BACKGROUND CHECK FOR EMPLOYMENT

Overview of Precise Notices California Employers Must Obtain

Many employers find it prudent for various reasons to conduct appropriate background checks in the employee prescreening process.

Such background checks can and should be done through professional reporting agencies established to promptly check available databases.  However, employers must be familiar with the frequently interlocking federal and California rules for disclosure and consent before embarking on the process.   Please review our newsletter article on Pre-Employment Background Checks for an overview of the applicable federal and state laws in this area.

Per California law, background checks involve two types of consumer reports obtained from reporting agencies that provide such information: (1) consumer credit reports and (2) investigative consumer reports.  Consumer credit reports are credit checks (credit worthiness, credit standing, or credit capacity) used for establishing a consumer’s eligibility for employment.   Investigative consumer reports are consumer reports in which information on a consumer’s character, general reputation, personal characteristics, or mode of living is obtained through any means, including criminal background checks.

California employers interested in obtaining consumer investigative on job applicants or employees must abide by the following precise sequence of required notices and procedures so as not to run afoul of state or federal law.

Step One:  Pre-Request Written Notice and Applicant Consent. The California employer must provide written notice and obtain written consent from the job applicant before seeking the report.  The pre-request notice and consent form must include a box the applicant may check if he/she wishes to receive a copy of the report.

Step Two:  Written Notice to Applicant of Request of Investigative Consumer Report: Prior to obtaining an investigative consumer report, the employer must clearly and conspicuously disclose in writing to the applicant (a) that an investigative consumer report will be sought regarding his or her character, general reputation, personal characteristics and mode of living; (b) the permissible purpose of the report; (c) the name, address and telephone number of the investigative consumer reporting agency conducting the investigation; and (d) the nature and scope of the investigation requested.  The employer must also provide a written summary of the consumer’s rights as prescribed by the Federal Trade Commission (FTC) and a summary of California’s parallel Investigative Consumer Reporting Agencies Act, including the applicant’s rights to inspect the agency’s file.

Step Three:  Obligation to Provide a Copy of the Investigative Consumer Report: If the applicant wishes to receive a copy of the investigative consumer report, the employer (or professional agency conducting the background check on the employer’s behalf) must comply within three business days of obtaining the report.

Step Four:  Employer’s Certification of Compliance to Consumer Reporting Agency: As a condition of obtaining any consumer report, an employer must certify to the reporting agency that it is seeking the report for permissible purposes and that it has complied or will comply with all requirements for notice and disclosure to the applicant.

Step Five:  Notice to Applicant of Intended Adverse Action: Before an employer can deny an application based in whole or in part on any consumer report, the employer must provide the subject applicant with a copy of that report, regardless of whether or not the applicant checked the box per step one above, and a written disclosure of the applicant’s rights as prescribed by Federal and California law.

Step Six: Notice to Applicant of Adverse Action: If an employer denies employment wholly or partially on the basis of information in any consumer report – whether or not that report is “investigative” – the company must further provide “oral, written, or electronic notice” of the adverse decision as well as (a)  the name, address, and telephone number of the consumer reporting agency; (b) a statement that the reporting agency did not take the adverse action and is unable to provide the applicant the specific reasons for the adverse action; and (c) notice of the applicant’s right to obtain a free copy of the pertinent report within 60 days and to dispute with the agency the accuracy or completeness of any portion of that report.

The above rules do not apply to an investigative consumer report procured or caused to be prepared by an employer if the report is sought for employment purposes due to the employer’s suspicion of wrongdoing or misconduct by the person that is the subject of the investigation.

Not all professional background check companies follow California law when conducting investigative background checks.  Employers should consult legal counsel experienced in employment law for practical guidance and full protection of an employer’s rights to seek pertinent background information on key applicants.   Such information may well prove invaluable in the hiring decision.

If you have any questions on these or any other employment laws, please contact me or any of our other employment law attorneys.  Best, Cindy Bamforth