Whenever an employer uses a background investigation subject to the Fair Credit Reporting Act, it must have 3 documents to use it lawfully.
1. An employer must get the written authorization or consent from the applicant or employee before obtaining a background or consumer report.
2. If the employer is going to make some employment decision affecting the terms or conditions of employment, such as not hiring an applicant, firing an employee, non-promotion or some other adverse action, the employer must provide a copy of the report and a statement of the consumer’s rights under the Fair Credit Reporting Act to the employee or applicant within a reasonable period of time before taking the adverse action. This is meant to give the employee or applicant time to review and correct any inaccuracies in the report and inform the employer of the corrections–hopefully preventing the adverse action from happening.
3. If the employer does take an adverse action based on information in the background report, it must then give the employee or applicant a notice of taking action based on the background report upon taking this action.