Blog · Compliance
The Fair Credit Reporting Act governs how employers request and use background checks. Most compliance trouble comes not from bad intent but from small process gaps. This guide walks the steps in order, from disclosure to adverse action.
Informational, not legal advice. Consult counsel for your specific situation.
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When you use a third party to run a background check for employment, that report is a consumer report and you're subject to the FCRA. In practice this means four things: you must clearly disclose that you'll obtain a report, get the candidate's written authorization, have a permissible purpose, and follow a specific two-step process if you decide not to hire based on what the report shows. State and local laws often add requirements on top. Getting the federal core right is the foundation everything else builds on.
The steps
Follow these steps every time, and build them into your workflow so they can't be skipped.
Before you obtain a report, give the candidate a clear, conspicuous disclosure in a document that contains only the disclosure. No waivers, no extra notices.
Obtain the candidate's written permission to procure the report. This can appear with the disclosure but must be affirmatively agreed to.
You certify to the screening company that you have a permissible purpose (employment), that you disclosed and got consent, and that you'll comply with adverse-action rules.
If the report may lead you to not hire, first send a pre-adverse notice with a copy of the report and the Summary of Rights.
Give the candidate time (commonly around five business days) to review and dispute the report before you decide.
If you proceed, send a final notice with the screening company's contact info and a statement of the candidate's dispute rights.
Beyond the federal core
The FCRA is the floor, not the ceiling. Common overlays to check for every jurisdiction you hire in.
Many states and cities restrict when you can ask about or consider criminal history in the hiring process.
Some states limit how far back non-conviction or certain records can be reported, and clean-slate laws seal eligible records automatically.
EEOC guidance favors weighing the nature of the offense, time passed, and job relevance rather than blanket exclusions.
Certain states require their own disclosures or summaries. Keep these separate from the federal standalone disclosure.
Checklist
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