Attention All Employers! New Background Check (FCRA) Forms Will Be Required By January 1, 2013
Beginning January 1, 2013 employers must adopt new Fair Credit Reporting Act (FCRA) forms, in light of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. This shifts the FCRA authority from the Federal Trade Commission (FTC) to the new Consumer Financial Protection Bureau (CFPB). The new forms announces as well as educates the employees and/or applicants that the CFPB, not the FTC, is the agency that now regulates the employees and applicants rights under FCRA.
Employers must revise Summary of Rights forms they provide to prospective and current employees as required under the Fair Credit Reporting Act (“FCRA”). The FCRA is a federal law which applies whenever a covered employer seeks information from a “consumer reporting agency” regarding an individual’s credit, character, general reputation, personal characteristics, or mode of living. A “consumer reporting agency” is defined quite broadly under the FCRA, resulting in an employer being subject to the FCRA simply by using a third-party vendor to conduct background checks on any of its applicants/employees. The employment hiring process has received increased administrative scrutiny in recent months. Employers need to expect that FCRA forms may continue to be modified and ALL EMPLOYERS need to watch for continued changes for compliance!
FRCA requires employers who use background checks as described above to:
- Furnish forms that disclose to the applicant the employer’s intention to obtain a consumer report and/or investigative consumer report;
- Obtain the applicant’s advance authorization to conduct a background check;
- Notify the applicant in advance of the employer’s intent to take adverse action based on the information contained in the report(s) and provide a free copy of the report (within 60 days);
- Notify the applicant of the adverse action.
Download a copy of the new Summary of Rights: FCRA 2013 Mandatory Dcoument & the SBC Mandatory Document for New Health Care Law which employers are required to use effective January 1, 2013.
References: Devata, P. Q & Riesco, N.B, Seyfarth Shaw. Smith, A.S. (9/13/2012 ). New FCRA Forms, New Enforcement Agency
