California Background Check Law and
FCRA Employer Requirements
- California Investigative Consumer Reporting Agencies Act (CA ICRA) Requirements for Investigative Consumer Reports
- FCRA Requirements for Consumer Reports
- FCRA Requirements for Investigative Consumer Reports
California Background Checks require special attention. California law places greater restrictions on the reporting and use of information than does federal law. For example, criminal records are usually 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." Other examples include restrictions on an employer's inquiries into or use of information about matters which did not result in a conviction (except pending matters), participation in diversion programs, certain marijuana convictions, and use of the sex offender registry (except to protect vulnerable individuals). See Background Check Laws: California.
Before A Report is Requested From an Agency
- In a document that is separate from any other document (except the written authorization), provide the applicant/employee:
- A clear and conspicuous written disclosure 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, telephone number, and web site address of the agency.
NOTE: The agency's web site must include a statement regarding the agency's privacy practices. That statement must indicate whether the consumer’s personal information will be transferred to third-parties outside of the USA or its territories.
- The nature and scope of the requested report. If an employer requests a credit report, the notice needs to inform the person that a credit report will be used and identify the specific basis under subdivision (a) of Section 1024.5 of the Labor Code for use of the 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.
- The employer must provide a summary of the applicant’s/employee’s rights (FCRA version) to the applicant.
- The employer must obtain written authorization from the applicant/employee.
- If the background check involves medical information (e.g. a workers comp history), the consumer must provide specific written consent and the medical information must be relevant.
- 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.
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 the report contains medical information, the recipient shall not disclose the information to any other person (except where necessary to carry out the purpose for which the information was disclosed, or as permitted by statute, regulation, or order).
- 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.
- Users of background checks must have procedures in place to properly dispose of records containing this information.
If Any Adverse Action Is To Be TakenBefore taking any adverse action, based at least in part on information obtained from an agency, the employer must provide the applicant/employee:
- A notice of the adverse action
- A copy of the report.
- 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 that provided the report (include a toll-free number if the agency is nationwide).
- 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).
Restrictions On Reporting Adverse InformationWith 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 MisconductThe 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 ProtectionUnder 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).
Liability For Violations Of The FCRAFailure to comply with the FCRA can result in state government or federal government enforcement actions, as well as private lawsuits. In addition, any person who knowingly and willfully obtains a consumer report under false pretenses may face criminal prosecution.
Substantial PenaltiesUnder 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.
- Notice to Users of Consumer Reports: Obligations of Users Under the FCRA, summarizes employer obligations under the FCRA, see Notice to Users.
- Text of the Fair Credit Reporting Act (FCRA) and related Information and Notices, see Background Check Laws: FCRA/FACTA.
- Text of the California Investigative Consumer Reporting Agencies Act, see http://www.leginfo.ca.gov/calaw.html Civil Code §1786. (See Civil Code §1785 for the California Consumer Credit Reporting Agencies Act.)
- More about AB22, see New California Law Restricts Employer Use of Credit Reports.
- Local, state and federal laws and regulations that may apply, see Background Check Laws & Regulations for Private Employers.
- Information about employment background check policies, see Background Check Policy Guidelines, Samples and Resources
- Suggestions on what should be in a complete background check, see Comprehensive Background Check: The Best Background Check.
- Applicant resources, see Applicant Background Check Resources.
DisclaimerA Matter of Fact is not a law firm and cannot provide legal advice. The information and forms on this site are for educational purposes only and cannot be relied upon as legal advice. It is important that employers work with counsel to develop an employment screening program specific to their needs. Employers should obtain legal advice concerning their legal responsibilities, and to ensure that background check documents, policies and procedures are in compliance with applicable local, state and federal laws and regulations. For more see Legal Disclaimer.