Finding trustworthy and reliable employees can be challenging for any hiring manager. The Fair Credit Reporting Act (FCRA) is a tool used by employers to help streamline the decision-making process. It is legally permissible in most states. Indeed, the FCRA can even be used to evaluate current employees for retention or promotion. Let’s take a look at what this legislation is about and the steps for compliance.
What is the Fair Credit Reporting Act?
The FCRA is governmental legislation, signed into law in 1970, which allows for the releasing of credit reports to potential or current employers. However, it is vital to follow all related laws to ensure equal treatment for all applicants. It is also true for those currently employed at the business or institution. How can this be done?
It is essential to stay in compliance with the regulations established by the Federal Trade Commission (FTC) and other agencies who oversee these standards:
- Employees must be provided with a signed, stand-alone document of the intent to do a background credit check.
- Written permission from the candidate is necessary before any investigations are undertaken.
- All employees, potential or current, should be informed that the information, according to the FTC could be used to influence employment decisions.
Additionally, there are more requirements if you decide not to hire the candidate based on the information found in the formerly potential or current employee’s consumer report. Indeed, they are entitled to:
- Be notified of the decision accompanied by that report that includes the reporting agency’s contact information
- Access to the evidence, in the form of official documentation by the agency, that the agency had no part in the hiring process
- Notification that the candidate may dispute the report within 60 days
Learn More About the Fair Credit Reporting Act
Complying with these regulations may seem daunting, but the professionals at TruDiligence are experts at ensuring that businesses are keeping up with the standards. In fact, contact us to see how we can help you be compliant. We have over 20 years of experience and are dedicated to excellent customer service and long-term relationships with our clients.