The FCRA Protects More Than Your Credit Report

Background Checks & Your Rights

If you’re looking for a job, an apartment, or a loan, there’s a good chance that someone will be looking at you — closely. They may search for your name online or order a background report. They’re looking for red-flag warnings that another candidate may be a safer bet.

While some consumers may be familiar with the protections against incorrect credit reports guaranteed to them by the FCRA (you can learn more about that here), there is a lesser known protection given to Americans by the law. In addition to covering credit checks, the FCRA also governs employment background checks for the purposes of “hiring, promotion, retention, or reassignment”.

Employment Background Checks Under Federal Law:

The FCRA applies only when an employment background check is prepared by an outside (third party) screening company. If an employer does not hire a third party to conduct the investigation, but instead compiles the report itself, the provisions of the FCRA do not apply. This is not the case in California, which has a separate, more comprehensive law we will discuss later. Under federal law, all employers in America must follow the below guidelines when preparing to use a third party background check:

• Give you notice on a separate document that a report maybe required
• Obtain your permission
• Get a separate, specific permission from you if medical information is requested
• Give a specific notice if your neighbors, friends, or associates will be interviewed about your “character, general reputation, personal characteristics, or mode of living”. This is called an “investigate consumer report” under the FCRA
• Notify you if information in the report is used to make an “adverse” decision about you

Employment Background Checks Under California Law:

Applicants and employees in California have all the rights of the FCRA and more, under a California law known as the Investigative Consumer Reporting Agencies Act (ICRAA). Under the California ICRAA, before a background check is conducted by a third party you should receive a notice that:

• States the purpose of the report
• Gives the name, address, and telephone number of the screening company
• Includes a summary of your rights to see and copy any report about you
• Includes a box to check if you want a copy of your report. If you indicate you want a copy of your report, it should be sent within three business days of the date the employer receives it.

California law does not require an employer who conducts a background check in-house to give you the same detailed notice that is required when an outside agency is retained. But you do have the right to receive a copy of the public records compiled in the report. We advise that you always indicate to the employer that you want to see the public records report.

You must give your authorization in writing before an employer can start the investigation process through a screening agency. California law requires your specific authorization if information about your medical history or condition will be obtained.

Can A Background Check In California Include My Credit Report?

A California employer cannot review your credit report unless the job falls into one of numerous exceptions. Jobs that allow a credit check include:

• A position in the state Department of Justice
• A managerial position
• A position as a sworn peace officer or other law enforcement job
• A position for which the information is required by law
• A position that involves access to specified personal information
• A position in which the person is a named signatory on the employer’s bank or credit card account
• A position that involves access to confidential or proprietary information
• A position that involves regular access to $10,000 or more of cash

Can I Sue If An Employer Or Background Check Company Uses Incorrect Information?

Violations of the ICRAA can result in stiff penalties for both the company that issued the report and for the employer. Under the ICRAA you can sue for actual damages or $10,000, whichever is greater. Class action lawsuits are allowed if a company has a pattern of violations that effects multiple applicants. Court costs and attorney fees can also be awarded. The court can award punitive damages if it finds the violation was grossly negligent or willful.

If your background check contained incorrect information, or if you believe your rights under either the FCRA or the ICRAA have been violated, contact us for a free consultation today. Kazerouni Law Group has years of experience litigating both FCRA and ICRAA cases, and will represent you at no up-front cost: you won’t pay a dime until we win or settle your case.

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