If you’re keeping up with the news, you’ve seen that not all companies – even prevalent name-brand companies – are entirely successful at managing their background check compliance responsibilities. While potential pitfalls are many, one of the most common compliance errors we see has to do with improper authorization and disclosure.
To give you the condensed version, the Fair Credit Report Act (“FCRA”) requires that a candidate be provided with a document that consists “solely of the disclosure” of the background check. Courts have generally held that this means that the disclosure must be a stand-alone document that is not part of the job application or any other document.
Learn More about the FCRA
This might seem simple, but when companies are trying to streamline the application process, some seem to fall to the temptation of placing other information on the authorization and disclosure forms that might be misleading or extraneous. Whether companies are doing this out of an attempt to simplify the process or just out of ignorance of the law, this mistake can be costly, in terms of penalties and fines, litigation, and damage to a company’s reputation.
The repercussions of non-compliance aren’t limited to companies within the US, either. With the passage of the General Data Protection Regulation (GDPR), protection of data has become a global concern. Individuals within the European Union and European Economic Area now have more control over their personal data, and the costs of violating the GDPR are staggeringly high. How high? Companies may be fined up to 20 million Euros (more than 23 million US dollars) OR 4% of the company’s worldwide annual revenue of the prior financial year, whichever is higher.
Compliance laws can be confusing, but missteps are costly. Luckily, companies like HireRight understand the challenges that businesses face, and have resources that employers can draw from to learn more about the FCRA, including the details surrounding the authorization and disclosure form. These resources are a good starting point to help arm you with talking points when engaging your legal counsel to understand your organization’s compliance obligations when building your background screening program.
For instance, HireRight is hosting a “Year in Review” webinar on the compliance issues that took effect in 2018 on Thursday, February 7 at 11 am PST.