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Fair Credit Reporting Act (FCRA)

From the Complete Payroll Labor Law Library.


Overview of Law

The Fair Credit Reporting Act (FCRA) has certain requirements for employers regarding consumer reports and investigative reports of their employees and job applicants.

Consumer Reports

Employment background checks are a type of consumer reports and may include credit history and criminal records.

Before an employer gets a consumer report, they must comply with the following requirements:

  • Tell the applicant or employee that the employer might use information in their consumer report for decisions related to their employment. This notice must be in writing and in a stand-alone document.
  • Get written permission from the applicant or employee. This can be part of the document that notifies the person that the employer will get a consumer report. If the employer wants the authorization to last throughout the person's employment, the document must say so clearly and conspicuously.
  • Certify compliance with FCRA requirements to the company running the check. The certification must include all the following:
    • That the employer notified the applicant or employee and got their permission to get a consumer report.
    • That the employer complied with all the FCRA requirements.
    • That the employer will not discriminate against the applicant or employee or otherwise misuse the information, as provided by any applicable federal or state equal opportunity laws or regulations.

Before taking an adverse action based on information in a consumer report, employers must do the following:

  • Tell the employee they are going to do so either orally or in writing.
  • Provide the name, address, and phone number of the consumer reporting company that supplied the report.
  • Provide a statement that the company that supplied the report did not make the decision to take the unfavorable action and cannot give specific reasons for it.
  • Inform the employee of their right to dispute any inaccurate or incomplete information and get an additional free report from the company if the employee asks for it within 60 days.

After an employer has used a consumer report, they must securely dispose of the report and any information gathered from it. Securely disposing of the information means that it cannot be read or reconstructed.

Investigative Reports

Investigative reports are reports based on personal interviews regarding a person’s character, general reputation, personal characteristics, or lifestyle. An employer who requests an investigative report must provide written notice to the employee that they have requested an investigative report within three days of doing so.

The employer must also give the employee a statement that they have the right to request additional disclosures and a summary of the scope and substance of the report. Within five days of an employee’s request, the employer must inform the employee in writing of the complete nature and scope of the investigation requested.

The employer must also certify to the consumer reporting agency that it has complied with these requirements regarding investigative reports.

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General Disclaimer

The materials and information available at this website and included in this blog are for informational purposes only, are not intended for the purpose of providing legal advice, and may not be relied upon as legal advice.  The employees of Complete Payroll are not licensed attorneys. This information and all of the information contained on this website are provided pursuant to and in compliance with federal and state statutes. It does not encompass other regulations that may exist, including, but not limited to, local ordinances. Complete Payroll makes no representations as to the accuracy, completeness, currentness, suitability, or validity of the information on this website and does not adopt any information contained on this website as its own. All information is provided on an as-is basis.  Please consult an attorney to obtain advice with respect to any particular question or issue. 

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