The Disclosure and Release Process for Employment Background Check Forms Explained

The most highly litigated area within background services is the disclosure and authorization process.  Background check forms vary at the Federal, State, and Local levels.

Almost weekly, employers are being sued for breakdowns in this process so we will attempt to explain the process employers must follow before ordering a background check form be completed.  The most important thing to understand is that there are federal requirements, as well as local city, county and state requirements that must be met, including pre-adverse action and adverse action notice requirements, which are not discussed here.

FEDERAL REQUIREMENTS

The federal requirements are imposed by the federal Fair Credit Reporting Act (FCRA).  It is a common misconception that the FCRA only imposes requirements when a person’s “credit report” is pulled as part of your background check.  This is not true.  The disclosure and authorization requirements in the FCRA apply to all searches conducted through a background check company when the report is to be used for either employment or tenant screening purposes, among others.

If your purpose is employment screening, you must provide and/or obtain the following documents:

CONSUMER REPORT DISCLOSURE

A stand-alone disclosure must be made in writing using a background check form stating an individual’s information is being requested.  If your background check includes certain types of searches, except reference interviews (discussed below), you should make a standard disclosure that a consumer report (background check) is going to be obtained.  The standard consumer report disclosure must be given to the applicant/employee.

Please note, you should have this sample reviewed by your counsel before using.

AUTHORIZATION PROCESS

In addition to providing the disclosure, you must obtain written authorization to procure the report for employment purposes.  The standard authorization process to allow a report for employment purposes to be produced must be signed by each applicant/employee before any searches can be ordered. Please note, in some circumstances you should review with your counsel before completing the authorization process.

Please note, you should have this sample reviewed by your counsel before using.

SUMMARY OF RIGHTS

It is a best practice recommendation to also provide your applicant/employee with a document called the Summary of Rights as prescribed by the Federal Trade Commission.  We have the document available: The Summary of Rights here.

Please note, you should have this sample reviewed by your counsel before using.

INVESTIGATIVE CONSUMER REPORT DISCLOSURE

If your background check form will also contain information obtained through personal interviews with an applicant’s friends, neighbors, associates or former employers/supervisors/co-workers, you must also make a disclosure that an “investigative consumer report” may be obtained.  The “interview” process whereby questions are asked regarding a subject’s character, mode of living or performance create an “investigative consumer report” and thus, a separate disclosure for this process must be provided.

Please note, you should have this sample reviewed by your counsel before using.

STATE SPECIFIC REQUIREMENTS

California Only

If the applicant or employer have address history or are located in California, there is an additional disclosure that must be provided for all searches. The California Disclosure should be reviewed with your counsel before execution.

New York Only

If the applicant or employer have address history or are located in New York, there is an additional disclosure that must be provided for all searches.  Find a copy of Article 23-A of the New York Corrections Law here.

Other jurisdictions may have additional notice requirements.

CREDIT REPORTS

If your background check forms include a credit report for employment purposes, there are additional state or local notices that must be provided, including (for example):

California – A sample of the California notice that a credit report will be obtained for employment purposes is available by clicking here. Please note, you should have this sample reviewed by your counsel before using.

Vermont – A sample of the Vermont notice that a credit report will be obtained for employment purposes is available by clicking here. Please note, you should have this sample reviewed by your counsel before using.

Other jurisdictions may have additional notice requirements.

CITY/MUNICIPAL REQUIREMENTS

Los Angeles, California

If you are an employer and operate within the City of Los Angeles you may have additional requirements if you are a private employer that employs at least 10 individuals, including the owner(s), management, and supervisors, who perform at least two hours of work on average each week within the geographic boundaries of the City.

The Ordinance also covers job placement and referral agencies and other employment agencies.  If you fall within these guidelines, a notice is to be provided to each applicant notifying them of their rights under the Los Angeles Fair Chance Initiative for Hiring Ordinance.

San Francisco, California

If you are an employer and operate within San Francisco, you must post a notice where it is readily accessible to job applicants and employees pursuant to the Fair Chance Ordinance.  The notice must be posted in English, Spanish and Chinese translations.   Each is available by clicking here: English, Spanish, Chinese.

Other jurisdictions may have additional notice, posting and other process requirements.

DISCLAIMER:  This is not meant to be an exhaustive list and is always subject to change.  As we are not attorneys, no communication from us written, oral or otherwise is to be construed as legal advice, and we expressly disclaim any warranties, responsibilities or damages associated with or arising out of information provided.  You should always consult with your own legal counsel with regard to this information and your specific compliance issues and requirements.