Using a Consumer Reporting Agency to Run Applicant Background Checks

Using a Consumer Reporting Agency to Run Applicant Background Checks

 

As a business owner, one of your more challenging tasks is hiring employees – preferably good employees, however you may define them. No matter your definition of a “good” employee, conducting a background check on job applicants will help in managing the risk of making the wrong decision.

 

 

 

But, what if you don’t have the time, desire or ability to conduct a background check yourself? In that case, you can use a consumer reporting agency (CRA), a third-party service provider that creates reports from background information it has compiled. Background checks from CRAs may include information such as an applicant’s previous employment, credit information, education, professional license verification, drug and alcohol testing, criminal records, or volunteer activity. Check out the variety of CRAs here.

 

 

 

Before requesting a background check for a job applicant from a CRA, however, there are certain legal requirements you must comply with – no exceptions:

 

 

 

  1. Inform the applicant in writing that you may use information in the background check for hiring decisions.
  2. Make sure the applicant gives you written permission to get the background check.
  3. Certify to your CRA that you have complied with #1 and #2, and that you will not illegally discriminate against the applicant as a result of the information on the background check.

 

 

 

The consequences of failing to comply with these simple requirements include fines, penalties, and potentially civil and/or criminal lawsuits. Negligent non-compliance exposes an employer to actual damages to an applicant or employee, as well as the applicant or employee’s attorney fees. If non-compliance is deemed willful, punitive damages may be added to the mix.

 

 

 

Make sure you know all of your obligations under the Fair Credit Reporting Act (the federal law governing background checks) and applicable state law when requesting and utilizing background checks during your hiring process. The rules are so easy to follow that there really is no excuse for non-compliance.

 

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Bill Egan

Bill Egan

I have 30+ years of experience representing executives, business owners, private enterprises and small-to-midsize public companies as an advisor, counselor and advocate on matters relating to the employment relationship. Informed by years of experience with both routine and unusual employment relationships and workplace situations, I bring a pragmatic, realistic and results-oriented perspective to issues arising in the workplace. Read Bill's Bio.

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