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A proposed bill could make it easier for employers to comply with the background check disclosure requirement from the Fair Credit Reporting Act.

About The Act

The Clarity in Consumer Disclosures Act was introduced by members of the House of Representatives in December 2021. It is intended to create a standard form that employers can use when requesting background checks for applicants and employees. This would be a “plain-language” document that complies with requirements of the Fair Credit Reporting Act (FCRA).

Per the FCRA, employers must provide a disclosure to consumers before running a background check. This document must consist of nothing more than the language required to disclose an intent to run a report. However, the federal law does not mandate any specific language, so the topic of what is and is not allowable has been going on for years.

FCRA Lawsuits

Numerous employers have been hit with lawsuits for alleged FCRA violations. One of the most common claims is that a disclosure an organization provided did not meet federal requirements. These cases typically allege that the forms included liability waivers, confusing language or content that is not permitted.

Through the years, best practices for consumer disclosures have changed. It can be difficult for businesses to confirm the forms they use are compliant. This is where the proposed Act comes in. If approved, it should create a standard template that can be used throughout the country.

Support

Representatives Madeleine Dean and Trey Hollingsworth introduced the Act. Their goal was to simplify the hiring process. Representative Dean said: “Clear and comprehensible guidance will help employers and employees. This is a commonsense change to ensure that our businesses meet FCRA and State requirements and avoid unnecessary confusion.”

This Act is also supported by the Professional Background Screening Association (PBSA). A spokesperson was quoted as saying: “The Clarity in Consumer Disclosures Act will have significant benefits for consumers, job seekers, and employers alike. The Professional Background Screening Association applauds Representatives Dean and Hollingsworth for introducing this important, bipartisan legislation.”

A Potential Complication

Something legislators might need to consider is that there are a few variants for the forms employers use to disclose the intent to run a background check. A good example is found in New York City (NYC). Lawmakers there updated the Fair Chance Act, and organizations must now provide a specific disclosure to individuals who would live or work in NYC. How a scenario like this might be handled remains to be seen.

What Employers Should Know

Employers throughout the nation should be aware that they must obtain signed disclosure and authorization documents before requesting background checks. They must be clear, concise and devoid of any other content. We recommend consulting with legal counsel to ensure everything you use is compliant with federal, state and local laws.

Running Background Checks

Screening job seekers is an essential part of every employment process. Comprehensive reports help employers determine if an applicant is eligible and meets all the requirements of their intended position. They also show hiring managers if a person has a violent or other serious criminal offenses that might indicate they pose an undue risk to the business, existing staff or customers.

When you need background checks for applicants, employees, contractors or volunteers, please contact us. Our team can help you customize screening packages for any position. We also offer a proprietary service that asks your candidates to submit their information directly to us. This saves you time and helps ensure each person sees and agrees to all federal and other documents. We are available to assist you Monday through Friday from 5am to 6pm PT.