FCRA Notices Apply for Employee Background Checks

As of Sept. 21, 2018, employers that conduct background checks to screen job applicants or employees must use updated notices to comply with the Fair Credit Reporting Act (FCRA). On Sept. 12, 2018, the U.S. Bureau of Consumer Financial Protection (Bureau) issued an interim final rule that includes new models for these required notices. The new models reflect changes to the FCRA that were enacted in May 2018. Specifically, the Economic Growth, Regulatory Relief, and Consumer Protection Act amended the FCRA to:

• Provide consumers the right to place “national security freezes” on their credit reports without charge; and

• Require that consumers be notified of this new right as part of a background check process.

What to do

Employers that use consumer reporting agencies to conduct credit or other background checks to screen applicants or employees must ensure that they (and their consumer reporting agencies) use the updated models or substantially similar notices.