Pre-Employ Blog

How to Comply With FCRA and EEOC When Hiring

Posted by Bob Mather on February 10, 2016

The hiring process has become a compliance minefield. Not long ago, it was commonplace to ask upfront whether the applicant had a criminal record. Doing so today could result in a discrimination lawsuit

Whether hiring or promoting an existing employee, companies are stuck between two opposing legal risks. On one hand, they must avoid discriminating against those with criminal backgrounds (to comply with FCRA and EEOC). On the other hand, they’re nervous about potential claims of negligent-hiring. 

Compliant stampA good way to avoid possible discrimination claims is to eliminate blanket policies that would reject all applicants with any criminal history. Instead, do a case-by-case analysis of criminal records that consider the nature of the crime, the amount of time that has passed since the crime, and how the crime relates to the position. Formalize your approach in a written company policy.

Let’s say you are an employer screening job applicants or current employees before extending a promotion. Here are the general steps you would take to conduct a FCRA and EEOC-compliant background check:

  • In order to run the background check, the applicant or existing employee must first be notified of it in writing, with a form designed to comply with FCRA requirements.  
  • After the applicant or current employee has received the notification that their background and credit history may be considered in the hiring process, they then have to give their consent. 
  • It is recommended that you retain the consent form for at least two years, which coincides with the statute of limitations period for discrimination complaints.
  • Conduct your background screening of consenting applicants and employees through a third party agency and review the reports.
  • One of your applicants has a criminal record. What do you do? Before you can reject a job applicant or an employee’s promotion, you must adhere to your company’s obligation to the Fair Credit Reporting Act (FCRA). Companies should follow FCRA’s two-step process (also known as adverse action procedures) which allows applicants and employees the opportunity to review, dispute and correct any possible misinformation in the report before adverse action is taken against them. Failure to comply with FCRA’s pre-employment screening process could expose you to costly legal action.

As an employer, you need to be aware of the constantly changing legal landscape that restricts what — and when — employers can ask applicants and employees about their criminal history.  Work closely with your pre-employment screening company to ensure your hiring process remains compliant.  

For more information on compliance during the hiring process, download the guide on 5 tips to avoid FCRA non-compliance.

Download the Guide

Topics: EEOC, hiring compliance, hiring process, hiring, FCRA

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