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Please
note the following Important Information:
1. There is a new
authorization form for applicants to sign. It contains a few changes and is
now referred to as a “Disclosure and Authorization.”
2. The FCRA “Summary Of
Your Rights” document should now be given to ALL applicants at the
time they are presented with the Disclosure and Authorization.
3. The “California Notification Letter”
should be given to CALIFORNIA APPLICANTS prior to ordering a
background check on them.
OVERVIEW:
At the federal level, the
Federal Trade Commission (FTC) is responsible for enforcing the Fair Credit
Reporting Act (FCRA.) The FTC regularly answers questions about the FCRA
through staff opinion letters, which then set the guidelines for
compliance. State laws and compliance procedures regarding
consumer-reporting laws also change occasionally. In a continued effort to
stay current with and strictly adhere to state and federal
consumer-reporting laws, two separate legal counsels who specialize in
employment law recently reviewed Employment Screening Services’
authorization and disclosure forms. As a result, we have made some minor
changes to our Authorization document and to the special disclosure
requirement for California applicants. Please be sure to update your forms
immediately so that you are in complete compliance with all federal and
state laws.
DISCLOSURE AND AUTHORIZATION FORM:
1. The title of the ESS consent document
has changed from “Release and Authorization” to “Disclosure and
Authorization.”
We were counseled that to be
fully consistent with the FTC’s prohibition against including “excess
verbiage” in the authorization form that the release from liability section
of the document should be removed. While the required disclosure
information and the written authorization to obtain a consumer report may be
on the same one-page document, verbiage unrelated to either the disclosure
or the authorization should not be included on the document. The sentence
removed is “I voluntarily and knowingly unconditionally release any named
or unnamed informant from any and all liability resulting from the
furnishing of this information”.
2. The Disclosure and Authorization
document should identify the employer requesting the authorization.
Many of
our clients have already taken the ESS form and customized it according
their own counsel’s instructions, including inserting their company name
into the authorization. We were advised that an employer could be held
liable for willful or negligent failure to comply with the requirements of
the FCRA; accordingly, it is suggested for the employer’s protection that
the Disclosure and Authorization form identify the specific employer
obtaining the applicant’s/employee’s authorization. *See the link at end
of the article to obtain the revised Disclosure and Authorization Form.
3. The applicant’s/employee’s consent in the revised ESS Disclosure
and Authorization form is prospective; in other words, it applies to future
consumer reports, not just the one being sought at the time the document is
signed.
While the old document did not restrict the use of the consent to the
current employment purpose, the new form clearly indicates it may be used
for future reports. Under the FCRA an employer may seek an
applicant/employee’s consent to procure the current and future consumer
reports, but it is less clear whether consent can have this prospective
effect under California law. For California residents,
we recommend they be given the California disclosure document each time a
report is procured. The added language reads, “I understand that if
hired, my consent will apply throughout my employment unless I revoke or
cancel it by sending a signed letter to the company Human Resources
office”.
4. The revised Disclosure and
Authorization form asks for a date of birth, but indicates that year of
birth is optional.
While all authorities agree that any information tending to reveal age
should not be requested on an application form or during an interview, there
is no absolute prohibition against asking for a date of birth under the
Federal Age Discrimination Act. The EEOC ruled (29
CFR Part 1625) that asking for date of
birth or age is not automatically a violation of the Act. However, it added
that any such request would be “closely scrutinized” to insure the request
has a permissible purpose. Because such inquiries may deter older workers
from applying for employment and because they may communicate a possible
intent to discriminate, many employers would rather not ask for the date of
birth on any form. Also, some state laws have rules that prohibit an
employer from directly or indirectly seeking or receiving information that
reveals date of birth or age. For this reason, the revised ESS Disclosure and Authorization form indicates that “The DOB is used for identification purposes only and plays no
part in the selection process. All federal and states rights are respected.
Providing a Year of birth is optional.” Because a full date of birth
is required for some criminal history searches and MVR, it is possible ESS may not be able to complete these reports until a full date of birth
can be obtained. *If you would like this portion of the
ESS form customized to meet your counsel’s
advice, please contact us.
5.
The FTC advises that the
“Summary of Rights under the FCRA” should be provided to the consumer at the
time of the Disclosure and Authorization
(if an investigative consumer report is being procured.)
When the report being procured
is an Investigative Consumer Report (contains information on the person’s
character, general reputation, personal characteristic or mode of living
obtained through personal interviews), the consumer is to be informed of the
right to receive additional disclosures including the written summary of
consumer rights under the FCRA. In part of a staff opinion letter (Hauxwell),
the FTC admits the language of the FCRA is ambiguous as to when the consumer
should receive the summary of rights. However, in its "Notice to
Users of Consumer Reports: Obligations of Users Under the FCRA,” the
commission states the Summary of Consumer rights should be given at the same
time as the initial disclosure. (16 C.F.R. § 601, Appendix C.) This
obligation is in addition to the adverse action obligation, §604(b)(3), that
states “Before taking any adverse action based in whole or in part
on the report, the person intending to take such adverse action shall
provide to the consumer to whom the report relates-- (i) a copy of the
report; and (ii) a description in writing of the rights of the consumer
under this title, as prescribed by the Federal Trade Commission under
section 609(c)(3”). *See the link at the end of the article to obtain
the most up-to-date version of the “Summary of Rights under the FCRA.”
CHANGE
IN TIMING OF THE CALIFORNIA DISCLOSURE LETTER:
The California legislature has amended its Investigative Consumer
Reporting Act (ICRA) several times in recent years. A major part of the
revision to the state law is that employers who wish to run a consumer
report on California residents/employees must provide them an additional
disclosure, which among other language, informs the consumer of the
specific nature and scope of the investigative consumer report1.
An early amendment to the California law gave the employer three days from
the date the report was ordered to give the California resident this state
required disclosure. ESS helps our clients meet this obligation by sending
the proper disclosure letter to the client the day after we receive an ESS
report order on a person living in California. However, a subsequent
revision to this section of the law (1786.16) requires the employer to
make the disclosure “any time before the report is procured”.
This means our current procedure is no longer in compliance.
ESS again
wants to support our clients in meeting this obligation in the best way
possible when screening California residents. One requirement of the form is
to specifically disclose the nature and scope of the investigation, meaning
you must indicate what will be included in the report. If you know what
will be included in the background check, you may fill out the disclosure
and give it to the applicants/employees at the same to you give them the
Authorization and Disclosure document and the Federal “Summary of Rights
under the FCRA.” As
of April 4th, ESS will stop emailing clients the California disclosure
letter.
Use the
link below to obtain the California disclosure and summary of consumer
rights according the California civil code 1786.22. Please contact ESS if
you would like us to customize the generic California disclosure form.
1.
The California definition of an investigative consumer report differs from
the federal definition. In California, an investigative consumer report is
defined as "a consumer report in which information on a consumer's
character, general reputation, personal characteristics, or mode of living
is obtained through any means." Within the federal definition it states,
"...through personal interviews" (rather than "through any means") Therefore
in California, virtually any report ordered by an employer through a third
party for employment purposes is an investigative consumer report.
NOTICE:
Employment Screening Services, Inc. provides this information as part of its
service to its clients. However, this information is meant for information
purposes only. As always, please consult with your legal department
regarding any changes affecting your business.
Individual Forms:
CLICK HERE for the new
Disclosure and Authorization form WITH CREDIT
CLICK HERE for the new Disclosure and Authorization form WITH OUT CREDIT
CLICK HERE for the new Federal
Summary of Your Rights under the FCRA
CLICK HERE for the California
Disclosure and Summary of Consumer Rights
Complete Packages:
CLICK HERE for all forms WITH CREDIT
CLICK HERE for all forms WITH OUT CREDIT
*These forms are also
available on the ESS Client Services website at
www.essclientservices.com
(The User Name is "ESS" all
upper case and the Password is "employment" all in lower case.)
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