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The Big Apple to Limit Use of Background Reports (1)

On Behalf of | May 4, 2015 | Consumer Protection

Just this month, New York City submitted an amendment regarding the use of credit reports in employment background checks.  If the amendment is passed into law, it would make the use of credit reports by employers during an employment background check unlawful and considered discriminatory practice for hiring purposes.

Under the Fair Credit Reporting Act (“FCRA”), as it stands, employers are entitled to conduct employment background checks by accessing a job applicants’ or existing employees’ credit file.  The statute requires an employer to receive express written consent and to follow the letter of the law after accessing a consumer report should the employer rely on the information contained in the report to make any hiring decisions.  While the amendment incorporates numerous exceptions, it will drastically affect employers’ rights when conducting background checks on potential or existing employees.  If passed into law the amendment will prohibit employers from using a consumer report to make employment decision about a potential or existing employee or to discriminate against that employee.

Under the exceptions to the amendment, an employer may request a copy of an employee’s consumer report pursuant to a court order, subpoena or legal investigation.  Furthermore, employers involved a self-regulatory organizations, federal or state law positions and  positions as police officers must also agree to have their employer review their report.  Employees whose positions require them to be bonded under federal or state law must also agree to allow their employer to access their consumer reports.

This amendment will apply to all employers and agencies with four or more employees and violations may be brought both locally and federally.  In the interim, employers should prepare for the amendment to pass and should verse themselves in the language of the amendment.  What does this mean for potential and existing employees?  This amendment would work in their favor making them more eligible in the job market, considering the vast number having less than stellar credit reports.

If you feel your rights have been violated under the FCRA during an employment background check, contact SmithMarco P.C. for a completely free case review.