Due to the increasing concern over identity theft, the California legislature has amended section 1786 of their state's civil code, commonly known as the "California Investigative Consumer Reporting Agencies Act." With the stated goal of curbing identity theft, the California legislature hopes that by requiring employers to provide copies of investigative consumer reports to applicants and employees, these persons will be able to discover if another person has assumed their identity. There may be significant penalties for non-compliance with this new amendment.

California Residents Must Receive a Notice that an Investigative Consumer Report will be Obtained:

According to provisions in 1786.16, when an investigative consumer report is sought for employment purposes, the person requesting the report must, within three days of the date the report was requested, notify the applicant or employee in writing that an investigative consumer report will be made. The law requires that the notification include several pieces of information. We have the notification that satisfies all requirements of the provision available on our website.

Unfortunately the law prevents us from providing the notification to the applicant for you; however, we can help. The first option is to use the generic notification form (available in the Forms section in Word and PDF format) and check off the reports that were ordered, fill in your company name and address, and send to the applicant. A much more convenient option is to allow ESS to email the notification letters to you at the end of each day. They will already be addressed to the applicant and include your name and address. The only thing left would be to print them and place them in a standard window envelope to be mailed.

California Employers Must Now Give Applicants and Employees a Copy of the Investigative Consumer Report:

Employers who use an investigative consumer report for employment purposes are required to give the subject of the report a copy of the report at the time of a meeting or interview or within seven days of receiving the report, whichever is earlier. This is true even if the applicant is hired or if the applicant or employee was rejected for other reasons. the only exception is if the investigative consumer report is obtained on a current employee as part of an investigation of suspected misconduct or wrongdoing.

Again, the law specifically states that we cannot supply the copy of the repot to the applicant for you, but again, we want to help. To keep the process simple, you will begin receiving an applicant explanation form each time you receive a report from us on a California resident. The form will explain everything to the applicant as required by law, and it will instruct them on what to do if they suspect they are a victim of identity fraud. They will have no reason to come back to you with additional questions or for more information.

Since the law became effective January 1, 2002, we suggest all California applicants screened since that time receive a copy of their report. Please contact ESS if you would like us to send you a package with copies of reports on all California applicants you have screened since the beginning of the year. They will be delivered with the applicant explanation form, ready to be folded and placed in a window envelope and mailed.

 No Loop-hole for California Employers Compiling In-house Investigative Reports:

Another significant part of the amendment is that it extends the scope of the law to cover investigations conducted by an employer's own employees. The law states that any person, including an employer, who for employment purposes compiles information in lieu of using the services of an investigative consumer-reporting agency must make the same disclosures.

Independent Contractors and Consultants:

Based on our counsel's understanding of this law, it is felt that the California law does not apply to independent contractors and consultants, franchisees, or others who are not employees as defined by state and federal law.

What is an Investigative Consumer Report?

The definition under California's civil code is "a consumer report in which information on a consumer's character, general reputation, personal characteristics, or mode of living is obtained through any means. The term does not include a consumer report or other compilation of information that is limited to specific factual information relating to a consumer's credit record or manner of obtaining credit obtained directly from a creditor of the consumer or from a consumer reporting agency when that information was obtained directly from a potential or existing creditor of the consumer or from the consumer."

In short, the California definition of an investigative consumer report covers all consumer reports except credit reports, which are covered under a different section of the civil code. Section 1786 of the California civil code is available in its entirety by clicking here.

**IMPORTANT NOTE**

Continued requests for and acceptance of ESS Reports on individuals residing in California certifies your agreement to comply with the California Civil Code as amended. 

Employment Screening Services, Inc. does not intend to provide legal advice on this or any other matter. As always, we recommend consulting your legal department about the specific obligations of your business.