Pre-Employment Screening Glossary

Background Screening Glossary for Employers

Adverse Action:

Before an employer makes an adverse hiring decision based on a consumer report or background check, the employer must provide the applicant with a copy of “A Summary of Your Rights Under the Fair Credit Reporting Act” and give the applicant an opportunity to explain or correct any negative information found. If the employer decides to move forward with the adverse decision, the employer must notify the applicant.

Authorization and Disclosure:

An employer must receive permission from applicants or employees before ordering a background check report. Authorization can be provided by the applicant through an electronic or handwritten signature.

Consumer Report:

A consumer report is the same as a background check and may verify employment, references, education, professional licenses, criminal history, credit history, and motor vehicle records.

Consumer Reporting Agency (CRA):

Also known as background screening company, CRAs are companies that compile information from multiple databases to help employers verify information pertaining to job applicants and employees.

Fair Credit Reporting Act (FCRA):

The FCRA is a federal law that regulates how consumer information is collected, used, and shared. To read the full act, click here.

Investigative Consumer Report:

This type of consumer report uses interviews with the applicant or employee’s acquaintances or former employers.

Permissible Purpose:

A background screening check must be used for a permissible purpose as defined in the FCRA. Employment screening is considered a permissible purpose.

Summary of Rights:

The FCRA requires that employers provide employees and job applicants with a summary of their rights under FCRA regulations.

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