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The Business of Background Checks During a Pandemic


Seyfarth Synopsis: As the number of class actions alleging FCRA violations continues to skyrocket, it is critical for California employers to understand the basics of all laws affecting employment screening programs. This blog examines those laws and provides practical considerations for employers looking to hire or rehire employees during a shutdown affecting critical sources of information needed for background checks.

While Covid-19 has inspired shutdowns of many businesses, “essential businesses” in the retail and healthcare industries and elsewhere need to hire employees as fast as ever. These companies face a problem: the shutdowns have limited public access to the most common sources of information for background checks. What are California employers to do when needing to onboard employees pending completion of a background check in the face of a pandemic?

California is notoriously rife with regulation as to how employers may obtain and consider background check information for hiring and personnel decisions. (California also regulates employer use of credit reports for employment purposes. For more on Lab. Code § 1024. 5, see our blog California Employers: Beware The

Background Check Bugaboos.) Given the risk of litigation in an environment where such claims have skyrocketed, we begin by reviewing the technical requirements employers must follow when ordering background checks and making decisions based on the information they contain, and we then address practical steps to take.

The FCRA Applies—Even During a Pandemic

Don’t ignore federal and state background check laws while waiting for the dust to settle on this pandemic! Here is what employers need to know about these requirements.

Generally speaking, before an employer may obtain a background check (also called a “consumer report”) from a third-party background check provider (also called a “consumer reporting agency”), the employer must make a clear and conspicuous written disclosure to the individual that a background check may be done. In fact, the document must consist “solely” of the disclosure. California’s fair credit reporting statute also requires a separate, stand-alone disclosure, which cannot be combined even with the federal FCRA disclosure. The candidate or employee must also provide written consent for the employer to obtain a background check report. Different requirements exist for “investigative consumer reports” (those based on interviews of the individual’s friends, neighbors and associates), and for employers regulated by the Department of Transportation (depending on their hiring practices). Be sure to know what requirements affect you! FULL ARTICLE

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