What Does the California Legislature Have to Say About It?

In Part I of this series, we discussed the Fair Credit Reporting Act (“FCRA”) and its application to background checks on job seekers, and current employees alike. As mentioned in that article, the FCRA is the floor, not the ceiling. As such, certain states (like California) sought to provide their citizens with even greater protections in the employment context than the Federal government provided.                

In 2001, existing California law was amended to provide potential job applicants, and current employees, greater protections as it related to background checks in conjunction with employment decisions.  In essence, it mandated that employees who were subject to adverse employment decision receive more information regarding the basis of that decision than the FCRA required.

As mentioned in Part I, the FCRA only applied to outside entities who compile the background check, which the employer then relies on to make their employment decisions. The California law however, sets forth strict requirements for the employer who conducts the background check himself or herself, and then utilizes that information to make an employment decision.

In addition to the rights provided by the FCRA, California citizens receive greater protection through expanded definitions of key terms in the FCRA, as well as enhanced notice requirements in relation to background checks.

If you recall from Part I, the term “Investigative Consumer Report (“ICR”) only covers interviews with friends, family, and colleagues as it relates to your moral character, personal characteristics, general reputation, and mode of living; California redefines the FCRA to cover any method of obtaining that information.  Further, any company that compiles this information is referred to as an Investigative Consumer Reporting Agency (“ICRA”)

It is important to note that the an Investigative Consumer Report does not include an employee’s credit report, if a credit report is also requested, the California’s Consumer Credit Reporting Agencies Act (“CCRAA”) provides additional protections.

Once a prospective employee seeks a job with an employer, California requires far more extensive notifications than the FCRA. Before an outside agency compiles a report on a prospective employee, the employee must receive notice that: (1) informs the employee of the purpose of the report, (2) informs the employee of the name, number, and address of the company that is compiling the report, (3) informs the employee of their rights to review all reports obtained by the company compiling the report; and (4) provides the employee with a copy of that report within three (3) business days of the employers receipt, if the employee requests to receive the report.

An employer is not allowed to obtain a background report on an employee without their consent[1]. As mentioned above, the California laws are in addition to, not instead of the FCRA; an employee is entitled to all the protections set forth in Part I of this series.

In the next portion of this series, Part III, we will discuss the specifics of what is allowed to be reported in your background check.

[1] There is one notable exception in California – if your employer suspects an employee of wrongdoing or misconduct, the employee’s consent is not required to obtain a background check – how the employer uses that information poses a much murkier question.