Background Screening Compliance Information

TruDiligence takes seriously the need for compliance with all applicable federal, state and local laws and regulations. This page is meant to be a resource from which you can visit links to regulatory sites, obtain answers to your questions and download compliance-related release forms and documents. However, we are not attorneys, so nothing on this page is intended to be legal opinion or advice. We strongly recommend that you consult with legal counsel regarding your specific circumstances.

The Regulatory Act

The federal Fair Credit Reporting Act (FCRA), 15 U.S.C. 1681 et seq., is designed to protect individuals by promoting accuracy, fairness and privacy of information in the file of every consumer reporting agency. Consumer reporting agencies typically are thought of as credit bureaus, such as Experian, Equifax and TransUnion, which collect and report information on consumers. However, background screening firms such as TruDiligence also are classified as consumer reporting agencies by the FCRA. A common misconception is that the FCRA regulations apply only to reports that contain credit information. This is untrue. The FCRA actually applies to all background screening conducted through a third-party consumer reporting agency.

The complete text of the FCRA is available here.

Procedure

Outlined below are the specific procedures that must be followed when ordering a report from a consumer reporting agency that is subject to FCRA compliance:

1. 1. Employer discloses in writing to applicant/employee that he/she will be the subject of a background screening as part of the employment selection process or another employment-related process.
   2. Employer obtains signed authorization for preparation of a background report from applicant/employee.
   3. Employer provides information about the applicant/employee to the background screening company and requests background screening.
   4. Background screening company conducts the background checks that were requested by employer and prepares background report.
   5. Background screening company provides background report to the employer and, if requested by applicant/employee, provides copy to applicant/employee.
   6. Employer reviews completed background report and determines if any information will adversely impact employment decision. If no adverse impact results from information in the background report, the employer will proceed with other steps in the employment process.

NOTE: Steps 7-10 are used only when an employer is considering an adverse employment action.

1. If employer is considering an adverse employment action based in whole or in part on information in the background report, the employer must a) notify applicant/employee, b) provide a copy of the background report to the applicant/employee, and c) provide the applicant/employee with a copy of “A Summary of Your Rights Under the Fair Credit Reporting Act.” (This process sometimes is called “pre-adverse action.”)
2. Applicant/employee contacts background screening company if she/he disputes any information in background report.
3. Background screening company re-investigates any disputed items of information and issues an updated report to employer and applicant/employee.
4. Employer reviews updated report and makes final employment decision. If the employment decision is adverse, a notice of adverse action is sent to applicant/employee. (This process sometimes is called “final adverse action.”)

Reporting Restrictions

Employers should be aware that the FCRA (as well as state law) places limitations on information that can be reported by a background screening company. Section 605 of the FCRA prohibits a background screening company from reporting the following:

• Bankruptcy cases that antedate the report by more than 10 years
• Paid tax liens that antedate the report by more than seven years
• Accounts placed for collection or charged to profit and loss that antedate the report by more than seven years
• Civil suits, civil judgments and records of arrest that antedate the report by more than seven years
• Any other adverse information, other than records of convictions, that antedate the report by more than seven years
• Any arrest record older than seven years. Convictions are reportable for an unlimited timeframe subject to some state level restrictions.

For employees reasonably expected to earn $75,000 or more per year, the above time limits do not apply. Employers also should be aware that, in addition to the limitations found in the FCRA, a number of states place limitations on what information may be reported by background screening companies. Information commonly prohibited includes arrest records, convictions that antedate the report by a specified numbers of years, dismissed cases and discharged cases.

Compliance Based Research Policies
FCRA Sections 607 and 613 further address the need for accuracy in reporting information for employment purposes. Specifically, this relates to information that is derived from searching independent or third-party databases that are not government owned or sponsored. Examples include, but may not be limited to, the National Criminal Index and National Sex Offender registries.

To strictly comply with the FCRA, if a search of one of these included databases is conducted and a reportable record is found, a direct county-level court record search will be conducted. This county-level research will validate the information being reported back by the database, thus maintaining the strictest FCRA compliance. The necessary county-level searches will be automatically added and billed accordingly.