When a company uses commercial background checks to evaluate the suitability of job applicants, they must comply with the FCRA. The FCRA stipulates that before an employer obtains a consumer report about an applicant, the applicant must receive notice and certain disclosures of their rights, and must provide their written consent. These requirements have limited and narrow exceptions, such as Section 603(y), which excludes certain communications for employee investigations. Employers, lawyers and the background screening industry have debated when background checks of job applicants fall under this 603(y) exception. Recently, the Federal Trade Commission (FTC) examined whether background screening reports for job applicants are exempt from FCRA requirements under Section 603(y)-and the short answer was, “No.”

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