Reminders for employers regarding Fair Credit Reporting Act compliance
More and more employers have fallen victim to lawsuits brought on by former applicants for violating the Fair Credit Reporting Act, a federal law that requires employers to take specific actions when conducting credit checks in order to allow job applicants a fair chance at the position for which they are applying. As a reminder, here are a few items you must do in your efforts to comply with the Fair Credit Reporting Act. 1) Check your state, county and city laws. If you are considering conducting credit checks on potential hires — or already do so — review the laws for your area, or hire a background screening company to review what laws you must comply with, before you begin. Every employer in the United States must comply with the Fair Credit Reporting Act, but cities, states and counties may have additional laws that must be followed as well. (For instance, New York City recently banned pre-employment credit checks altogether.) It’s good to know what you must comply with before determining or updating a credit-checking policy for your business. 2) Put the consumer report disclosure on its own page in the job application. Several employers have come under fire — including Michaels craft stores and Dollar Tree — for not providing adequate disclosure about credit checks. Employers must provide written warning in a way that stands out from the rest of the job application. Employers are legally required to put this disclosure on its own page in the job application, separatel from any other information (including at-will notices), and this disclosure must be signed by the applicant separately before the company can conduct any screening. 3) Get your paperwork in order. If for some reason, the results of the consumer report preclude an applicant from being hired, the employer must provide a copy of the consumer report to the applicant, as well as notice that adverse action is to be taken. The applicant must then be provided with a reasonable period of time (at least five business days is fairly standard), during which he or she may dispute errors in the credit report. The employer must also provide a statement of the applicant’s rights under credit-checking laws, and if no errors are found in the credit report, the employer must provide a second adverse-action notice. For more information about ensuring your business’ compliance with the Fair Credit Reporting Act, including what documents your company needs, contact Mind Your Business.]]>
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