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| Referencing and Verification Services | Transportation
June 12 2019

Are You Background Checking Your Contractors? If So, Exercise Caution

Although employers who use background checks in their hiring processes are likely aware of Fair Credit Reporting Act (FCRA) requirements regarding employees, the question remains whether employers should extend the same precautions to non-employees they engage for service.

The Federal Trade Commission recently re-emphasized this fact: Because the term “employment purposes” is interpreted liberally to effectuate the broad remedial purpose of the FCRA, it may apply to situations where an entity uses individuals who are not technically employees to perform duties.” District courts in Iowa, Ohio and Wisconsin have questioned the reasoning, however California courts remain persuaded by the FTC’s guidance.