California Background Check Law and FCRA, A Matter of Fact
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California Background Check Law and
FCRA Employer Requirements

By Glenn Hammer

The following is a summary of the combined California employer requirements under the following:
  • California Investigative Consumer Reporting Agencies Act (CA ICRA) Requirements for Investigative Consumer Reports
  • FCRA Requirements for Consumer Reports
  • FCRA Requirements for Investigative Consumer Reports
For detailed information about these laws, see Resources below.

California Background Checks require special attention. California law places greater restrictions on information than does federal law. For example, federal law (revised 2004) allows criminal convictions to be reported without time constraint. According to California state law, criminal convictions are not reportable if they predate the employment screening report by more than seven years. This is commonly referred to as the "California 7-Year Rule."

Before A Report is Requested From an Agency:

  • In a document that is separate from the job application, provide
    • A clear and conspicuous written disclosure to the applicant/employee that an investigative consumer report may be obtained for employment purposes and that the report may include information on his/her "character, general reputation, personal characteristics, and mode of living."
    • The name, address, and telephone number of the agency.
    • The nature and scope of the requested report.
    • A checkbox by which the applicant/employee may indicate that he/she wishes to receive a copy of any report that is prepared.
    • A summary of the applicant’s/employee’s rights (under CA ICRA) to view any files the agency maintains on him/her.
  • You must provide a summary of the applicant’s/employee’s rights (FCRA version).
  • You must obtain written authorization from the applicant/employee.

After A Report Is Received:

  • If the applicant/employee indicated by the checkbox (mentioned above) that he/she wishes to receive a copy of the report, the recipient of the report shall send a copy of the report to the applicant/employee within three business days of the date that the report is provided to the recipient. The recipient may contract with any other entity to send the copy. The report shall contain the name, address, and telephone number of the agency who issued the report.
  • The recipient shall use the report only for employment purposes and only for the employer’s own use.
  • If a report contains a notice of address discrepancy, the recipient should employ reasonable policies and procedures to know the identity of the person to whom the report pertains.

If Any Adverse Action Is To Be Taken:

Before taking any adverse action, based at least in part on information obtained from an agency,
  • You must provide the applicant/employee a copy of the report.
  • You must provide the applicant/employee a summary of the applicant’s/employee’s rights (FCRA version).
After any adverse action under circumstances in which a report regarding the applicant/employee was obtained from an investigative consumer reporting agency, the user of the investigative consumer report shall advise the applicant/employee against whom the adverse action has been taken and supply the applicant/employee a written notice of the adverse action, including
  • The name, address, and telephone number of the agency.
  • A statement that the agency did not make the adverse decision and is not able to explain why the decision was made.
  • A statement of the applicant’s/employee’s right to obtain from the agency, at no charge, the information in the applicant’s/employee’s file if the applicant/employee requests the report within 60 days.
  • A statement of the applicant’s/employee’s right to dispute directly with the agency the accuracy or completeness of any information provided by the agency.
  • If the only interaction between the applicant and the user has been by mail, telephone, computer or similar means, see FCRA sec 604 (b) (3) (B).

Employer Required To Certify Compliance:

Before requesting a report, the employer is required to certify to the agency that
  • The employer has followed and will follow all of the above disclosure, authorization, and copy distribution requirements.
  • The information obtained will not be used in violation of any federal or state equal opportunity law or regulation.
  • The information will only be used for employment purposes.

Restrictions On Reporting Adverse Information:

With few exceptions, agencies cannot provide employers with adverse information that is older than seven years. (Seven years is determined from the date of last activity.) Criminal cases that did not result in a conviction or were fully pardoned cannot be reported. (Criminal cases still in process can be reported.)

Exception When Investigating Possible Employee Wrongdoing or Misconduct:

The advance notice, written authorization, and copy requirements do not apply if the report is sought for employment purposes AND is due to suspicion held by an employer of wrongdoing or misconduct by the subject of the investigation. NOTE: After taking adverse action based at least in part on information obtained from an agency, the FCRA does require the employer to disclose to the consumer a summary containing the nature and substance of the communication upon which the adverse action was based.

Liability Protection:

Under the FCRA, an applicant/employee cannot bring any action or proceeding in the nature of defamation, invasion of privacy, or negligence with respect to the reporting of information against an agency, its customers, or any person who furnishes information to the agency if they are in compliance with the FCRA (except as to false information furnished with malice or willful intent to injure).

Substantial Penalties:

Under the CA ICRA, any user of information that fails to comply with any requirement of the CA ICRA is liable to the consumer who is the subject of the report for actual damages or $10,000 (whichever is greater) plus costs and attorney's fees. Also, if the court determines that the violation was grossly negligent or willful, the employer may be liable for punitive damages.

Resources:



About the Author: Glenn Hammer is a consultant and speaker on Employment Background Checks. He is founder and President of A Matter of Fact, a California-based employment background check firm. www.amof.info

Note: This information is for educational purposes only and should not be used as a substitute for professional legal advice.