In a recent HR Daily Advisor Tip entitled ‘The FCRA Dance—Steps Are Easy, Mastery Hard,’ Attorney at Law and safe hiring expert Lester Rosen explains that “to avoid employee problems, avoid problem employees” and that employers need to understand background checks and “the delicate dance” of the federal Fair Credit Reporting Act (FCRA) that regulates employment screening.

Rosen, founder and President of Employment Screening Resources (ESR), a Consumer Reporting Agency (CRA) and provider of background checks accredited by The National Association of Professional Background Screeners (NAPBS®), says the Fair Credit Reporting Act is “a bit of a misnomer” since it is not limited to credit reports but also covers public records, criminal records, sex offender registration, driving records, and other various information.

Rosen – the author of ‘The Safe Hiring Guide,’ a comprehensive guide to employment screening – recently explained his “four easy steps for FCRA compliance” at the Society for Human Resource Management (SHRM) Employment Law and Legislative Conference held in Washington, DC.

  • Step 1: Employer Certifications
  • Step 2: Disclosure and Authorization
  • Step 3: Adverse Action Letters
  • Step 4: Notice to Applicant after Adverse Action

Step 1: Employer Certifications

Prior to providing a consumer report, employers must first certify in writing to the CRA that they will follow the FCRA rules concerning disclosure, authorization, notice and adverse action notices, and that they will not use information in violation of any state or federal discrimination law, according to Rosen.

Step 2: Disclosure and Authorization

Before obtaining any type of consumer report, Rosen says an employer must:

  • Make a clear and conspicuous disclaimer to the consumer, in writing, in a standalone document, that a consumer report may be obtained for employment purposes.
  • Obtain the consumer’s signed authorization to obtain the consumer report.

Employers may combine the disclosure and the request for authorization, but not as part of the employment application, says Rosen.

Step 3: Adverse Action Letters

Rosen says that prior to taking adverse action based in whole or in part on a consumer report, employers must provide applicants with copies of the consumer report and the document “A Summary of Your Rights Under the Fair Credit Reporting Act.”

  • Employers must give the consumer the same report the employer receives.
  • While the FCRA is not clear on how long an employer must wait before denying employment based upon information contained in a consumer report, Rosen says the best practice is to give the consumer “a reasonable period of time” to review the report and to dispute its contents before making the final decision because of the many possibilities of mistakes that include stolen or mistaken identity, incorrect or confusing records, or that the consumer did not know about the negative record and had no chance to correct it.

Step 4: Notice to Consumer after Adverse Action

If the adverse action becomes final, Rosen explains that a second letter is required under the FCRA that must provide the following:

  • Notice of the adverse action.
  • The name, address, and telephone number of the consumer reporting agency that provided the consumer report.
  • A statement that the CRA did not make the adverse decision and cannot provide the consumer with the specific reasons supporting the action.
  • Notice of the consumer’s right to obtain a free copy of the consumer report.
  • Notice of the consumer’s right to dispute the accuracy or completeness of the information contained in the consumer report.

To read the full article ‘Complying with the Fair Credit Reporting Act (FCRA) in Four Easy Steps’ by Lester Rosen, visit For more information on background checks, visit Employment Screening Resources (ESR) at

About Employment Screening Resources (ESR): Founded in 1997 in the San Francisco Bay area with a mission to help employers and employees maintain safe workplaces, Employment Screening Resources (ESR) is accredited by The National Association of Professional Background Screeners (NAPBS®) and wrote the book on background checks with ‘The Safe Hiring Manual’ by founder and President Lester Rosen. For more information about ESR, visit or email ESR News Editor Thomas Ahearn at [email protected].