Employee Privacy

Guidance from the Federal Trade Commission (FTC) on What Employers Need To Know About Background Checks, Credit History, and Consumer Reports

As an employer, you may use consumer reports or credit history checks when you hire new employees and when you evaluate employees for promotion, reassignment, and retention — as long as you comply with the Fair Credit Reporting Act (FCRA), which spells out your responsibilities when using consumer reports for employment purposes.

There are legal consequences for employers who fail to get an applicant’s permission before requesting a consumer report or who fail to provide pre-adverse action disclosures and adverse action notices to unsuccessful job applicants. The FCRA allows individuals to sue employers for damages in federal court. A person who successfully sues is entitled to recover court costs and reasonable legal fees. The law also allows individuals to seek punitive damages for deliberate violations. In addition, the Federal Trade Commission, other federal agencies, and the states may sue employers for noncompliance and obtain civil penalties.




New State Laws That Also Address Employers Uses of Credit Reports and Criminal History in Background Checks and Screening — Which Law Applies To Your Business?

It is an open and on-going question as to what law applies in the context of appropriate method and practices for background checks and consumer reports. This is especially problematic when the individual states where you may have offices or employees mandate different legal and compliance standards. Some examples of recent changes in State laws:

California:


Massachusetts:


Illinois:


Oregon:



The Article 29 Working Party Opinion to Clarify Issues Relating to the Processing of Personal Information in The European Union

An international organization has many issues with differing laws in the many countries where it conducts business. One such legal and compliance issue is the differeing protections and standards required for the processing of personal information of residents in the European Union. This opinion attempts to help further clarify the rules that apply to the processing of personal information — including the personal information of employees of multi-national companies in centralized HR databases.