Preparing 50-State Compliant Disclosure And Authorization Forms
For Conducting Employment Background Checks
Although most companies recognize that they must obtain an individual’s written authorization before running background checks on job applicants or employees, many employers do not realize that they must tailor these consent forms to meet an array of federal and state law requirements. Crafting a form that is 50-state compliant is particularly challenging. This article is intended to provide tips for human resources and in-house legal departments seeking to prepare a single consent form for use in multiple states.
Tip #1: Keep the consent form on a separate page from the job application and other employment documents.
A consent form is sometimes referred to as a Disclosure and Authorization. The federal law governing background checks, the Fair Credit Reporting Act (“FCRA”), 15 U.S.C. § 1681 et seq, requires that the Disclosure form appear in a separate document from other employment-related forms, such as job applications. 15 U.S.C. § 1681b. This requirement is intended to inform job applicants and employees of the fact that the company intends to conduct background checks. Although some people take the conservative view that the “Disclosure” (which describes the nature of the background check) must be separated from the actual “Authorization” (where the applicant/employee agrees to the background check), the Federal Trade Commission has opined that these documents may be combined. Federal Trade Commission, Steer Op. Ltr. (October 21, 1997).
Tip #2: Ensure that the form states that the background check will be completed for “employment purposes.”
Under the FCRA, an employer must inform the employee in the Disclosure form that the results of the background check will be used for “employment purposes.” 15 U.S.C. § 1681b. The purpose of this requirement is to alert the applicant or employee to the fact that background screening results could be used for such decisions as hiring, promotion, and termination. Here again, the FTC has taken the view that “employment purposes” not only includes employees, but would also include independent contractors. Federal Trade Commission, Allison Op. Ltr. (February 23, 1998).
Tip #3: Include any required state language.
Several states, such as California and Massachusetts, indicate that the Disclosure and Authorization form must indicate that the consumer report or investigative consumer report (types of background checks) may include information about the employee’s “character, general reputation, personal characteristics, and mode of living.” See e.g., Cal. Civ. Code § 1786.16; Mass. Ann. Laws ch. 93 §§ 50, 51. Similarly, if you will be conducting investigative consumer reports, many states have additional requirements. Be sure to check the applicable background screening statutes in your states to ensure that all required language is included.
Tip #4: Include check boxes for Minnesota, Oklahoma, and California employees or applicants.
Minnesota, Oklahoma, and California require that employers’ Disclosure and Authorization forms include check boxes for individuals to indicate that they would like to receive a free copy of the background screening report when one is provided to the company. The statutes literally use the word “check box,” so employers should tailor their Disclosure and Authorization form accordingly. See e.g., Cal. Civ. Code § 1786.16, Minn. St. § 13C.02, Okla. Stat. tit. 24 §§147, 148.
Tip #5: Inform Maine and New York employees of right to receive any investigative consumer report obtained by company.
Both Maine and New York require companies to notify applicants and employees that they can receive copies of investigative consumer reports, should those reports be obtained by the company. N.Y. Gen. Bus. Law § 380-c; 10 Me. Rev. Stat. § 1314. Unlike Minnesota, Oklahoma, and California, however, no check box is required on the consent form to inform employees of this right.
Tip # 6: Provide special California notice.
In California, Disclosure and Authorization forms must contain a slew of additional information. First, the Disclosure and Authorization form must identify the name of the consumer reporting agency. Second, the form must identify the nature and scope of the background check. Third, it must summarize the provisions of California Civil Code § 1786.22, which addresses how a consumer may find out what is located in a background screening company’s file. Cal. Civ. Code § 1786.16.
Tip # 7: Provide a copy of New York Correction Law Article 23-A to New York employees.
When New York employers order investigative consumer reports regarding applicants or employees’ criminal history, they must provide a copy of New York Correction Law Article 23-A to the consumer. N.Y. Gen. Bus. Law §§ 380-c, 380-g. To reduce the chance that an individual could later claim that he did not receive this statutorily-required form, employers may ask an individual to acknowledge that he or she received Article 23-A in the Disclosure and Authorization form.
CONCLUSION
The bottom line is that employers must abide by a wide variety of state and federal law in order to prepare a 50-state compliant Disclosure and Authorization form. Employers operating in multiple states may wish to seek legal counsel to ensure their forms are compliant.
Pamela Q. Devata is a partner in Seyfarth Shaw LLP’s Workplace Counseling and Compliance Labor and Employment Practice Group and Scott M. Paler is an associate in Seyfarth Shaw LLP’s Workplace Counseling and Compliance Labor and Employment Practice Group. They specialize in both litigation defense and counseling employers and consumer reporting agencies on background screening issues.
Disclaimer: This article should not be construed as legal advice. Moreover, it is not intended as a comprehensive explanation of any particular law, nor a complete summary of all applicable laws affecting background screening Disclosure and Authorization forms
