EMPLOYER DEADLINE TO UPDATE FCRA NOTICE FOR BACKGROUND CHECK PROGRAMS

If you do background checks on your applicants or employees – please take note! Employers have until January 1, 2013 to update the Fair Credit Reporting Act (“FCRA”) notices required to be provided to prospective or current employees in connection with background checks.  The new Consumer Financial Protection Board (“CFPB”) will now be the agency primarily tasked with enforcing this law, and the updated Summary of Rights form replaces the FTC contact information with the CFPB contact information.

As a reminder, in addition to other FCRA requirements, the Summary of Rights form must be provided to a job applicant or employee prior to obtaining an investigative report from a Credit Reporting Agency (“CRA”). In other words – if you use a vendor to do a background check, you need to use these forms and follow this procedure. Further, if an employer intends to take an adverse action against an applicant or employee based on a report, the employer must first provide a “pre-adverse action” notice to the individual that includes a copy of the report as well as the FCRA Summary of Rights form. The new FCRA Summary of Rights form is available here.

In addition to updating the form for compliance with the CFPB, given the recent focus on background checks by the Equal Employment Opportunity Commission and state agencies, employers should review their background check policies and practices at this time to ensure compliance with all applicable laws.

The contents of this Alert are for informational purposes only,
and do not constitute legal advice. If you have any questions about this Alert,
please contact a member of the Shulman Rogers 
Employment and Labor Law Group or the
Shulman Rogers attorney with whom you regularly work.