An important part of doing a background check on potential hires is accessing their credit information. While it’s not always the case, credit history can be an effective barometer of how responsible and trustworthy an employee will be once you hire him. That being said, the privacy rights of your potential hires are protected by the Federal Fair Credit Reporting Act (FCRA). Today, I want to explain a few important points about the FCRA that you need to know.
Asking Job Candidates’ Permission
Before you access a job candidate’s consumer report (prepared specifically by a consumer reporting agency), you must notify him. Then, you need to receive written permission from the candidate to access the report. One of the provisions of the FCRA is that an employer must communicate to a job applicant that the consumer report may be used to make a hiring decision.
Notifying Candidates Of Adverse Actions
If you end up not hiring a job candidate because of what you discover on his consumer report, you need to tell him so. It can be done in writing, over the phone, or with an email. But, the adverse action has to be communicated.
Failing To Comply
If you fail to comply with the provisions of the FCRA, you may be held liable. If you don’t ask a potential employee for permission before accessing his consumer report, he can file a lawsuit against your company. Similarly, if you fail to notify him of any adverse action you’ve taken, he can also file a lawsuit.
Using The FCRA For Access
Reviewing a job applicant’s credit history can help you make good hiring decisions. While the FCRA was created to protect the privacy of individuals, it provides employers the opportunity to legally access applicants’ credit information. Its provisions require employers to follow certain rules in doing so. But, these hurdles should not prevent you from checking the credit history of potential employees. The hiring disasters you can avoid in the long-run makes it worthwhile.
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