Author: David B. Weisenfeld, XpertHR Editor

When the ball drops at Times Square to ring in 2013, the nation's employers will encounter new requirements under the Fair Credit Reporting Act (FCRA).

Effective January 1, employers that utilize background checks must use a new "Summary of Rights" form to notify job applicants and employees of their rights under the FCRA.

Under the changes, employers must make clear that the newly-created Consumer Financial Protection Bureau (CFPB), and not the Federal Trade Commission (FTC), is the agency that applicants and employees should contact with questions about their FCRA rights.

The employer will have to give this notification in any pre-adverse action notification that stems from the results of a background check. It also must provide this notification before obtaining a background check if the report includes information stemming from personal interviews conducted by a consumer reporting agency.

These regulations are a byproduct of the CFPB taking control of overseeing the Fair Credit Reporting Act from the FTC. Employers must begin using the new Summary of Rights form on or before January 1.

Additional Resources

Recruiting and Hiring > Preemployment Screening and Testing > Complying With the Fair Credit Reporting Act

Background Check Policy