April 24 Tip of the Week

“Updated Summary of Rights”

            Employers who conduct employee background checks should be familiar with the Fair Credit Reporting Act, a federal law that governs the use of consumer credit checks and is designed to ensure the fairness, accuracy, and privacy of the information contained in consumer credit reports.  When using consumer credit report information in hiring decisions, employers are required to disclose to applicants and employees that a consumer report may be used for employment decisions and to obtain consent from the individual for such use.  If an adverse employment action appears to be likely when using such a report, the employer must notify the applicant or employee of that fact and provide them with a copy of the report and a copy of their rights under the Act.

            When following through on the requirements of the law, employers should be aware that the Consumer Financial Protection Bureau has issued a new “A Summary of Your Rights Under the Fair Credit Reporting Act.”  This new document was issued as part of a final rule to make non-substantive corrections and updates to Bureau and other Federal agency contact information.  The final rule, issued in March, took effect on April 19, 2023.  Employers should ensure that, when using consumer credit reports in employment decisions, they are providing employees with the updated copy of the summary of rights.  The new version of this document can be found here:  https://files.consumerfinance.gov/f/201410_cfpb_summary_your-rights-under-fcra.pdf. 

            myHRcounsel is here to provide you with answers to any questions regarding the requirements of the FCRA or any other labor and employment law issue.  Our team of attorneys is at your service!