Effective September 21, 2018, employers who use outside agencies (consumer reporting agencies) to conduct employee background checks must use a new (and revised) “A Summary of your Rights Under the Fair Credit Reporting Act” form. This updated form is one of the many notices employers must provide under the Fair Credit Reporting Act. The new form is available here in English and here in Spanish.
The new form adds information about an individual’s right to place a “security freeze” on his/her background information (limiting who gets such information). It also advises of the alternative right to place a “fraud alert” on his/her credit file, all at no cost to the individual.
This change is a result of federal legislation passed in May in response to highly publicized data breaches. Its goal is also to better protect individuals against identity theft.
The new legislation does not limit an employer’s ability to perform background checks or otherwise change how those checks are conducted. However, failure to provide individuals with the new form could expose employers to class action litigation and claims for damages and attorneys’ fees. Some might argue that requiring employers to use this new form (over the old form) is “form over substance”. Time and future litigation will tell. As many of you already know there has been an uptick in the filing of these types of claims nationwide.
For those employers who have not already done so, this might also be a good time to have all of your background check forms and procedures reviewed to ensure that you are complying with the Fair Credit Reporting Act.