Fair Credit Reporting Act

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A hot topic in employment law news is a growing movement toward “banning the box” (i.e. implementing laws that bar employers from asking about a criminal history on the initial job application). But whether you properly ask the question on a job application, or inquire about the criminal history later in the hiring process or look into it for current employees, you must be careful to comply with the Fair Credit Reporting Act when you conduct a criminal background check.

The Fair Credit Reporting Act (the “FCRA”) is a federal law governing the reporting, collection and access to consumer information compiled into “consumer reports.” Although people typically think of consumer reports as credit reports that provide information on a consumer’s credit worthiness, the FCRA applies to a much broader spectrum of consumer information. Specifically, the law applies to “consumer reports” that are “any written, oral, or other communication of any information by a consumer reporting agency bearing on a consumer’s credit worthiness, credit standing, credit capacity, character, general reputation, personal characteristics, or mode of living which is used or expected to be used or collected in whole or in part for the purpose of serving as a factor in establishing the consumer’s eligibility for . . . [a variety of reasons including] employment purposes.” 15 U.S.C. § 1681a(d).

If you obtain a criminal background check through a company that is in the business of compiling that kind of information, then you must comply with the FCRA before obtaining the report, before taking any adverse action based on the report, and after taking adverse action based upon the report.

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