Why You Need An FCRA Compliant Business For Employment Background Checks

Understanding the difference between public records sites and FCRA compliant businesses.

Hiring new employees is one of the most important and difficult responsibilities for any business. It is essential to find candidates who can excel in the position, and become reliable, trustworthy team members.

To accomplish this task, most companies send applicants through a multi-layered process. This includes submitting a resume, attending multiple interviews, filling out paperwork and a pre-employment background screening.

What You Need To Know About Pre-Employment Background Screening

Background screenings are among the most decisive factors in the hiring process. They provide a wealth of information that empowers hiring managers to conclude whether or not a candidate will be offered employment.

There are several key guidelines employers must follow when establishing a background screening process. It is crucial for hiring managers to understand the legal requirements they must adhere to when screening any applicant. First and foremost, employers must obtain background reports from an FCRA compliant business. The FCRA, or Fair Credit Reporting Act regulates the collection and usage of consumer information.

Only an FCRA compliant business, also known as a consumer reporting agency, is legally allowed to provide data that helps employers make hiring decisions. Businesses that do not utilize a compliant consumer reporting agency may be subjected to legal action. If an applicant is turned down based on the results of a background screen not conducted by a compliant business, that person has the right to sue their prospective employer.

When screening applicants, many companies turn to public records sites that promise to provide information about “anyone in the United States.” What these companies may not realize is that a public records, or people search website, is not a consumer reporting agency.

The Difference Between A Public Records Provider And A Consumer Reporting Agency

Public records websites provide information that is collected from a variety of sources, such as magazine subscription cards and voter registration forms. Although they can provide valuable information, these sites are not legally obligated to ensure that they have current or accurate data. These sites all post disclaimers stating that they provide information for reference purposes only. They cannot verify that the data is correct. Information provided by these sites may not legally be used to make hiring decisions.

Consumer reporting agencies are legally bound to provide current and accurate information. They provide authoritative and verified data about an individual’s work history, criminal records, drug testing and other relevant details. This information may be used to make hiring decisions.

Another differentiator between public records sites and consumer reporting agencies involves legal compliance with an FCRA regulation. Applicants must agree to a background check, and be informed in writing before a screening begins. If this does not happen, the applicant has the right to take legal action against the company that initiated a background check.

Consumer reporting agencies manage these mandatory steps. Public records sites, however, do not require any sort of notice for background checks. These sites provide basic background information, such as address histories and possible criminal records. They do not, however, confirm that any of this information is current, accurate or even attributed to the right person. Anyone can use a public records site to run a background check on another person.

Applicants do have the right to refuse a background screening. When this happens, the potential employer is likely to ignore that person’s bid for a job. If however, the applicant agrees to the screening, the potential employer must adhere to all rules specified by the FCRA and enforced by the Federal Trade Commission (FTC).

Guidelines For A Pre-Employment Background Screening

Aside from being notified about a screening, applicants must also be told how they can get a copy of their own background report. If a company refuses to hire an individual based on the results of a background check, then they must follow specific guidelines. First the applicant must receive a pre-adverse action disclosure along with a copy of their consumer report and a FTC document called “A Summary of Your Rights Under the Fair Credit Reporting Act.” After the candidate is formally informed of an adverse action (such as being denied a job) against them, they must also receive an adverse action notice.

All of these steps are managed by consumer reporting agencies, such as MacData Background Screening. Companies that choose not to utilize an FCRA compliant business may be subjected to a lawsuit. When the person who files the suit wins, they may also be entitled to request court costs and other legal fees.

State And Industry Regulations

Consumer reporting agencies, unlike public records sites, are also obligated to keep up with all state, federal and industry regulations. Many states have different laws regarding background screening practices for recruitment. Some industries, especially the trucking industry, also have unique guidelines. An FCRA compliant company will be aware of these regulations, and work with their clients to ensure they remain compliant at all times. Public records sites are under no obligation to be aware of or follow the same regulations. Therefore, companies that use public records sites for background screening purposes take the risk and responsibility of not collecting data properly upon themselves.

Before You Start Screening

FCRA compliant businesses provide a very different service than public records websites. Public records sites sell contact information and other basic details about individuals. These sites are not authorized to provide employment screening services.

FCRA compliant businesses may legally provide pre-employment background checks. They are authorized to conduct drug screening tests, provide identity, criminal records and verification reports, and offer related employment screening services.

Before you screen an applicant, make sure you’re dealing with an FCRA compliant consumer reporting agency. Otherwise you may be subjected to lawsuits based on regulations that were created to protect the privacy of individuals and ensure that applicants are not denied employment due to inaccurate or outdated information.