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Understanding Background Check Disclosures

April 07, 2022 | By Jeramy Gordon

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Background checks are important for employers to make smart hiring decisions and protect their organization from risk. But before you choose to conduct employment background screening, there is one step that every employer must take to remain compliant. The Fair Credit Reporting Act (FCRA) mandates that before ordering a background check, the employer must provide a clear and conspicuous disclosure form, consisting solely of the disclosure; and obtain authorization to conduct the background check. Employers who fail to comply with provisions in the FCRA may be subject to lawsuits, fines, and reputational risk.

What is a Background Check Disclosure?

A background check disclosure is a document that lets a candidate know the employer will be conducting a background check on the individual for employment purposes. The background check disclosure provides precise details on the background check and discloses that the employer may request a consumer report.

What Employers Need to Know about Background Check Disclosures

The FCRA is a federal law that regulates the use and collection of consumer information, which applies directly to credit reports, consumer reports (“background checks”), investigative consumer reports, and more. This means that employers must provide the required disclosure forms to minimize hiring risks and protect their organization.

Before your organization conducts a background check, you should follow these steps:

*Note, this blog post should not be construed as legal advice and you should always consult an attorney before starting or altering the background check process. 

Step 1: Provide a Disclosure Form to all Candidates

The FCRA requires the disclosure form to be a stand-alone document that provides notice to the candidate that a consumer report may be obtained for employment purposes.

This form may include what searches will be included in the background check.

The FCRA requires that employers provide a “clear and conspicuous” written notice, which means that your disclosure form must contain easy to understand language. Certain states, such as California and New York, may also have their own disclosure requirements.

It is recommended California disclosure be separate, and depending on the other state requirements, they may be included in other documents.

Step 2: Receive Authorization from Your Candidate

Employers are not allowed to conduct a background check on an employee or candidate without receiving authorization. You will need to provide and receive a separate document for the authorization, which will request written consent for a background check.

What Not to Include in Your Disclosure Forms

Compliant disclosure forms cannot contain any extraneous or irrelevant language, such as information around job requirements, release of liability, or adverse action process. Including any additional information can land you in hot water with the FCRA, so it’s best to steer clear of liability.

Provide Compliant Disclosures with Accurate Background

By consistently using these best practices throughout the disclosure process, your organization can conduct compliant background checks each time. As the leading provider of background screening solutions, you can count on Accurate Background for a smooth and seamless background check process. At Accurate, we deliver up-to-date disclosure forms that meet all state and federal laws, helping your organization remain compliant and avoid costly lawsuits.

Contact the Accurate team today to learn more.

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