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What Employers Should Know About the Fair Credit Reporting Act

Author: Steven J. Luckner and Jennifer Woodruff, Ogletree Deakins

The Fair Credit Reporting Act (FCRA) provides the rules for employers to follow in order to obtain and use background check reports from a third party vendor, otherwise known as a consumer reporting agency (CRA), for employment purposes (e.g., to evaluate an applicant for employment, promotion, transfer, continued employment, statutory obligations/requirements, etc.). The FCRA covers all types of background check reports received from a CRA, including:

  • Criminal reports;
  • Credit checks;
  • Investigative consumer reports (e.g., employment verification, professional reference checks, other types of interviews conducted by the CRA with someone who has personal knowledge of the individual); and
  • Motor vehicle reports (MVRs).

The FCRA imposes the following primary requirements on employers:

  • Disclosure and authorization requirements;
  • Certification requirements;
  • Pre-adverse action notification requirements; and
  • Adverse action notification requirements.