An employer that uses consumer reporting agencies to get information bearing on a job applicant's or employee's credit worthiness, credit standing, credit capacity, character, general reputation, personal characteristics, or mode of living in order to make employment decisions needs to be aware of its obligations under the Fair Credit Reporting Act ("FCRA"). The FCRA was recently amended, and requires the employer, before obtaining any such report, to:
- provide to the job applicant or employee clear and conspicuous written notice that a consumer report may be obtained;
- provide to the job applicant or employee the name and address of the consumer reporting agency;
- obtain the job applicant's or employee's written authorization to get the report;
- obtain a separate written authorization for the release of medical information if such information is being sought; and
- certify to the consumer reporting agency that
- the employer has made the required disclosure and has obtained the required authorization;
- the employer will comply with the FCRA if the information contained in the report results in an adverse employment decision regarding the applicant or employee;
- the employer will not use the information obtained, in violation of the FCRA or any applicable equal employment opportunity laws; and
- the employer will provide the applicant or employee with a copy of the report and a description of his or her rights under the FCRA if the employer decides to take adverse employment action based on the report.
The FCRA also requires the employer, before taking any adverse action based on the report, to:
- provide the applicant or employee with notice of the adverse employment action the employer intends to take;
- provide the applicant or employee with a copy of the report;
- provide the name, address and phone number of the company issuing the report; and
- provide the applicant or employee with a description of his or her rights under the FCRA, including his or her right to get a free copy of the reporting agency's file within 60 days and to dispute the information in the report directly with the agency.
Employers should also be aware that consumer reporting agencies can no longer include in their reports any criminal background information more than seven years old for any applicant or employee earning less than $75,000 per year.