All employers must comply with the regulations of the Federal Consumer Reporting Act (FCRA)–whether you have one employee or one thousand! Make sure you’re in compliance, and avoid making these common mistakes:
1. Using social media sites or a Google search as a background check: Browsing an applicant’s Facebook or MySpace page, or researching them through an internet search engine does not equal a background check.
2. Performing the background check yourself: Employers must ensure they are in compliance with the FCRA. The best, easiest way to accomplish this is by using the services of a reputable background screening company.
3. Burying the screening approval language in the application: You must provide a separate document to obtain the applicant’s approval for credit and background checks.
4. Failing to obtain the applicant’s signature: Applicant signatures must be obtained before you run any type of credit checks.
5. Improper disclosure when rejecting an applicant: If you reject an applicant because of poor credit history, provide them a copy of their credit report, along with the reason they will not be hired.
6. Failure to obtain permission from online applicants: You cannot simply state online that you will be performing a background screening and/or credit check—you must have an electronic approval from the applicant.
7. Inconsistency: You cannot require a background and credit check for some applicants, but not others. Inconsistent policy enforcement could lead to accusations of discrimination.
8. Believing that FCRA doesn’t apply: Even small employers are subject to the law. There is no distinction made between a one-person business and a huge corporation.
9. Not obtaining permission from current employees: If you decide to run credit checks on your employees after they were hired, you must disclose your intention and get their approval in writing.
10. Improper disposal of information: Employers must comply with the Fair and Accurate Credit Transactions Act of 2003 (FACTA), an amendment to the FCRA. This law requires proper disposal for information contained in or derived from a consumer report. That means no tossing reports in the trash can—they must be shredded or otherwise destroyed so they cannot be reconstructed. Digital information must be destroyed before a computer is sold or donated.