FTC and EEOC Issue Guidance on FCRA and Background Checks

FTC and EEOC Issue Guidance on FCRA and Background Checks

 by Ethan Ostroff and Bryan Haynes

Hiring decisions are among the most important choices for any employer, but the process can be complex. For the first time, the Federal Trade Commission (FTC) and the Equal Employment Opportunity Commission (EEOC) have jointly issued two short guides on employment background checks that explain the rights and responsibilities of both employers and employees, while also providing tips for complying with both the Fair Credit Reporting Act (FCRA) and federal nondiscrimination laws.

In Background Checks: What Employers Need to Know, the agencies want employers to know that they need written permission from job applicants before getting background reports about them from a company in the business of compiling background information. In addition, when an employer runs a background check through a company in the business of compiling background information, it must comply with the FCRA. Employers also should know that it’s illegal to discriminate based on a person’s race, national origin, sex, religion, disability, or age (40 or older) when requesting or using background information for employment.

At the same time, the FTC and EEOC also issued Background Checks: What Job Applicants and Employees Should Know.  The agencies want job applicants to know that it’s not illegal for potential employers to ask someone about their background as long as the employer does not unlawfully discriminate. Job applicants also should know that if they’ve been turned down for a job or denied a promotion based on information in a background report, they have a right to review the report for accuracy.

The FTC enforces the Fair Credit Reporting Act, the law that protects the privacy and accuracy of the information in credit reports. The EEOC enforces laws against employment discrimination.

It’s also a good idea to review the laws of your state and municipality regarding background reports or information because some states and municipalities regulate the use of that information for employment purposes.

 Read more at Consumer Financial Services Law Monitor by Troutman Sanders LLP. 

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