment report within the last two years.
More employers are also obtaining credit reports to make hiring decisions, a practice we at Privacy Rights Clearinghouse are opposed to for a number of reasons. If you live in one of the following six states, you should be aware that state law limits the use of credit reports for job screening: Oregon, Washington, Hawaii, Illinois, Connecticut and Maryland. The Equal Employment Opportunity Commission examined this issue in depth at an October 2010 meeting.
If you’d like to learn more about employment background checks, read our Fact Sheet 16: Employment Background Checks: A Jobseeker’s Guide.