Over the last few years, there has been an evolving trend to limit the use of information contained in a background check for employment purposes. Perhaps this trend has been most visible in the context of the growing number of state and local so-called “ban-the-box” laws prohibiting employers from asking job applicants about any criminal background history before a job offer is made. And as we recently reported, late last year Congress approved the “Fair Chance Act,” a law that will prohibit federal contractors from requesting the disclosure of criminal history record information regarding applicants before the contractor extends a conditional offer of employment.

Background checks for employment purposes are also covered to a certain extent under the federal Fair Credit Reporting Act (FCRA), which regulates the information gathering and reporting activities of third party “consumer reporting agencies” (CRAs). In this context, the Democrat-controlled House of Representatives recently weighed in on the trend by passing legislation – “The Comprehensive CREDIT Act of 2020,” H.R. 3621 – that would amend the FCRA to, among other things, significantly narrow information that employers could receive from a third-party reporting agency as part of a background check. Although the bill is unlikely to be considered this year by the Republican-controlled U.S. Senate, it signals that the issue has now been added to the domestic priority agenda of House Democrats and could easily advance if the political dynamic changes after the November elections.

We thought it might be helpful to provide a general refresher on the FCRA’s requirements, explain how H.R. 3621 would impact those obligations, and present some best practices for FCRA compliance.

Members of the Center for Workplace Compliance (CWC) can read more here.