Your Rights Under the Fair Credit Reporting Act

How Employers Must Use Background Checks to Evaluate Applicants

Employers use safe background checks to evaluate job applicants and employees for employment, promotion, or retention. Typically, employment background checks include research to corroborate an applicant’s identity claims, criminal histories, driving records, and verification of employment and education claims. Less often but when appropriate to the job, employers may also look at your credit history, civil litigation and bankruptcy history, or even interview colleagues and acquaintances about your past behavior.

Background checks used to make employment decisions are governed by a variety of laws and regulations, most notably the federal Fair Credit Reporting Act.

The FCRA refers to employment background check companies as “consumer reporting agencies”, background checks as “consumer reports”, and applicants or employees on whom reports are provided as “consumers.”

The federal government has published a document called Your Rights Under the Fair Credit Reporting Act to explain your rights under the law. Here’s the thumbnail version of those rights:

  • You must be informed in writing before an employer requests a consumer report about you.
  • The employer must obtain your written authorization before requesting the consumer report. (If you refuse to provide authorization, the employer can take an adverse employment decision based upon your refusal.)
  • If anything on the consumer report may have a negative impact on your employment, the employer must provide you a copy of the consumer report and Your Rights Under the Fair Credit Reporting Act before they take action. Many employers mail this information to consumers before taking the adverse action. There is no legal requirement that employers discuss how the consumer report affected their decision.
  • After taking an action that you may consider negative (not hiring you, terminating your employment, offering you a different position or wage, etc.) based in whole or part on the consumer report, the employer must give you a second notice explaining that they took the action, how to contact the consumer reporting agency if you wish to dispute the information, and other information.
  • You may dispute any information that you believe is incorrect on your consumer report directly with the consumer reporting agency. The agency generally has 30 days to reinvestigate the information and, if it is incorrect, update or remove it from the report. The employer does not have a responsibility to conduct an investigation into disputed information – contact the consumer reporting agency immediately if you think any information is incorrect.

We have compiled a list of frequently asked questions and answers concerning safe background checks that may be helpful.