Permissible purpose and background checks
Employers engaging a third-party vendor to conduct an employment background check may wonder if they can use reports for purposes other than reviewing a proposed hire's work eligibility.
Wonder no longer, because the information contained within these reports can only be utilized for employment screening. Checking a candidate's criminal background, income status or any civil judgments against them is considered "double dipping" under the Fair Credit Reporting Act (FCRA). Put simply, if you get a report for one reason, you cannot use it for a different reason.
Reporting agencies may provide background check documents only to organizations outlining a specific "permissible purpose" such as hiring, promotion, retention or reassignment, all of which fall under the umbrella of employment. OPENonline's resource page spells out the obligations businesses have when conducting employment background checks:
*Employers must certify permissible purpose to their background screening company upon requesting a report. Reporting agencies are required to provide employers with FCRA guidelines to inform them of their obligations under federal law.
*Written consent from a candidate should be secured before a background check gets underway.
*If a company denies an applicant work based on findings in a report, notification of the decision must be given to the potential hire so they can dispute any inaccurate information. This "adverse action notice" includes the reporting agency's contact info and a statement that the agency does not make hiring decisions. Applicants also have a right to receive a free copy of the document within 60 days of the decision.
*Properly dispose of reports by shredding paper documents or erasing information from an electronic database. More information on proper disposal of reports can be found here.
Section III of FCRA's Notice to Users of Consumer Reports points to the specific use of background check data for employment purposes. As long as permissible purpose protects the best interests of employers and job candidates, it will remain a critical facet of the hiring process moving forward.