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New form needed for employee background checks

If you use an outside agency to perform background checks on employees or job applicants, then a federal law called the Fair Credit Reporting Act requires you to provide a form to any person if you take adverse action against them based on the results of the report. This form summarizes the rights of the employee or applicant under the law.

You should note that a new form is required to be used starting in 2013. If you’re still using the old form, you should discard it and begin using the new form.

The main reason for the change is that the old form was issued by the Federal Trade Commission. As of January 1, 2013, regulation of this aspect of the law has been moved to the federal government’s new Consumer Financial Protection Bureau. The Bureau issued its own form; among other things, the new form provides contact information for the Bureau as well as the FTC.

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