4 Steps to Understanding Employment Background Checks & the FCRA

This past week I have bounced from meeting to meeting and one thing I have heard repeatedly is there is a lot of confusion on employment background checks and the requirements of the Fair Credit Reporting Act. Does it apply to us?

How do I handle adverse action?

Why do I have to follow the FCRA if I am not ordering credit reports?

So I thought it would be much easier to put together a 4 minute training video to explain the process.

If you have questions on the FCRA requirements, do not hesitate to contact us.

7 Keys to Understanding Employee Background Checks & the FCRA

employee background checksThe federal Fair Credit Reporting Act is a terribly confusing law that can have serious legal implications for non-compliance.    A recent lawsuit (Hunter, et al v. First Transit Inc.) illustrates how serious FCRA non-compliance can be. First Transit, or First Student bus transportation as many of you may be familiar, recently settled a class action lawsuit for $5.9 million for willful non-compliance of the FCRA by not obtaining authorizations before performing criminal background checks and also for firing or not hiring applicants because of a criminal background check and failing tp provide the required FCRA notices.

Compliance with the FCRA has produced a growing number of lawsuits in recent years so I thought it was important to take a few minutes and look at the 7 keys to understanding employee background checks and the FCRA:

1.       When Does the FCRA Apply?  The simple answer is if you use a 3rd party background screening firm for employee background checks then the FCRA applies.  FCRA compliance is not required of volunteers.

2.       Step One:  All Applicants.  All applicants for employment MUST receive a Disclosure Statement. 

3.       Step Two:  All Applicants:  All applicants for employment MUST provide a written or electronic authorization for the background check.  The disclosure statement and authorization can be one document.

The final two steps only apply if you are taking adverse action that is based “in whole” or “part” on the background screening report.  What does that mean? 

Well, an example of “in whole” would be a report contains a criminal record for rape.  The criminal record is the basis for the adverse action. 

An example of “in part” would be a report contains a criminal conviction for underage drinking.  You determine the record itself does not exclude the applicant.  However, on the application they indicated they did NOT have any criminal convictions.  So the adverse action is based on the dishonestly.  However, this is partly based on the report because you would not know about the dishonestly without the background screening report.  Make sense? 

So what does the FCRA require of adverse action?  It mandates a 2 step process:

4.       Pre-Adverse Action.  The first step in the process is a Pre-Adverse Action Letter which includes a copy of the background screening report and a Summary of Rights Under the FCRA.  Basically an applicant has a right to see what is going to be used against them and has the right to challenge the report if they feel the information is incorrect. 

5.       Adverse Action.  After waiting a “reasonable amount of time” which has been interpreted as 5 business days you are required to issue an Adverse Action Letter which denies the position.  There is no requirement to hold the position during the waiting period.

2 final keys to understanding the FCRA:

6.       Disputes.  A background screening firm is required to re-investigate if an applicant initiates a legitimate challenge to the background screening report.  These challenges are handled by the screening firm and if there was an error then a corrected report is issued after the re-investigation.

7.       Limit on Non-Convictions.  The FCRA limits the reporting of non-convictions (arrests, pre-trial diversions, etc.) to 7 years UNLESS the salary of the positions is $75K or greater.

The key takeaway is non-compliance of the FCRA can result in serious legal consequences.  

Safe Hiring Solutions is committed to helping you comply with the FCRA.  We provide sample forms and guidance.  You can view a recent recorded webinar:  Understanding the FCRA.

Do you have any questions about the FCRA?  You are not alone if you do.  This law is quirky and confusing.     

Criminal Record Check: “That’s My Brother From Another Mother”

criminal record checkHave you ever heard something and you just couldn’t get it out of your head?  A great song.  A snappy advertising jingle. Thanks to Bernie Focker I have used his famous quote “that’s my brother from another mother” over and over for the past  7 years.  Just slips right off my tongue when I walk into our pee wee baseball dugout and slap knuckles with the little Royals.    Thanks Bernie.

So what does the movie Meet the Fockers have anything to do with a criminal record check?  Actually, this quote from Bernie is one I hear over and over again from applicants who did not get a job because of a criminal record:  “that’s not me.”  “It belongs to someone else….a brother from another mother.”

Thanks to the Fair Credit Reporting Act, we have a legal obligation to reinvestigate legitimate challenges to the accuracy of a criminal record check.  I support this.  Nobody should be denied employment, a place to live or a chance to volunteer because a court made a mistake.

And yes the courts do make mistakes.  They are human.  Study after study indicates that 98.7% of inmates are innocent.   Well, large sample studies conducted on the prison yard.

What kind of mistakes are we talking about?  The most common mistakes made by courts are:

  • Date of Birth Entered Incorrectly
  • Felony was Reduced to Misdemeanor After Probation
  • Conviction Converted to Conditional Dismissal
  • Post Conviction Relief
  • Expungement

As you can see by this list, most of the mistakes made on a criminal record check are not misidentification but clerical errors.  Information either entered incorrectly or final dispositions from the courts that are not entered into the public access terminals.

So I use the Bernie Focker filter to determine if the challenge is legitimate or illegitimate.  Here is an example of one that flunked the test:  “That is not my criminal record.  That is my sister.  We have the same name and social security number.”

background screeningNow, as a kid I loved the Bob Newhart Show.  I loved Larry, his brother Darryl and his other brother Darryl.  But come on, that was Vermont in 1972.  Today, giving all your children the same name is illegal under federal law.   OK, maybe not illegal but it is not common.  And it is not possible to share an SSN.

How dumb do I sound on the phone?  Ok, don’t answer that.

Here is one that passed the test:  “It was my cousin.  He has been in trouble his whole life.  He is always using family member names and SSN’s when arrested.”  True that.  We had flagged the report before returning it to our client and after a lengthy conversation with the applicant and going through the entire case file we determined it was his cousin.  Record not reported.

The biggest red flag from an applicant is when they say it is not me, I have never been in trouble, I would not do anything like that.  Yet, the courts show sheet after sheet of criminal records with name, DOB, SSN and address matches.

I have heard every excuse under the sun about how a criminal record check is wrong and how it was not them.  However, time after time it is in fact the applicant’s criminal record.

Why?  Because we take extreme caution in making sure all criminal records we report belong to the applicant.  We ask our researchers to cross check with social security numbers when possible, or dates of birth, or a driver’s license number and sometimes we have to settle for an address that we match up with their address history search.

The bottom line is we take reporting criminal records very seriously.  Yes, I have a jaded sense of humor from more than 20 years working as a detective and violence prevention consultant.  But nobody at Safe Hiring Solutions takes reporting a criminal record lightly.  We go the extra mile to ensure the record can be cross verified with other identifiers.

So the next time your applicant gives you the it’s not me excuse, send them to us.  We will evaluate it, reinvestigate if required, and let you know the outcome.

Contact Us today to make sure your criminal record checks are the best in the industry.

Your Turn:

Did you know applicants have a right to challenge a background screening report?