Employment Law Practice Exam

Under the Fair Credit Reporting Act, employers must do which of the following?

1. Notify an applicant that they plan to reject them based on information from a credit report

2. Obtain consent from an applicant before conducting any background check

3. Verify that the information in a credit report reasonably appears to be accurate

4. All of the above

The correct answer is: All of the above

The Fair Credit Reporting Act (FCRA) is designed to protect the privacy and accuracy of information in consumer credit reports, and it imposes several requirements on employers who use these reports in the hiring process. Employers are required to notify applicants if they intend to take adverse action based on information obtained from a credit report. This means that if the employer decides to reject an applicant due to findings in their credit report, they must inform the applicant of this intent. Additionally, employers must obtain consent from applicants before conducting a background check, which includes checking credit reports. This ensures that applicants are aware of and agree to the check before any action is taken. Lastly, while employers are not responsible for directly verifying the accuracy of the information in the credit reports, they are required to ensure that they are using reports from a reputable consumer reporting agency and that the information they act on is sufficiently reliable. As such, all these requirements collectively emphasize the need for transparency and fairness in the hiring process. Therefore, the correct choice encompasses all these obligations under the FCRA.