7 Considerations for The Fair Credit Reporting Act (FCRA)

Below are 7 considerations for The Fair Credit Reporting Act:

1. Written Notice: Ensure you are providing a written notice that a background check will be conducted, and the information will be used when making an employment decision.  Ensure transparency and proactively communicate.  Third-parties should have these forms to use or recommend what to add into the written notice.  SHRM has templates available as well for organizations to use.  A Google search cut, and paste is not a recommended solution to the written notice language or organization policy.
2. Applicants Consent: Prior to starting the background check, ensure you obtain written consent to obtain the check and investigative summary report(s).
3. Communication with Third-Party: Utilize the tools and resources of the third-party to certify the individual’s permission. These tools should follow current FCRA, local and state regulations.  This should also confirm that the documentation will not be used to discriminate, or any misuses of the information contained in the report.
4. Adverse Action: If your organization utilizes the information to make an employment decision based on the background check, provide the individual with a notice of pre-adverse action that includes a copy of the background check results and a copy of “A Summary of Your Rights Under the Fair Credit Reporting Act.” The third-party vendor might have templates for us to use, be consistent and communicate to the applicant.  If you do not ask, you will not know the answer.  There are examples to use on the SHRM website to review as potential options.
5. Five Business Days: Provide five days for the individual to dispute the background check findings before a final decision on employment is rendered.
6. Final Decision Reached: If you decide to move in a different direction, provide the applicant or employee a final notice of adverse action. This notice should include; name, address, phone number of the consumer reporting company, statement that the company supplied the report did not make the decision to take the unfavorable action and rights to dispute the accuracy of the report.  The individual can also request an additional report free from the third-party vendor within 60-days.
7. Record Retention: Ensure you retain records consistently under state and federal law. Dispose of records by burning, pulverizing or shredding.  Remember destruction of electronic documents as well; emails, PDF’s, etc.

 

FRCA Tips for Employers

These are just a few considerations for complying with The Fair Credit Reporting Act.  There are many templates for us to review through the SHRM website.  What if an applicant admits they will have something flagged on their background check prior to running the check?  Depending on the organization, regulations, policies and position should provide guidance and a consistent process to determine if we should consider or should not consider an applicant.  Having a policy in place that is consistently enforced will help guide your organization through these unique situations and conversations.

Ensure you are using a reputable third-party vendor, that complies with federal, state and local laws and regulations, as well as internal company policies.  Laws continue to evolve throughout the country at the federal, state and local level, regarding background checks and “ban-the-box” legislation.  Seek guidance prior to implementing a background check process and create an RFP for multiple third-party proposals.  Generate options and select a vendor that fits the needs of your organization.  Many third-party vendors specialize in certain industries, they understand specific regulations, especially nonprofit requirements.  I’m happy to work with any employer to draft notices, disclosure statements, authorizations, etc.  A consist, fair and proactive processes are necessary for all organizations to ensure legally and ethically sound decision making within the organization.  Do not forget the “contingent upon” language in the offer letter.

Massachusetts Paid Family & Medical Leave 7/1/2019:

“Massachusetts will soon offer one of the most generous family and medical leave programs in the country. Businesses that employ one or more individuals in Massachusetts are subject to the Massachusetts Paid Family and Medical Leave (PFML) law and, beginning in October 2019, must begin remitting family and medical leave contributions to the Department of Family and Medical Leave through the Department of Revenue’s MassTaxConnect system on behalf of Massachusetts employees.

The employer contribution requirements differ based on the number of employees in Massachusetts. Specifically, employers are required to remit a contribution of 0.63 percent of eligible payroll. Employers with 25 or more employees may split the contribution between employee payroll deductions and an employer contribution pursuant to a contribution rate split determined by the statute and regulations. Employers with fewer than 25 employees must remit contributions on behalf of their workers to cover the portion of PFML contributions due from employees for family and medical leave, but they are not required to pay the employer portion of the contributions.

• April 29, 2019: Approved Plan Applications Available to Employers.
• July 1, 2019: Notice Requirements. Employers must post a notice describing the benefits available under the law and provide each employee, within 30 days of hire, a written explanation of the employee’s rights. A workplace poster explaining the benefits available under the PFML law is available on the Department of Family and Medical Leave website.
• July 1, 2019: Payroll Deductions Begin.
• October 31, 2019: Contributions Due for July through September 2019.
• January 1, 2021: Most Benefits Under the Law Available.
• July 1, 2021: All Benefits Under the Law Available.”[i]

Important dates:  notice requirement begins 7/1/2019
employer contributions begin 7/1/2019
employee payouts begin 1/1/2021

This is a significant change for employers in the State of Massachusetts.  Continue to monitor for updates on this legislation and keep all postings and communications up-to-date within your organization.  This includes remote workers as well.

DOL Proposed Overtime Calculation Changes:

“The proposed rule would exclude all of these from the regular rate, and in addition would exclude:

• The cost of providing wellness programs and onsite specialist treatment.
• Reimbursed expenses, including travel expenses that do not exceed the maximum travel reimbursement under the Federal Travel Regulation system.
• Accident, unemployment and legal services, which the DOL considers to be benefits plans.”[ii]

Additional changes to monitor for under the proposed rule change include bonuses, employee-of-the-month awards, spot bonuses, etc.  Nothing in the proposed rule is finalized, but we have not seen significant changes to “regular rate” definitions in 50-years.  Continue to monitor and prepare for these changes.

EEOC Releases Fiscal Year 2018 Enforcement and Litigation Data

“The FY 2018 data show that retaliation continued to be the most frequently filed charge filed with the agency, followed by sex, disability and race. The agency also received 7,609 sexual harassment charges – a 13.6 percent increase from FY 2017 – and obtained $56.6 million in monetary benefits for victims of sexual harassment. Specifically, the charge numbers show the following breakdowns by bases alleged, in descending order:

• Retaliation: 39,469 (51.6 percent of all charges filed)
• Sex: 24,655 (32.3 percent)
• Disability: 24,605 (32.2 percent)
• Race: 24,600 (32.2 percent)
• Age: 16,911 (22.1 percent)
• National Origin: 7,106 (9.3 percent)
• Color: 3,166 (4.1 percent)
• Religion: 2,859 (3.7 percent)
• Equal Pay Act: 1,066 (1.4 percent)
• Genetic Information: 220 (.3 percent)”[iii]

[i] Barclay Damon LLP Email 4/5/2019

[ii] SHRM Article

[iii] https://www.eeoc.gov/eeoc/newsroom/release/4-10-19.cfm