Not handling the background check process correctly or misusing the information contained within the background check, also called a consumer report, can lead to liability for employers. Some potential background check pitfalls employers could face include:
- A violation of the Fair Credit Reporting Act (FCRA) for taking an adverse action based on inaccurate information.
- A violation of the Fair Credit Reporting Act if you conduct a background check on a job applicant that hasn’t provided written authorization.
- A violation of the Fair Credit Reporting Act for failing to abide by FCRA requirements protecting an applicant’s procedural rights.
- An arrest or conviction record discrimination claim if it is believed arrest or conviction record information in the consumer report is the reason for adverse action. The Wisconsin Fair Employment Act makes arrest record discrimination and conviction record discrimination illegal in Wisconsin.
- A race or ethnicity discrimination claim if it is believed your use of consumer reports as a screening device is having an adverse effect on a particular race or ethnic group, otherwise known as “disparate impact.” You can be held accountable for a background check policy that causes discrimination even if you weren’t aware or never meant for it to happen.