Is Your Background Screening Program Compliant?

By Accutrace, Inc.

Any company doing background screening of their new hires or applicants must be compliant with the Fair Credit Reporting Act (FCRA). 

There are common steps in making sure your company is compliant with the Fair Credit Reporting Act.  Here is the list of basic steps and a discussion of how to be in compliance.

  • Acceptable Purpose
  • Written Disclosure
  • Candidate Authorization
  • Screening Firm Certification
  • Adverse Action

Your company must have a permissible purpose to do a background screening check.  An acceptable purpose includes employment.  You may do a background check for any one of the following purposes:

  • Hiring someone new from outside the company
  • Promoting someone from one job to another
  • Transferring an employee
  • Retaining an employee from leaving the company 

Background Screening Authorization and Disclosure

Before you do the background screening, you must inform the employee that you plan to conduct this check as a condition of employment. It is especially important to disclose that you plan to do a consumer report.  Be sure that this is the only information contained on this type of document.  Do not combine the disclosure with any other information.

Next, you must have the new hire or employee’s authorization to conduct the background check.  It must be in writing and you should tell the employee what is included in the screening. Candidates searching for a job must receive an offer of employment contingent on passing their background screening.

How to Handle Adverse Reports

If you are using a background screening company such as Accutrace, you must also certify several things to the screening company.  You must certify that you are doing the screening as a condition of the candidate’s employment, that you disclosed the background screening process to the employee, and you have obtained their written consent.  You also certify that you will not use the report information to violate any federal or state laws.  And you acknowledge that if you make a negative employment decision on a candidate based on the consumer report provided by the screening firm, that you will follow Adverse Action procedures to be in compliance with the FCRA law. 

If your company makes a negative employment decision and rescinds the candidate’s offer based on the information in their consumer report, you must take the following actions to be in compliance with the law. You are required to disclose to the candidate the negative results so they can take action if they disagree with the results.

The first step the background screening vendor does is to inform you, their client of a negative report.  You will review the results and you may decide not move forward with that candidate.  Next, you will contact the background screening company and let them know your decision: that you have rejected the candidate. You must now follow the Adverse Action process.  You can do the following, or your background screening company can do it for you. Accutrace is one background screening company that can do it for you.

The FCRA rules for an Adverse Action (internal link) are as follows. We will use the example that you used a background screening company and they are doing the Adverse Action process for you. 

First, your vendor will send the candidate a letter in this 2-step process. The first letter sent to the candidate is a “Pre-Adverse Action” letter.  The packet sent to the candidate includes:

  • The Pre-Adverse Action letter
  • The consumer report that generated the Adverse Action letter
  • The FCRA “A Summary of Your Rights Under the Fair Credit Reporting Act” 

The candidate has five days to respond to the Adverse Action letter to dispute its findings and provide corrected information.  If they fail to respond, then a second packet goes out with the Adverse Action letter.  It includes:

  • The Adverse Action letter with a statement that the screening company did not make the decision to take the unfavorable action and cannot explain why the decision was made to rescind the candidate’s offer of employment
  • A notice that the candidate has the right to dispute the accuracy of the information contained in the report and file a disclosure within 60 days
  • If the candidate disputes the report, the background screening company must re-investigate the candidate within 30 days at no charge to the candidate
  • A copy of the consumer report that was received with the negative notification must be sent to the candidate
  • A copy of the FCRA Consumer Rights document must be sent to the candidate

What Should A Good Screening Package Contain? 

When hiring new employees, a company can decide what type and how many services they wish to order from a professional screening company based on the laws of their state and their internal company policies.  The following checks constitute a good core screening employment package: 

  • Address and SSN Trace
  • Nationwide Criminal Database Search
  • 7 Year County Criminal Search
  • Nationwide Sex Offender (this includes the State Sex Offender screening)
  • Sanctions Complete
  • Verify Education
  • Verify Employment
  • Reference Check
  • Professional License Check 

In addition to the services listed above, a company might want to add additional services to the list.  At Accutrace, it’s easy to customize your package to meet your needs and add any service you need to the list.  Here is a list of the individual services that you can add to your package of services at a reasonable cost:

  • Address and SSN Trace
  • Professional Reference Check
  • Professional License Check
  • Criminal History Nationwide Database Search 
  • Statewide Criminal Repository Search
  • FBI Fingerprinting
  • 7 Year County Criminal Search
  • 10 Year County Criminal Search
  • Driving Records History
  • DMV Check
  • Education Verification
  • Employment Verification
  • OIG
  • SAM
  • Nationwide Sex Offender Screening
  • State Sex Offender Screening
  • Terrorist Watch List – Global Report
  • Sanctions Complete
  • CDL – DOT drug testing
  • E-Verify and I-9
  • Pre Adverse Actions and Adverse Action Process

Do you Screen Volunteers?

It’s always a good idea to do a background screening on anyone you hire… you may also legally screen volunteer workers, too.  They are often overlooked because you aren’t paying them a salary, but they may have access to the sensitive information of your business and that can cause serious implications. 

Education is an industry that actually requires all volunteers to be screened due to their work with children. Whether is it a parent volunteer or a otherwise, all folks that work through a school district or community organization with children will require a fingerprinting, child abuse records or more depending on the state and activity.

Screening everyone helps your company avoid employees (and volunteers) that proper screening would identify as those who are addicted to drugs and/or alcohol, or have a criminal record making them susceptible to commit fraud or theft.

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