When you apply for a job and get an interview, your potential employer will likely do some extra research on you, including a background check. Employers must comply with federal law when they use a company to run a background check. (The law doesn’t apply if the company uses a background check furnished by the government.) If an employer or the company running the background check does not follow federal law, then it could face both civil and criminal liability.
The Fair Credit Reporting Act
The Fair Credit Reporting Act (FCRA) is the federal law that governs companies that provide background checks to employers and the employers requesting the background checks. The FCRA was created to ensure that consumer reporting agencies (CRAs) report accurate information about consumers (including potential employees) to potential employers, insurers, etc. It protects potential employees from having their privacy violated and from having inaccurate information provided to employers by CRAs. The FCRA also protects potential employees from employers, if the employer uses the potential employee’s information in an impermissible way.
FCRA Requirements for Employers
The FCRA sets forth requirements for both CRAs and employers. Employers must have a permissible purpose for getting information about a potential employee from a CRA. This means employers must only use background information to make employment decisions, which includes promotions of current employees as well as hiring new employees. It is not permissible for employers to use background information to discriminate against a potential employee based on race, religion, sex, age, national origin, color, disability, or genetic information. When requesting a background check, the employer must first inform you in writing separate from your application that the background information may be used to decide whether you hire you. 15 U.S.C. § 1681k. The employer is also required to get your written consent in writing to run a background check on you, which may be part of the written document used to inform you about the background check. Furthermore, if an employer uses the information from your background check to decide not to hire you, to fire you, or not to promote you based on any information in your background check, then they must inform you and give you three specific pieces of information:
- The employer must “give you the name, address, and phone number of the company that supplied the credit report or background information;”
- The employer must give you a statement that the CRA that gave the employer the background information “didn’t make the decision to take the adverse action and can’t give you any specific reasons for it.”
- The employer must “give you a notice of your right to dispute the accuracy or completeness of any information in your report to get an additional free report from the company that supplied the credit or other background information if you ask for it within 60 days.”
FCRA Requirements for Credit Reporting Agencies
The CRA running a background check on you for the employer must comply with certain FCRA requirements. The CRA must use “reasonable procedures” to protect “the confidentiality, accuracy, relevancy, and proper utilization” of the potential employee’s information contained in the background check. 15 U.S.C. § 1681e. CRAs must not report background information to employers that do not have a permissible use for the information.
Sometimes CRAs gather the information complied in background checks from entities known as “furnishers.” Furnishers must also comply with the FCRA and provide accurate information to CRAs.
What happens if the employer, CRA, or furnisher fails to comply with the FCRA?
The FCRA provides civil remedies to people who sustained damages as a result of an FCRA violation. If an employer, CRA, or furnisher willfully violates the FCRA, they are liable to the potential employee for damages between $100 and $1,000. If an employer obtains a background check “under false pretenses or knowingly without a permissible purpose,” then they are liable to the employee for damages of $1,000 or greater. The court may also impose “punitive damage” upon the entity that violated the FCRA. In addition, if you win a civil action under the FCRA, the judge may also force the employer, CRA, or furnisher to pay “reasonable attorney’s fees.” 15 U.S.C. § 1681n.
If an employer negligently violates the FCRA, the potential employee may recover “actual damages sustained . . . as a result of the failure” to comply. If the potential employee is successful in recovering damages from the employer, then reasonable attorney’s fees may be awarded by the judge. 15 U.S.C § 1681o.
We know the FCRA is complicated, and we want to help you protect your rights. If you think an employer turned you down based on information in your background check, do not hesitate to contact us at Unconvicted or call 888-400-5730.