Academy/Procurement, Bids & Contracts
Background checks
What has to happen before anyone pulls a report on an applicant, employee, or vendor's crew.
Before an association or its screening vendor pulls a background check on a job applicant or employee, federal law requires a stand-alone written disclosure and that person's signed authorization, separate from the application itself. Whether that same rule covers a contractor or vendor's crew is unsettled; get counsel's sign-off before running a check on anyone who is not an employee.
What federal law actually requires
The Fair Credit Reporting Act sets the baseline whenever a background check counts as a consumer report pulled for employment purposes. The FTC's guidance for job applicants and employees describes a two-step process before that report is requested: a written disclosure telling the person a report may be used in an employment decision, and their written permission to run it.
Both pieces have to be given before the report is requested, and the disclosure has to stand on its own. Folding it into page nine of a new-hire packet, or treating a signed job application as consent, does not satisfy it. The document exists so the person actually sees and understands what they are agreeing to, separate from everything else they are signing that day.
Employees are covered. Contractors are a gray area
The FTC guidance located here addresses consumer reports requested for employment purposes, meaning applicants and employees. Whether that same disclosure and authorization framework applies the same way to an independent contractor, a contractor's own employees, or a vendor's crew is not established, and any state-level background check statute layered on top varies too. Do not assume "they are not our employee" means no consent is required.
If your board is screening a vendor's workers as part of due diligence, treat the disclosure and authorization language as something to get signed off by counsel before you use it, not something to copy from the employee version. See vendor due diligence for the rest of that check.
What happens after the report comes back
The consent process is not the end of it. FTC guidance also describes rights that attach before and after an adverse action based on the report, including the person's right to review the report for accuracy before the association relies on it. A board that receives a report and moves straight to a decision, without giving the person a chance to weigh in on what it says, has skipped a step the framework expects.
Keep the signed disclosure and authorization on file for as long as you would keep any other vendor or personnel record. It is the document that shows the process was followed if the decision is ever questioned.
Check yourself
Answer before you read the explanation, recalling it is what makes it stick.
The board wants to screen a new landscaping crew before they start work on common areas. What should happen before anyone requests a report?
A management company adds the background check authorization as a checkbox on page nine of the new-hire packet, along with nine other policies. What's the problem?
A board member argues the association can skip written authorization for an independent contractor's background check because contractors are not employees. What's the flaw?
Sources
- Background Checks: What Job Applicants and Employees Should Know, Federal Trade Commission
Procurement, Bids & Contracts
Screening a vendor's crew instead of an employee? Start with vendor due diligence for the rest of the checklist.
Whether the disclosure and authorization requirement described here applies the same way to a contractor or a vendor's crew, rather than just employees, is not settled by this guidance, and any state background check statute on top of it varies.