A primary legal consideration for employers is the FCRA. The FCRA regulates more than just credit reports. It establishes specific requirements for compilation and handling of an employment background report, whether designated as a Consumer Report or Investigative Consumer Report. The FCRA applies to employers that use the services of a third party in preparation of an employment screening report. If a third party prepares or provides any portion of an employment screening report, such as criminal records, employment references, or education verifications, then the FCRA will apply. The FCRA was most recently amended by the Fair and Accurate Credit Transaction Act (FACTA or FACT Act) of 2006. Strict adherence to the FCRA is required when utilizing Consumer Reports.
Both federal and state laws regulate many industries, mandating that specific pre employment background screening searches be conducted for applicants applying for positions within certain industries. If an employer is engaged in one of these industries, it must be aware of both the federal and state requirements.
Privacy issues have always been a fundamental concern for those dealing with sensitive information. Those issues are increasing in both public visibility and impact on employment screening practices. One issue employers must consider is that of confidentiality. Whether using a CRA or not, the pre employment screening process inherently allows the employer (and its employees) access to personal information of a confidential nature. As such, the employer's process must contemplate the proper management of that information and under what circumstances its employees (i.e., applicant screeners and interviewers) may access and use that information. Employers need to establish policies for record storage and security. Data security and access control are key responsibilities of employers that perform background screens when such screens involve the use of personal information of a confidential nature.
Much of the regulation relating to background screening encompasses fair treatment issues. These laws prohibit discrimination on the basis of religion, national origin, age, marital status, gender, medical condition or disability, or financial condition.