Do Your Background Checks Comply with FCRA Requirements?

Posted: February 14, 2022

Do your background checks comply with FCRA Requirements? This is an important question that every employer must routinely ask or else they could face significant consequences. “FCRA Compliance” means meeting the specific requirements set forth in the Fair Credit Reporting Act, a federal law that requires employers to conduct background checks that are transparent and accurate.

Lawsuits pertaining to FCRA requirements are on the rise as Lowe’s was recently hit with a class action lawsuit over FCRA compliance, claiming that that it unlawfully used job applicants’ consumer reports to make adverse employment decisions without first providing copies of the reports in question. This accusation violates the Fair Credit Reporting Act (FCRA), which prohibits an employer from taking adverse action against a consumer based on the contents of their report without providing a copy.

The case against Lowe’s states that the plaintiff applied for a sales specialist position at a Florida Lowe’s store and was denied employment based on information found in his background report. While in some cases, it’s legal for an employer to deny a candidate a job based on information in a background report if a candidate doesn’t job because of information in a background report , the employer must follow the appropriate steps of notifying the candidate. The key point in the case against Lowe’s is that the plaintiff did not receive a copy of the report nor was he was given an opportunity to discuss its contents prior to being denied employment. The lawsuit says that if Lowe’s had provided the plaintiff with a copy of his consumer report and allowed him a chance to discuss the information on it, the hiring manager would have been informed that the plaintiff had no felony convictions, contrary to what the report stated.

The suit claims that there was a previous lawsuit that was almost identical to the current one accusing Lowe’s of the same violation, although there have been “no substantive changes in the way in which Lowe’s uses background checks in the employment context.” This lawsuit is yet another reminder of how important it is to make sure that your company’s background checks comply with FCRA requirements.

It’s always a good time to review your background screening procedures and documents. It is necessary to ensure that your disclosure is compliant according to the FCRA and best practice guidelines. It is also a great time to review adverse action process to ensure that you are sending both notices at the proper times and are complying with any applicable State laws.

Contact us today at (877) 360-4636 for a free assessment of your current background screening procedures. Our FCRA-certified compliance team will help you determine whether you need to make any changes.

Information and assessment provided by Info Cubic are for educational purposes only. Info Cubic does not provide legal advice and recommends that you review all procedures and documents with Legal Counsel prior to implementation to guarantee compliance with all applicable state and federal laws and regulations.