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For California Employers

California and Federal Law

California Law Amended with Requirements For Employment Reports Affects All Employers Who Research California Applicants

Effective January 1, 2002, every employee or applicant for employment must be provided with a copy of the investigative consumer report (see note*) if one is procured by the employer. Previously, employers were only required to provide a copy of the report when adverse action is taken based in whole or in part on the report.

Amended California Civil Code and subdivision (b) of 1786.16 now states:

"(b) Any person described in subdivision (d) of Section 1786.12 (refers to any employer) who requests an investigative consumer report regarding that consumer shall provide the consumer with a copy of the report and information on who issued the report and how to contact them, either at the time of the meeting or interview between the consumer and the person who requests an investigative consumer report regarding that consumer or within seven days of the date such person receives the report, whichever is earlier. "

Section 1786.16(a) requires in part:

"1786.16. (a) Any person described in subdivision (d) of Section 1786.12 shall not procure or cause to be prepared an investigative consumer report unless the following applicable conditions are met:

(2) If, at any time, an investigative consumer report is sought for employment purposes other than suspicion of wrongdoing by the subject of the investigation, the person procuring or causing the report to be made shall, not later than three days after the date on which the report was first requested, notify the consumer in writing that an investigative consumer report regarding the consumer's character, general reputation, personal characteristics, and mode of living will be made. This notification shall include the name and address of the investigative consumer reporting agency conducting the investigation, the nature and scope of the investigation requested, and a summary of the provisions of Section 1786.22."

Federal FCRA (Fair Credit Report in Act) and the California Civil Code differ in definition of investigative consumer report. The California ICR:

Section 1786.2 (c) "The term" investigative consumer report "means a consumer report in which information on a consumer's character, general reputation, personal characteristics, or mode of living is obtained through any means. "

*** All Employers Please Consult Your Legal Counsel ***

Attention California Employers
January 1, 2002 California Legislature's AB 655 amending both the California Consumer Reporting agencies Act and Investigative Consumer Reporting Agencies Act ("ICRA"). This bill changed a number of provisions affecting the provision of Investigative Consumer Reports for employment purposes.

We are recommending that in order to be in compliance with this legislation, our customers should follow these steps for every candidate with a current address in California for whom you request a background report:

  1. Send a notification letter.
  2. Send a copy of their consumer rights (CA Summary of Rights in English and Spanish)
  3. Send a copy of the complete background report to the subject within seven days of receipt of the completed report from Tiburon Enterprises.

The Applicants do not need to request the report copy; it must be provided automatically.

Points of Note

1. References: The new law clarifies that under Civil Code section 1786.53, in-house references obtained by an employer DO NOT have to be turned over to applicants. Under AB 1068, an employer would have to turn over any public records, such as criminal convictions that it found on its own, but not reference checks.

2. Providing Reports to Applicants: The law no longer requires employers to provide every background report to each applicant. Instead, each applicant will have the ability to check off a box on a disclosure sheet and have a background-screening firm send the report directly to the applicant. A similar rule already exists in California for credit reports.

3. Special Cover Sheet: The law revises the rules about a special cover sheet. A screening firm is allowed to post the required notice on the first page of the report instead.

4. Employee Investigations: There is also language in new section 1786.55 that clarifies that the new law is not intended to modify existing law concerning internal investigations of current employees suspected of misconduct or wrongdoing (except for obtaining public records), or employer reference checking. However, the federal FCRA still applies to investigations by third parties.

5. Limitations on “do-it-yourself” investigations: If an employer does their own investigation of an applicant or current employee without using the services of a background-screening provider and collects public records such as criminal records, there are new rules that are in effect. Any information must be turned over to the applicant/employee within seven days unless the employer suspects misconduct or wrongdoing in which case supplying the information may be delayed. In addition, an employer who uses this procedure must provide a form to all applicants/employees with a box that, if checked, permits a person to waive the right to receive the copy of any public record. If the investigation results in an adverse action, there are additional requirements as well. This procedure is only in effect if an employer does its own investigation.

6. Limitation on Criminal Record Searches: The new law retains the seven (7) year limitation on a background-screening firm obtaining criminal records. However, the new law clarifies that there is an exception for employers that are required by a governmental agency to go back further when checking qualifications. This addresses a conflict between California law and situations where certain employers are required to go back further in some cases.


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