The Fair Credit Report (“FCRA”) is a federal law governing consumer report information collection and use. When an employer uses consumer reports for employment purposes, they are required to comply with the FCRA. More employers than ever are using consumer credit reports to gather information about potential employees.
If the employee has a low credit score, the employer may not hire the employee. Consumer credit reports can also affect current employees. Those with lower scores or other concerning information on their credit report may face adverse employment consequences after their employer reviews their credit report.
Employers Must Comply With FCRA
When an employer looks at the consumer credit report for a potential employee or employee to make hiring decisions or any other employment-based decision, they must abide by the FCRA. Decisions about hiring a potential employee, whether to promote an employee, reassign an employee, or fire an employee, are all governed by the FCRA.
Consumer reports include more than just an individual’s credit history. Consumer reporting agencies can provide employers and potential employers with reports that include all of the following information about applicants and employees:
- Driving records
- Employment records
- Criminal history
- Education information
- Drivers licenses
Know Your Rights as an Employee
Under the FCRA, employers must tell employees or job applicants that they will consider taking adverse action against them based on what they find in the consumer report. For example, the employee needs to be informed that based on the report, they may not be considered for employment or promotion.
At this stage, the job applicant or employee must receive a copy of the report and a written summary of their rights under the FCRA. Additionally, the employee must have a reasonable amount of time to correct information found in the consumer report that may need to be corrected.
The employee can contact the reporting agency about any wrongdoing or incorrect information in their report. The ICRAA also regulates the information agencies can include in a background report. Generally, investigative consumer report inquiries about public records must be limited to the last seven years or 10 years for bankruptcy filings. There is an exception to this rule for employers required by government agencies to review records for longer.
Criminal convictions can only be reported for seven years instead of indefinitely under the Fair Credit Reporting Act. Convictions cannot be reported if a full pardon has been granted. When California employers conduct their background checks and do not contract with third parties to do so, some of the state legal provisions apply, but not all of them. Employers should pay careful attention to all state and federal law requirements. Employees can hold them accountable when they violate these laws by pursuing a legal claim.
Discuss Your Case With a Riverside Employment Attorney
Have you been denied a job because of information in a consumer credit report that your employer discovered? Do you suspect that your employer has taken adverse actions against you because of the information in your consumer credit report? If so, it is crucial that you reach out to an employment attorney as soon as possible.
When employers do not follow the Fair Credit Reporting Act requirements, negatively affected employees can hold them liable through a civil legal claim. Do not hesitate to contact the experienced Riverside employment attorneys to learn more about how we can fight for you.