Background check disclosures & authorizations: what you need to know
One of the most important – and legally required – steps in the pre-employment stage is informing a candidate of the intent to run a background check. The candidate must also give authorization for the background check to run. Disclosures and authorizations are essential to avoid violating FCRA rules, potential fines and costly lawsuits.
Background Check Disclosures
Disclosing to a candidate that you intend to run a background check sounds like a straightforward enough task. However, the steady rise in lawsuits brought by candidates centered around disclosures tells a different story. The FCRA has specific requirements of what a disclosure should and should not include and it’s imperative to follow them closely.
Disclosures must be standalone, simple & clear
When informing the candidate that you intend to run a background check (also known as ‘consumer report’), the FCRA requires that a disclosure must be presented in writing, and as a standalone document that is separate from an employment application. Note: the form can be presented either electronically or in print.
The language in the document needs to be clear (simply written and easy to understand) and conspicuous (noticeable and separate from other pre-employment documentation). When we say clear, we’re talking down to the punctuation. A recent court case found that a misplaced semicolon made the phrasing of a company’s disclosure document unclear and ruled in favor of the candidate. Another case in progress is an FCRA class action lawsuit over a footnote deemed as extraneous information that does not comply with the clarity requirement.
Background Check Authorizations
Once the intention to run a candidate background check has been disclosed, an employer must also obtain candidate authorization that a check can be pulled. The FCRA authorization needs to be signed by the candidate either digitally or in person. Obtaining candidate permission protects potential employers and the record should be kept if the authorization comes into question.
Our Perfect Fit platform gives our clients the ability to send electronic disclosures and authorizations via email invitation. Once e-signed, the forms are then stored within the client account for later reference. This removes the burden of gathering and retaining printed forms and streamlines the pre-employment process.
Authorizations should secure candidate permission for employment screening
Similar to disclosure requirements, an authorization form should not include unnecessary information unrelated to the authorization of running a pre-employment background check. For example, do not include the job description, other steps related to the hiring process or info about the company.
Within the FCRA language, background checks are referred to as ‘consumer reports.’ In recent rulings, the courts have determined that providing a definition for the term consumer report is appropriate as candidates may be unfamiliar with the industry terminology.
State-Specific Disclosures
Depending on your or your candidate’s location, different disclosure and authorization forms may be required by state. It is good practice to check that you are using the correct regional and most up-to-date form.
Location-specific forms can be tricky for businesses hiring remote employees in a variety of locations. We simplify this process, so that all you have to do is send your applicant a link to start the disclosure and authorization process. Based on the information the application provides, we present them with the appropriate forms for their e-signature.
Conclusion
The FCRA is highly technical and interpretation of Disclosure and Authorization forms can be scrupulous. Following the FCRA requirements and the above key points should keep you on the right track in your hiring process. As always, the Perfect Fit team is here to help answer your questions or concerns! For more on FCRA requirements check out our guide to running legal and compliant FCRA background checks.
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