New Background Check Legislation Puts Employers at Risk of Costly Litigation?

Employers who rely on third party agencies to perform background checks on applicants and employees must comply with the Fair Credit Reporting Act (FCRA).  Among FRCA’s requirements is the obligation to supply applicants and employees who are subject to background checks with the Summary of Your Rights Under the FCRA.  This document must be provided before an employer may take any adverse action (including declining to hire, termination, or declining to promote) against an applicant or employee.  As of September 21, 2018, the Summary of Your Rights Under the FCRA has been updated, and employers must be distributing the updated Summary in order to comply with the law.


Many employers rely on their third party background check agencies to provide them with copies of this document to distribute to applicants and employees.  But if an employer relies on the form supplied by the third party agency, and the form does not comply, the liability (including class action lawsuits, damages, and attorney’s fees) falls back on the employer.  It is critical to make sure that you are using an updated form that complies with the law. 


You can obtain a copy of the updated form here.  For up-to-date compliance with all background check laws and regulations, consult with myHRcounsel to review all of your background check policies, procedures, and documents.