Last week’s issue of Law Week Colorado featured Spencer Fane Partner Ron Fano in an article on the ever-increasing issue of compliance with Fair Credit Reporting Act regulations during employer background checks.
In recent months alone, there have been dozens of lawsuits filed against major corporations including Home Depot, Whole Foods, Dollar General and Michaels for the mishandling of background and credit checks of potential and current employees. One of the most common offenses is the lack of clear notification to applicants that a background check will be conducted and that the results of which could dictate the decision of whether to hire them. The notification of a background check must be given separately from other application forms in a “clear and conspicuous” manner.
“At some level, you read these long statutes, and it looks like a technicality, but it’s not,” Fano said. “It’s an absolute requirement of the act.”
Fano explained that the issue can be worth millions of dollars to high-profile employers who violate FCRA regulations and strict adherence to the guidelines should be followed to prevent enormous issues down the road. Compliance is “one of those areas where an ounce of prevention is worth a pound of cure,” Fano said.
In addition to FCRA regulations, Colorado employers must also be mindful of the Employment Opportunities Act, which contains further stipulations affecting background checks including the restriction of employers using credit information that is unrelated to the job description. Fano also noted that there could be some new changes coming down the pipeline on criminal background checks because of their significant impact on particular demographics.
“Because the EEOC has put that near the top of its priority list and had issued some pretty far-reaching position statements … we watch that closely,” Fano said.
To learn more on employer background checks, read the full Law Week Colorado article here.