When conducting background checks, compliance with the Fair Credit Reporting Act (FCRA) is essential. This federal law regulates how employers can obtain and use consumer reports, including criminal background checks, credit reports, and other employment-related screenings.

At PointHR, we ensure full FCRA compliance by automating key processes, including employee consent collection, record verification, and adverse action notices—so your business stays protected.

1. Signed Employee Release:
The First Step in Compliance

Before running any background check, you must obtain a signed release from the candidate. The FCRA mandates that:
✔️ Employers must provide a clear and conspicuous disclosure that a background check will be conducted.
✔️ The disclosure must be standalone (not part of an employment application or other forms).
✔️ The candidate must give written authorization before screening begins.

How PointHR Helps:
We send the authorization request electronically, allowing employees to sign the release online—ensuring compliance and streamlining the process.

 

2. Verifying Criminal Records at the Source

When a criminal record appears in a database search, the FCRA requires employers to ensure accuracy before taking action. The law states that:
✔️ Records found in a national database must be verified at the primary source (county courthouse or state repository).
✔️ Employers must take reasonable steps to ensure the information is accurate, up-to-date, and complete.

How PointHR Ensures Accuracy:

✅ Automatic Hands-On County-Level Searches – When our system finds a record in a national or statewide database, we immediately order a hands-on county search to verify the information before reporting it.
✅ FCRA-Compliant Reporting – We ensure that only verified and legally reportable records are included in final reports.

 

3. Pre-Adverse & Adverse Action Notices: Protecting Your Business

If an employer decides not to hire, promote, or retain an employee based on their background check, the FCRA requires a two-step process:

Step 1: Pre-Adverse Action Notice

Before making a final decision, you must:
✔️ Notify the candidate that their background check contains information that may affect employment.
✔️ Provide a copy of the background report and a summary of their FCRA rights.
✔️ Allow the candidate time to dispute or correct errors before making a final decision.

Step 2: Adverse Action Notice

If, after a reasonable waiting period, the employer still decides against hiring the candidate, they must send:
✔️ A final notice of adverse action, stating the employment decision.
✔️ Contact information of the screening provider (PointHR) so the candidate can dispute inaccuracies.
✔️ A reminder of their FCRA rights.

How PointHR Simplifies This Process:
✅ Automated Pre-Adverse & Adverse Action Notices – Employers can generate and send these notices directly from our system, ensuring compliance and efficiency.

 

4. State-Specific Screening Laws: Additional Consent Requirements

While the FCRA is a federal law, some states have stricter requirements, including additional consent forms and specific disclosures before screening can begin.

Notable State Laws Requiring Additional Consent:

📍 California (CA): Requires a separate disclosure form, and employers must provide a copy of the report upon request.
📍 New York (NY): Requires a separate consent form and additional notices about employee rights.
📍 Minnesota (MN) & Oklahoma (OK): Require applicants to check a box to receive a copy of their report.
📍 Washington (WA): Employers must provide a summary of consumer rights under state law before screening.

How PointHR Ensures Compliance with State Laws:
✅ System-Generated State-Specific Forms – Our platform automatically provides the correct consent forms based on the applicant’s location.
✅ Built-in Compliance Alerts – Employers are notified if state laws require additional steps before screening.

 

Why Choose PointHR for FCRA-Compliant Background Checks?

PointHR makes FCRA compliance simple and automated, ensuring your background checks are conducted accurately, legally, and efficiently.

✔️ Electronic consent collection to streamline candidate authorization.
✔️ Automatic county-level verification for accurate and FCRA-compliant reports.
✔️ Built-in pre-adverse and adverse action workflows to protect your business.
✔️ State-specific compliance handling for additional consent and notices.

Get Started Today

Ensure your hiring process remains FCRA compliant with PointHR’s background check solutions.

📞 Call us at 866-661-1500 or contact us here.