HR Must-Know: FCRA and Adverse Action Compliance

HR Must Know FCRA and Adverse Action Compliance

In this insightful session of "Day with DISA 2024", Morgan Reynolds, Vice President of Risk and Legal Counsel at DISA Global Solutions, delved into the intricacies of the FCRA (Fair Credit Reporting Act) and adverse action laws. Morgan, with his extensive experience at DISA and legal expertise, provided a comprehensive overview of how these laws affect HR practices, particularly in the context of employee screening and background checks.

If you missed the live presentation or wish to revisit its valuable insights, you can access a recording. Just download or watch it using the link below and gain a deeper understanding of these critical legal aspects.

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Morgan's presentation was divided into several key areas, emphasizing the three main compliance components for end-users under the FCRA: Disclosure and Authorization, Permissible Purpose, and Adverse Action Procedures. He highlighted the importance of obtaining written authorization before conducting background checks and the nuances of permissible purposes for such reports.

A significant portion of the webinar was dedicated to explaining adverse action procedures in detail. Morgan stressed the importance of providing pre-adverse action notices and allowing candidates sufficient time to respond. He also touched upon state-specific laws and how they might impact these procedures, with a focus on recent changes in California's legislation and New York's Article 23-A.

6 Key Takeaways:

  • Disclosure and Authorization Criticality: Before conducting a background check, employers must disclose their intention and obtain written authorization. This step is essential for compliance and avoiding legal pitfalls.
  • Understanding Adverse Actions: Adverse actions include not just hiring decisions but also promotions, demotions, and terminations. Any decision partially based on background reports falls under this category, necessitating specific procedural steps.
  • Importance of Individualized Assessment: Especially in states like California, employers must conduct an individualized assessment of each case, considering factors like the nature of the offense and its relevance to the job role.
  • Increased Wait Times in Certain States: States like California have specific laws that extend the waiting period after sending a pre-adverse action notice, emphasizing the need for employers to be aware of and comply with state-specific regulations.
  • Evolving Legal Landscape: The legal framework governing employee screening and adverse actions is continually evolving, with states like California often leading the way in introducing new requirements.
  • Comprehensive Approach to Adverse Actions: Employers must ensure a comprehensive approach to adverse actions, including providing a copy of the report, outlining consumer rights, and allowing an opportunity to dispute inaccuracies.

About Day with DISA

This year's Day with DISA, attended by over 4,000 HR and safety professionals, was a resounding success. The event returned this year with both virtual presentations and an in-person "Keynotes and Networking" event, offering deep dives into topics like drug and alcohol testing, background checks, and occupational health. Although the event has concluded, plans are already underway for next year's conference, promising even more enriching experiences and insights.

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About DISA 

Founded in 1986, DISA is a leader in employee screening and compliance services. With a global presence through its offices in North America and Europe, DISA offers an array of services, including background checks, drug and alcohol testing, occupational health, and transportation compliance. DISA's mission is to help employers make informed staffing decisions and foster a safe workplace environment.

DISA Global Solutions aims to provide accurate and informative content for educational purposes only and does not constitute legal advice. The reader retains full responsibility for the use of the information contained herein. Always consult with a professional or legal expert.