Developing a comprehensive background screening process safeguards your workforce and clients while ensuring informed hiring and long-term legal compliance for your organization. To avoid noncompliance penalties or potential class action lawsuits, employers must provide background check disclosure forms to any candidates who will be screened. This step aligns with requirements set forth by the Fair Credit Reporting Act (FCRA), as well as state laws in certain jurisdictions.
In this article, we’ll explore FCRA guidelines for background check disclosure forms, including how recent rulings have impacted legal interpretation and best practices for compliant hiring. Whether it’s acquiring consent; providing clear and conspicuous disclosure; using stand alone consent forms; or staying up to date on legislative changes, we’ll outline which steps your organization can take to avoid legal penalties and reputational damage.
Defining Background Check Disclosure Forms
A background check disclosure is used to notify a candidate that their potential employer will complete an individualized background screening as part of the hiring process. These disclosures must offer clear and specific information about the scale of the background check and indicate that the employer may request a consumer report.
Understanding Fair Credit Reporting Act (FCRA) Guidelines
The Fair Credit Reporting Act (FCRA) provides guidelines to protect against the unethical collection or use of individual consumer information by employers, including through the use of consumer reports during employee background screening.
Employers must provide any candidate a disclosure form as a single stand-alone document. Using “clear and conspicuous” language, the document must clearly and simply indicate which searches will be used during the candidate background check and the type of information that will be obtained. According to FCRA guidelines, the disclosure should be provided in a document “that consists solely of the disclosure” and is free of any extraneous information.
Recent legal rulings emphasize this point, penalizing employers that, for instance, include information about state disclosure requirements (or other extraneous material) in the federal disclosure form, or communicate details of the background screening process in unclear or cryptic language. The FCRA defines “clear and conspicuous” language as “reasonably understandable [and] readily noticeable” to the candidate.
Decisions made in the Ninth Circuit have also penalized employers for including a notice of the FCRA’s Summary of Rights in a disclosure notification, as well as liability waivers, information about state background check notices, or information on how to review CRA background check results. Simply put, employers should interpret the FCRA’s “stand alone document” requirement literally and avoid including any supplemental information that could make the disclosure form less immediately comprehensible and clear to candidates.
State Requirements for Disclosure Forms
It’s essential for employers to be aware of any additional state requirements regarding background check disclosures. In California and New York, for example, separate disclosure requirements apply and necessitate the use of a separate state-compliant disclosure form, which may not be combined or presented with a federal disclosure form. Generally speaking, it is best to provide the federal and state disclosure forms as discrete, separate documents.
Acquiring Written Consent from Candidates
In addition to FCRA and state requirements regarding background check disclosure forms, employers must receive authorization from any candidate (through written consent) in order to conduct a background check. Employers are obligated to communicate in writing that a candidate is entitled to refuse this authorization without repercussions. This document must be signed and returned to the employer by the candidate before any screening can be conducted; if a candidate does not submit authorization, any background screening is prohibited.
Employee Screening Legal Requirements: Possible Penalties for Noncompliance
Employers sometimes unwittingly include extraneous material in a background check disclosure; fail to use clear and conspicuous language in a disclosure form; or struggle to navigate distinct federal vs. state requirements. Doing so can lead to sizable financial penalties, reputational harm, lengthy legal battles, or simply time and resources detracted from business development.
In recent years, a number of major companies have been subject to settlements of $1.2 - $2.5 million for FCRA infractions, including for improper use of standalone disclosures, imprecise language in disclosure forms, the inclusion of liability waivers, and even the use of superfluous language or documents like the FCRA’s Summary of Rights. To avoid class action lawsuits and other legal and financial concerns, it’s imperative to work with a background screening provider that ensures legally compliant background screening adapted to meet your organization’s needs based on location, size, industry, and other distinct factors.
Ensure Compliant Hiring Practices with The Orsus Group
Without a thorough understanding of background check disclosure forms, required authorizations, and ongoing regulatory changes, your organization risks exposure to financial, legal, and reputational damage. That’s why The Orsus Group offers comprehensive background screening services to expedite hiring decisions while ensuring peace of mind about long-term legal compliance.
Start today by leveraging Orsus’ background screening and verification services to implement an informed and stress-free hiring process for your organization.