Is an employer allowed to use an investigative consumer report for employment decisions?

Is an employer allowed to use an investigative consumer report for employment decisions?

• A. Yes, with proper disclosures
• B. No, it is illegal
• C. Only for certain positions
• D. Yes, but only if requested by the employee

Answer: (A)

An employer is indeed allowed to use an investigative consumer report for employment decisions, provided that they follow specific legal guidelines set forth under the Fair Credit Reporting Act (FCRA). This includes making the proper disclosures to the employee or applicant before obtaining the report. These disclosures must inform the individual that an investigative consumer report may be obtained, including the nature and scope of the report, and they must obtain the individual’s consent. Additionally, the employer must ensure that the report is being used for permissible purposes, such as evaluating a candidate for employment. After obtaining the report, if the employer intends to make an employment decision based on the information contained within it, the employer must also follow up with a notice to the individual in the event of an adverse action taken, such as denial of employment. The other options do not accurately reflect the requirements and conditions outlined by the FCRA for the use of investigative consumer reports in employment decisions.

An employer is indeed allowed to use an investigative consumer report for employment decisions, provided that they follow specific legal guidelines set forth under the Fair Credit Reporting Act (FCRA). This includes making the proper disclosures to the employee or applicant before obtaining the report.

These disclosures must inform the individual that an investigative consumer report may be obtained, including the nature and scope of the report, and they must obtain the individual’s consent. Additionally, the employer must ensure that the report is being used for permissible purposes, such as evaluating a candidate for employment. After obtaining the report, if the employer intends to make an employment decision based on the information contained within it, the employer must also follow up with a notice to the individual in the event of an adverse action taken, such as denial of employment.

The other options do not accurately reflect the requirements and conditions outlined by the FCRA for the use of investigative consumer reports in employment decisions.