Are Your Background Checks Done Properly?

Many employers use background checks to investigate the background of their employees who have fiduciary obligations, such as money management, driving duties, or have high-profile positions with the company. The Fair Credit Reporting Act applies to any of these background checks performed by a consumer reporting agency for an employer. The act requires that, if an employer intends to do a background check, the employer must notify the person in writing—in a document consisting only of the notice and nothing else—that a report may be used. The person must also authorize the procurement of the report.

If an employer determines to refuse to hire a person on the basis of a background report, before it takes any action it must give the person a pre-adverse action disclosure which includes a copy of the report and a written description of the rights that person has under the Fair Credit Reporting Act. After the adverse action is taken, an employer must also (1) provide oral, written, or electronic notice of the adverse action, (2) provide the applicant the name, address, and telephone number of the consumer reporting agency that furnished the report and a statement that the consumer reporting agency did not make the decision and is unable to provide the specific reason for the adverse action, and (3) provide the applicant a notice of his or her right to obtain a free copy of the report for 60 days and the right to dispute with the consumer reporting agency the accuracy or completeness of the information furnished by it.

In Utah, an employer must also have a retention policy that provides for the destruction of any information gleened from a background check for its applicants who are not hired.