When hiring a new employee, many employers request that a potential employee sign what is often referred to as a “Release,” which is used to initial a background screening process. However, there are strict federal rules to which an employer must comply when obtaining this information.

Section 604(b)(2) of the FCRA specifically provides that “…a person may not procure a consumer report…for employment purposes with respect to any consumer, unless—

(i) a clear and conspicuous disclosure has been made in writing to the consumer at any time before the report is procured…in a document that consists solely of the disclosure, that a consumer report may be obtained for employment purposes; and

(ii) the consumer has authorized in writing…the procurement of the report by that person.”

The statute requires this disclosure in a completely standalone document, without any extraneous information. The document should be referred to as the “Disclosure and Authorization” form, with the intent being to inform the applicant that the employer may obtain a consumer report for purposes of the employment application process, and they are seeking the applicant’s written permission to do the same. The Fair Trade Commission has made clear as have the courts that Section 604(b)(2) does allow the authorization to be part of this standalone document and therefore certain identifying information may also be included to initiate a background check, like name, date of birth, and social security number.

Despite the clear language provided in the statute, many employers continue to include other information, including language asking the applicant to release the company and others from any liability and responsibility in connection with the consumer report, also known as a release of liability. While including this language may seem to make some business sense, it is in direct violation of the statutory requirements. Employers also add information about drug screening and company-specific policies to the

Some employers also add company policy language, drug screen information and other miscellaneous items. Some add this “Disclosure and Authorization” as part of their employment application, although it has always been clear that this “Disclosure and Authorization” cannot be part of some boilerplate language somewhere in the application, and the statute specifically provides that it must be separate in a standalone document.

Are you complying with the FCRA?

Feel free to give me a call at 605-731-0218 if you have any questions.