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Legal Obligations and Background Checks

Posted in News Articles on 12/04/2009

If my company does background checks, what are my legal obligations?  This is a question we get from clients all the time.  The best answer to this question is to consult with your company’s legal department; however, this article will provide an overview of the basic steps that should be taken.

First of all, if you are working with a background screening company such as BackTrack, you’ll need to sign an Agreement for Service which states that you will be ordering background checks solely for employment purposes, and that you will follow all applicable state and federal rules in using the background checks.

Prior to obtaining a background check on any current or prospective employee, you’ll need to obtain the person’s signed consent form in which the applicant allows your company to obtain the requested information.  BackTrack does provide release authorizations free of charge to our clients for this purpose.

Once a background check has been completed, your company can decide whether or not to move forward with the offer of a job.  If your company chooses not to offer a position to an applicant based in whole or in part on the background check, the Fair Credit Reporting Act (FCRA) has specific procedures that must be followed.  These procedures, calledAdverse Action, require the employer to provide a copy of the report to the applicant along with a letter stating that that due to something in the background check, an offer may not be extended.  This is called Pre-Adverse Action, and companies must allow the applicant a reasonable amount of time to dispute the information.  If the applicant does dispute the information, the background screening company must also follow procedures and re-investigate any information the applicant disputes.  If the applicant does not dispute the information or if the re-investigation shows that the information is the same, then your company can move forward with the Adverse Action letter rescinding the job offer.

Need more information on this topic, visit our Resources or Forms pages for more details or call BackTrack at 800-991-9694.

***This information contained here is intended to provide useful information on the topic covered, but should not be construed as legal advice or legal opinion.***