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As employment law constantly changes, the attorneys at Bean, Kinney & Korman stay up to date on the law as it develops. Our blog topics focus on those changes and what you need to know about them, ranging from severance agreements and the FLSA to social media in the workplace and recent court decisions. If you are interested in having us cover a specific topic, please let us know.

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Posts tagged FCRA.
Employer Risks in Using Employment-Related Criminal Background Checks, Part 2

Part 1 of this article can be found here.

The Fair Credit Reporting Act

Having considering the perils summarized above, an employer who still decides to use employee criminal background checks faces additional restrictions under other federal statutory provisions, namely the Fair Credit Reporting Act (“FCRA”). An employer who uses consumer reports to make employment decisions, including hiring, retention, promotion or reassignment, must comply with the FCRA. The Federal Trade Commission (“FTC”) enforces the FCRA.

Credit Report

Employers choosing to utilize the consumer report or “credit report” as a method of evaluating potential employees face a myriad of legal pitfalls.   Both the Fair Credit Reporting Act and Title VII of the Civil Rights Act of 1964 provide guidelines employers should follow to avoid potential legal liability. 

The usage of consumer reports as a pre-employment tool is disfavored.  While the practice itself is legal, the Equal Employment Opportunity Commission (EEOC) is of the opinion that the practice of inquiring into the assets, liabilities or credit rating of a potential employee tends to impact more adversely on minorities and females.  The EEOC’s position is that the usage of consumer reports in the pre-employment context is permissible only if the employer can show that such information is essential to the particular job in question.  In other words, the test must be related to the job the employee will perform and must be consistent with a business necessity.