Running background checks the right way

FCRA basics

The Fair Credit Reporting Act governs how consumer reporting agencies like Valiant compile reports and how employers use them. The FTC and CFPB share enforcement, and candidates can bring private lawsuits for willful violations. Read the statute at the FTC.

Disclosure & authorization

The disclosure must be a clear, conspicuous document consisting solely of the disclosure. Avoid liability waivers or extra terms on the same page — courts have repeatedly found these problematic. Several states (California, New York, Minnesota, Oklahoma and others) require additional notices.

Pre-adverse action

Before acting on a report, send the candidate a copy of it and the CFPB's Summary of Your Rights. Give them time to respond. Some jurisdictions require a specific individualized-assessment form.

Final adverse action

If you proceed, send a final notice naming the screening company, stating that the company didn't make the decision, and explaining the candidate's right to a free copy and to dispute.

Candidate disputes

Candidates dispute directly with the consumer reporting agency. Valiant reinvestigates and generally resolves disputes within 30 days, as required.

EEOC considerations

The EEOC's 2012 enforcement guidance recommends weighing the nature of the offense, time elapsed and the job in question, rather than blanket exclusions.

Ban-the-box & fair chance

Many states and cities restrict when employers may ask about criminal history — often not until after a conditional offer — and add notice and assessment steps. See our state guides.

Drug testing

State drug-testing statutes vary widely, and a growing number limit pre-employment THC testing for non-safety roles. DOT testing follows 49 CFR Part 40.

Record retention

Keep consent forms and adverse action records consistent with EEOC record-keeping rules and your counsel's advice, and dispose of consumer report information securely under the FTC Disposal Rule.