Employers who use a third party to conduct background checks on applicants or employees must comply with the requirements of the Fair Credit Reporting Act (“FCRA”). Among those obligations is the duty to inform an applicant or employee before taking an adverse employment action (e.g. not hiring an applicant or firing an employee) based on information obtained through a consumer reporting agency.
The Consumer Financial Protection Bureau (“CFPB”) recently updated its A Summary of Your Rights Under the Fair Credit Reporting Act form. This is the form employers must give to an applicant or employee along with its pre-adverse action notice.
The interim final rule updating this form was issued on September 12, 2018. The updated form became effective on September 21, 2018. This means that, if you have not already, you should quickly transition from the old form to the updated form in order to avoid exposure and potential liability under the Fair Credit Reporting Act (“FCRA”). You should also ensure that any third party provider you use to conduct background checks also uses this updated form.
If you have any legal inquiries regarding this, or any other labor or employment law matter, please contact Jaime Kolligian, Jim Wilkins, or any other K|W|W attorney.