The FCRA background check process: a step-by-step guide for recruiters
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The FCRA background check process has five steps for any employer that gets a background report from a screening company: give the candidate a clear written disclosure in a stand-alone document, get their written authorization, certify compliance to the screening company, send a pre-adverse action notice with a copy of the report and the summary of rights before rejecting anyone because of it, and then send a final adverse action notice. Most of the legal risk sits in skipping or merging those steps, not in running the check.
This page walks through each step in order with the statute behind it, the timing, copy-ready notice wording, and what changes when an agency is between the candidate and the employer. For when criminal history may be raised at all, which is set by state and city fair chance laws rather than the FCRA, see ban-the-box interview questions. That page covers timing; this one covers the paperwork.
Not legal advice. This summarizes the federal Fair Credit Reporting Act and the FTC's employer guidance as published on the linked pages as of September 2026. Many states add their own rules for background checks, credit checks and criminal history. Use counsel-approved forms from your screening company or lawyer, and confirm what applies where you hire.
When the FCRA applies
The FCRA applies when you get a "consumer report" for employment purposes from a "consumer reporting agency": in practice, any background screening company that assembles criminal records, employment or education verification, driving records or credit history for you. It does not apply to checks you do yourself, such as calling a former manager or reading a public court website. The FTC's employer guide, Background Checks: What Employers Need to Know, is the plainest official summary.
| Check | FCRA applies? |
|---|---|
| Screening company runs criminal, education, employment or motor vehicle checks | Yes |
| Screening company calls references and asks about the candidate's character or reputation | Yes, and it may be an investigative consumer report with extra rules |
| Recruiter calls references directly | Generally no (Title VII and state law still apply) |
| Hiring manager searches the candidate online | Generally no, but fair chance laws may prohibit it before an offer |
| Credit report through a screening company | Yes, and several states restrict employment credit checks |
The five steps in order
| Step | What happens | Statute | When |
|---|---|---|---|
| 1. Disclosure | Clear and conspicuous written disclosure that a consumer report may be obtained for employment purposes, in a document that consists solely of the disclosure | 15 U.S.C. § 1681b(b)(2)(A)(i) | Before the report is ordered |
| 2. Authorization | Candidate authorizes the report in writing; may be on the disclosure document | § 1681b(b)(2)(A)(ii) | Before the report is ordered |
| 3. Certification | Employer certifies to the screening company that it made the disclosure, got authorization, will follow the adverse action steps and will not use the report in violation of equal employment law | § 1681b(b)(1) | Usually once, in the account agreement |
| 4. Pre-adverse action | Copy of the report and "A Summary of Your Rights Under the Fair Credit Reporting Act" | § 1681b(b)(3)(A) | Before any adverse action based in whole or in part on the report |
| 5. Adverse action notice | Notice of the action, screening company's name, address and phone, a statement that it did not make the decision, and the right to a free copy within 60 days and to dispute | § 1681m(a) | After the decision |
"Adverse action" is broader than rejecting an application. Withdrawing a conditional offer, declining to place a temp, or moving someone to a lower-paid role because of the report all count. "Based in whole or in part" means that if the report was one reason among several, the steps still apply.
Step 1 and 2: the disclosure and authorization
The requirement that trips employers up is "a document that consists solely of the disclosure." The FTC calls this stand-alone format and says the notice cannot be part of an employment application. The statute allows the authorization on the same document, and little else, so keep it short.
What to leave out
- Liability releases or waivers of claims against the employer or screening company
- At-will employment statements, application certifications or drug policy terms
- State notices crammed into the same paragraph; put them on a separate page or in a clearly separate section your counsel has approved
- Small print or a box buried in an online application flow
An illustrative federal disclosure, to adapt with counsel:
DISCLOSURE REGARDING BACKGROUND INVESTIGATION
[Employer name] may obtain a consumer report about you from a consumer
reporting agency for employment purposes, including for decisions about
hiring, placement, retention or promotion. The report may include
information such as [criminal records, verification of employment and
education, motor vehicle records, professional licence checks].
The consumer reporting agency is [name, address, phone, website].
------------------------------------------------------------------------
AUTHORIZATION
I have read the disclosure above and authorize [Employer name] to obtain
a consumer report about me for employment purposes.
Full name: ____________________ Date: __________
Signature: ____________________Investigative consumer reports
If the screening company will interview people who know the candidate about their character, general reputation, personal characteristics or mode of living, it is an investigative consumer report under 15 U.S.C. § 1681d. The candidate must be told in writing no later than three days after the report is first requested, including their right to ask for a description of the nature and scope of the investigation. If they ask in writing, that description is due within five days of the request or of when the report was requested, whichever is later.
Step 4: the pre-adverse action notice
Before you act on anything in the report, send the candidate a copy of the report you relied on and the Summary of Your Rights under the FCRA. The screening company usually supplies the current summary form; use theirs rather than an old copy saved on a drive. Then wait.
The federal statute does not name a number of days. The point of the step is that the candidate can see the report and tell you it is wrong or explain it before the decision is final: records get attached to the wrong person with a common name, and dismissed charges appear as open ones. Five business days is common practice, and some fair chance laws set at least five business days, as the ban-the-box page shows for California and New York City.
Subject: Your background report — before we make a decision
Dear [name],
As part of our hiring process for the [role] position, we received a
background report about you from [screening company]. Based on
information in that report, we are considering [withdrawing the
conditional offer / not moving forward with your application].
No final decision has been made. Attached are:
1. A copy of the report
2. A Summary of Your Rights Under the Fair Credit Reporting Act
If any information in the report is inaccurate or incomplete, or you
would like us to consider anything else, please contact [name, email,
phone] by [date: at least [5] business days from today]. You can also
dispute information directly with [screening company, phone, website].
[Add any state or city notice or assessment required where the job is
located.]
Sincerely,
[name, title]If the report includes criminal history, the EEOC's guidance on individualized assessment and any local fair chance analysis should happen in this window, before the final decision.
Step 5: the adverse action notice
If the decision stands, § 1681m(a) requires a notice of the adverse action with the name, address and telephone number of the screening company, a statement that the screening company did not make the decision and cannot explain why it was made, and notice of the right to a free copy of the report from the company within 60 days and to dispute its accuracy or completeness. The statute allows oral, written or electronic notice; a written one is the one you can prove you sent.
Subject: Your application for [role]
Dear [name],
Thank you for your interest in the [role] position. We have decided
[not to move forward with your application / to withdraw our
conditional offer]. This decision was based in whole or in part on
information in a consumer report from:
[Screening company name]
[Address]
[Toll-free phone] [Website]
[Screening company] did not make this decision and cannot tell you why
it was made.
You have the right to obtain a free copy of your report from
[screening company] if you ask within 60 days, and the right to dispute
the accuracy or completeness of any information in it directly with
[screening company].
Sincerely,
[name, title]Keep the decision separate from the report where it really was separate. If a candidate withdrew, or failed a skills test, say that and do not send an adverse action notice that implies the report was the reason. If the report was part of the reason, send it.
What recruiters and agencies need to watch
Agency and client roles
On a staffing placement, the agency, the client, or both may order reports and take decisions. The FCRA's duties attach to whoever procures a report for employment purposes and whoever takes adverse action based on it, so the paperwork has to follow the decision, not the logo on the job order. Write it into the client contract:
- Who has the account with the screening company and signs the certification
- Whose disclosure and authorization the candidate signs, naming the right company
- Who reviews the report and who decides
- Who sends the pre-adverse and adverse action notices, and on what timeline
- Who handles the candidate's dispute or explanation, and how it reaches the decision maker
What the report can contain
Under § 1681c(a), screening companies generally may not report arrest records, civil suits and judgments, or other adverse items (other than criminal convictions) more than seven years old. That limit does not apply for jobs with an annual salary that equals or may reasonably be expected to equal $75,000 or more (§ 1681c(b)(3)). Convictions are not subject to the federal seven-year limit, though some states restrict them further.
Keep interviews and background checks apart
- Do not discuss what a report might show during screens or interviews, and do not note anything a candidate volunteers about their record.
- Do not start the check before the stage local law allows, commonly after a conditional offer.
- Do not tell a candidate informally "the check came back bad" before the pre-adverse action notice. That conversation is the notice step, and it needs the report and the summary.
- Keep reports out of the ATS notes field and away from interviewers. Limit access to whoever decides.
State rules on top
States add to the federal steps, and the differences are real. One example: California's Investigative Consumer Reporting Agencies Act requires a separate written disclosure before an investigative consumer report for employment purposes that names the screening company and describes the nature and scope of the investigation, and a check box the candidate can tick to receive a copy, which must then be sent within three business days of the employer receiving the report (Cal. Civ. Code § 1786.16). California defines investigative reports differently from the federal law, so ask counsel which California forms apply to ordinary criminal checks. Other states and cities limit employment credit checks, add their own notice forms, or set assessment steps for criminal records. Your screening company's state forms library is the practical starting point; have counsel approve the set you use.
A checklist for each hire
- The check is ordered no earlier than local law allows for this job.
- The candidate received the stand-alone disclosure and signed the authorization before the order, and any state forms.
- If references or acquaintances will be interviewed by the screening company, the investigative report notice went out within three days.
- The report is seen only by the people who decide.
- Before any decision based on the report: pre-adverse action notice, report copy and summary of rights sent, with the date.
- The waiting period ran (at least five business days where required), and any response was reviewed by the decision maker.
- Criminal history was assessed against the duties of the job, in writing.
- If the decision stands: adverse action notice sent, with the screening company's details and the 60-day and dispute rights.
- Reports and notices kept with the hiring record, then disposed of securely. The FTC's guide points to keeping personnel and employment records for one year under EEOC rules and securely destroying reports when you dispose of them.
Questions people ask
Can the FCRA disclosure be part of the job application?
No. The statute requires the disclosure in a document that consists solely of the disclosure, and the FTC describes this as a stand-alone format. The written authorization may be on the same document, but other terms such as liability waivers or at-will statements should not be.
How long do I have to wait between the pre-adverse action notice and the final decision?
The federal statute does not set a number of days. It requires the notice and report before the adverse action, which means the candidate needs a real chance to respond. Five business days is common practice, and some state and city laws, including California's and New York City's fair chance rules, set at least five business days.
Does the FCRA apply if we check references ourselves?
Generally not, because the FCRA covers reports from consumer reporting agencies. A reference check you do yourself is not a consumer report. If you pay a third party to call references or interview people who know the candidate, that can be an investigative consumer report with its own disclosure rules.
Who sends the adverse action notices when a staffing agency places the candidate?
Whoever procures the report and whoever takes the adverse action based on it have obligations, and on an agency placement those can be different companies. Settle in the client contract who orders the report, who decides, and who sends each notice, and confirm the arrangement with counsel.