The Importance of Background Check Disclosures

Background check disclosures are in the best interests of both employers and potential new employees. They provide documentation that ensures job candidates consent to having their background checked and verified by the employer before hiring.

Employers must understand what’s legally required when providing background check disclosures to maintain compliance with the Fair Credit Reporting Act (FCRA) and obtain valid authorization to run a background check.

This article will explore the importance of background check disclosures, what they should include (and what they shouldn’t), and answer frequently asked questions about this essential recruitment procedure.

What Is a Background Check Disclosure?

A background check disclosure is a form that provides the job candidate with detailed information about their rights as they relate to a background check. It also outlines what type of background checks the employer plans to conduct. 

A background check authorization must also include an authorization form for the candidate to sign, giving legal consent for the check to take place.

What You Need to Know About Background Check Disclosures as an Employer

Just as potential hires and employees should know their rights when employers disclose a background check, employers must understand their obligations to stay in line with FCRA regulations to avoid disputes and potential litigation.

You Must Provide a Disclosure Form to All Candidates

Before you can proceed with a background check, all candidates must receive a disclosure form. The form should be included in their application materials or emailed before they arrive for an interview.

No matter how you deliver the disclosure, the FCRA requires that it’s in writing. It also needs to be a stand-alone document. Don’t combine it with other application documents. The disclosure must clearly state that you, the employer, may obtain a consumer report on your potential hires.

Here’s what the FCRA specifically dictates:

• It must be a “clear and conspicuous” written notice.
• It must contain “solely the disclosure.”

FCRA regulation protects job applicants under the law from employers collecting and reporting improper information during a background check. 

All businesses are held to FCRA standards. But the stakes are much higher for enterprises that hire a high volume of workers. Even minor background check violations can equate to millions of dollars lost through litigation.

You Must Receive Authorization From Each Candidate

The candidate must sign and return the form to authorize you to conduct a background check. You should inform the candidate that they can refuse to provide this authorization and that there will be no repercussions if they choose not to sign. If a candidate does not authorize their consumer report, know you’re prohibited from performing the check.

As with the disclosure document, the authorization must also be in writing.

The Disclosure Form Must Not Contain Extraneous Information

The disclosure form you provide to candidates should only contain the information required by FCRA regulations. It should include an introduction to a background check, the legal requirements, and a signature block for the candidate or employee to authorize the screening.

Don’t provide additional details. Keep it simple and only include what is necessary.

It’s also crucial to note that you should never ask candidates for personal information beyond what is relevant to the position. 

What To Include in Background Check Disclosure Forms

Unsure what to include and what to leave out of your background check disclosure forms? Before providing disclosure forms to potential hires, know that a small mistake could warrant legal action. 

Here’s a helpful guide.

When creating a disclosure form, employers should include the following information:

• The definition of a consumer report and a description of the type of information contained in the report
• A copy of the revised summary of consumer rights, updated by the Consumer Financial Protection Bureau
• Any state-specific disclosures (California and New York both have these)

One important note. You can’t combine federal background check disclosures and state background check disclosures. State and federal background disclosures must be separate stand-alone documents.

What Not To Include in Background Check Disclosure Forms

To ensure you comply with FCRA regulations, knowing what not to include in a disclosure form is essential. 

If you accidentally include any of the following in your disclosure forms, courts may rule that you violated FCRA. To steer clear of disputes and litigation, employers should avoid including:

• Any extraneous, coercive, or misleading language unrelated to the purpose of the background check
• Liability waivers that release you or the background check provider from future litigation
• Questions about a candidate’s criminal history
• Any wording or additional documents about performing an “investigative consumer report,” which is different from a background check
• Outdated contact information for the screening company

Frequently Asked Questions

What Disclosures Are Required by FCRA?

For background checks, employers must provide stand-alone disclosures that define a consumer report, describe the information collected by the screening, and a copy of the revised summary of consumer rights and any state-specific disclosures. 

Don’t combine these disclosures; each must be separate.

Wrapping Up

Background check disclosures are an essential part of the screening process. Employers must provide candidates with a clear, concise disclosure form and receive authorization before proceeding with any background check. 

It’s also crucial to include only what is necessary on the form and remove any extraneous information or wording that could be perceived as coercive or misleading. Otherwise, your background check disclosure form may violate the Fair Credit Reporting Act and precipitate legal action.

By following these guidelines, employers can ensure they comply with FCRA regulations and provide a safe and transparent screening procedure that won’t discourage potential hires.

If you’re looking for a background check partner to help you complete your consumer reports in accordance with the FCRA, contact ScoutLogic. 

We’re here to help.

David Garcia

David Garcia, co-founder and CEO of Scout Logic, is an industry leader in the bulk background check world. With his strategic acumen and expertise in the HR sphere, specifically in hiring, recruiting, legal compliance, background checks, and resume screening, he’s an invaluable asset and consultant.

David's counsel extends across the boards of ScoutLogic, YipitData, and Supplier.io, drawing from his impactful stints on the boards of Infutor and Avetta. With an extensive 25-year journey, he champions unparalleled B2B commercial leadership within data & analytics, significantly shaping the HR landscape.