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Employers Must Comply with Detailed Requirements When Having a Third Party Perform Background Checks

Author: Lee E. Tankle

11/08/2018

Read the full post at HiringToFiring.Law

Employers Must Comply with Detailed Requirements When Having a Third Party Perform Background Checks

Q: Are there certain rules an employer must follow when conducting background checks on employees and prospective employees?

A: The Fair Credit Reporting Act (FCRA) is an often overlooked federal law that imposes stringent technical requirements on employers wishing to procure a “consumer report” from a third-party “consumer reporting agency” for hiring or other employment purposes. Individual FCRA lawsuits and class actions are on the rise and failure to comply with the FCRA can result in harsh financial penalties. This blog post provides a brief overview of the FCRA.

The FCRA’s definition of a “consumer report” is quite broad and includes, but is not limited to, credit reports, criminal history reports, and driving records obtained from a “consumer reporting agency.” Nearly every third-party background check provider will qualify as a “consumer reporting agency” under the FCRA.

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