The job market today is complex, leading to more competitive hiring processes where background checks have become essential. However, many third-party screening firms, officially termed Consumer Reporting Agencies (CRAs), often do not adhere to federal regulations, posing dangers for both candidates and employers. Here are some frequent risks faced by employers and CRAs.
The risk of false positives
An incorrect background check report can abruptly and unfairly disrupt a person’s career path. This issue often arises when screening companies do not comply with the federal Fair Credit Reporting Act (FCRA). This institution requires CRAs to use practical steps to ensure the highest level of accuracy.
If they fall short, these reports may include false positives, like mixing records as a result of similar common names, listing a conviction that has been expunged or sealed or even repeating a same charge many times. These false positives can stand in the way of a job opportunity, housing or obtaining professional licenses, which can result in substantial actual and statutory damages under the FCRA.
Legal liability and employer risks
Employers that use these reports face legal liabilities. For instance, if they deny a job based on an inaccurate report, they have to follow an Adverse Action Process, this means that they have to provide the applicant with a copy of the report and a summary of their rights before making the final decision.
If a company fails to provide the necessary notices or giving the applicant enough time to contest an error can result in expensive lawsuits, both individual and class-action, against the employer.
If a background check has been erroneous, you have legal options. An experienced law firm can assist you to navigate through this process.