Does an Employer Need Applicant Consent Before a Background Check?

by Ryan Howard

2 min read

Fri, Sep 18, 2020

Does an Employer Need Applicant Consent Before a Background Check

The short answer is, "Yes."

Read on to learn why an employer needs applicant consent to run a background check and how consent protects both parties.

A Brief History of Background Checks and Consumer Privacy

Background checks are one way for an employer to manage risk. They have to balance responsibilities to protect their own interests as well as employees.

In the late 19th century, there were many companies who knowingly put their employees in harm's way. The earliest negligent hiring laws were put into place in the early 20th century after a workplace prank accidentally killed another employee. The laws gradually expanded to protect customers and more employers were held responsible for the actions of their workers. Screening before hiring helps employers to prevent damages, keep their employees and customers safe.

By the late 50's and 60's, consumer behavior was being tracked in the name of credit reporting for banks and retailers. This information included arrests, marriages, divorces and, in some cases, prevented some individuals from obtaining loans, housing or employment. By 1970, a federal regulation was passed to ensure the information being collected was accurate and representative of the individual. The Fair Credit Reporting Act (FCRA), as it was called, protects consumers and the consolidation of their data.

Why Does An Employer Need Applicant Consent?

When someone applies for a job, they're providing personal information such as their address, phone number, social security number and other employment details. An applicant is, in effect, entering into an agreement with the employer that their personal data will be protected and secure. If the employer chooses to uncover more information, such as screening an applicant's background, the applicant is again, under the assumption that the employer will protect their private data and verify that the data is true. This assumption is offered weight because of the Fair Credit Reporting Act.

How Does Applicant Consent Protect Both Parties?

The FCRA requires that employers obtain applicant consent to a background check and offers the following protections to individuals:

Consent is required for anyone to obtain the consumer's background report
The person requesting the report must have "permissible purpose" such as:
- for employment
- for credit
- for insurance
The consumer must be told if the information will be used against them
The consumer has the right to know what's on their report
The consumer has the right to dispute inaccurate or outdated information on their report

When an employer follows the guidance provided by the FCRA, they are protecting consumer rights and ensuring they will not face FCRA litigation by the Federal Trade Commission.