Employment Legislation Update

Employers that obtain credit reports or conduct background checks on applicants or current employees must be aware of recent changes to the Fair Credit Reporting Act (FCRA) and amendments made to FCRA by the Fair and Accurate Credit Transactions Act of 2003 (FACTA). FCRA imposes obligations on employers who procure "consumer reports" (defined to include information bearing on a consumer's credit worthiness, credit standing, credit capacity, character, general reputation, personal characteristics and mode of living) and/or "investigative consumer credit reports" (which include information obtained from personal interviews with neighbors, friends or associates) from a third-party consumer reporting agency for an employment purpose -- including hiring decisions and evaluations of employees for promotion, reassignment or retention. Employers that fail to comply with FCRA's obligations risk civil liability, federal agency action, and possible corresponding state action.

13 minute read April 27, 2005 at 11:45 AM

By

Albert J. Solecki, Jr. and Melissa G. Rosenberg