Hiring is a difficult and costly process. You look at resumes and applications, you interview a few times, you check some references (maybe) and now youâ??re ready to hire. In California, once you make a job offer, it is difficult to rescind it. Why not take one extra step and conduct a professional background check using â??third partyâ? reporting agency that specializes in these investigations just to make sure everything you were told is accurate and truthful.

Third Party Background checks in California are regulated by federal and state law and are subject to specific legal requirements. The federal Fair Credit Reporting Act (FCRA) regulates â??consumer reportsâ? and â??investigative consumer reports.â? Investigative consumer reports will contain personal interviews of friends and neighbors that go beyond simply verifying facts and dates.
Under the FCRA, â??consumer reportsâ? include:
â?¢ Credit checks.
â?¢ Criminal record history.
â?¢ Verification of education.
â?¢ Other related information.

If you use a reporting agency to conduct either type of background investigation you must follow rigorous notice and disclosure rules. You must make appropriate disclosures to the applicant before obtaining a report from the reporting agency.

The disclosure must be in writing and contain the following information:
â?¢ A statement that a background check may be obtained for employment purposes.
â?¢ The purpose of the report.
â?¢ A statement that the report may include information about the individualâ??s character, general reputation, personal characteristics, mode of living, creditworthiness and credit standing.
â?¢ How to contact the reporting agency conducting the investigation.
â?¢ The nature and scope of the investigation, including a summary of the individualâ??s rights under the FCRA.

If the background check will include personal interviews, you must provide the applicant with a summary of FCRA rights (a copy of which is available on the Federal Trade Commissionâ??s web site at www.ftc.gov ). You must include this information in a stand-alone document and not as part of the employment application or other document.

You must obtain written consent to conduct the background check and provide a â??check boxâ? on the disclosure form or elsewhere so the applicant may request a copy of the report. If requested, a copy of the report generally must be provided by you within three days of its receipt. However, if you are obtaining a consumer credit report, the applicant must receive a copy of the report at the same time it is sent to you. You can generally arrange for the reporting agency to provide the copy.

Finally, you must certify to the reporting agency that it has complied with the notice and disclosure requirements and is obtaining the report for a permissible purpose.

Under the FCRA, if you intend to take some form of adverse action against the applicant based on the report, you must provide the applicant or employee with a copy of the report and a summary of rights. Then the applicant may provide information to dispute the report.

Under state and federal law, if you proceed with the adverse action, you must provide the applicant with:
â?¢ An adverse action notice.
â?¢ Information on how to contact the reporting agency.
â?¢ A statement that the decision to take an adverse action was based on information in the report.
â?¢ Information on how to obtain a free copy of the report.
â?¢ A summary of rights under both state and federal law.

Moreover, if you take an adverse action (e.g., refusing to hire an applicant) based on the information uncovered by the reporting agency during a public records search must provide a copy of the public records to the applicant, even if the individual initially waived his or her right to receive one.
Your reporting agency should be able to supply you with all the required disclosure and reporting forms and to protect yourself from potential liability, you should get confirmation in writing from the reporting agency you are using that it and all the forms it uses comply with both state and federal laws.
Finally, if you make an offer of employment before you have the completed background check (as is often the case), it should be made clear to the applicant that this is a contingent offer based on the successful completion of your background investigation.