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California Assembly Bill 655 amends civil code.

Among the many new laws passed in California for 2002 was a new law designed to protect privacy and guard against identity theft. One of the changes directly affects all employers who conduct pre-employment screening or reference checks. All California employers are now required to provide a copy of any background report directly to the applicant--regardless of whether an employer uses a professional firm or does a background or reference checks in-house.

What does the new law require? Bill AB655 amends the California Civil Code. The law imposes the following new requirements on employers effective immediately:

1. New language must be placed on the cover page of every report for any employer who operates in California or hires California applicants.

2. Any employer who does any type of background screening must give a copy of the report to the applicant. The law requires that a copy be given at the time of a meeting between the employer and applicant (if the report is ready), or within seven (7) days of receiving a report, whichever is soonest. It also restates requirements that are already mandated by federal law.

Why was the new law passed? According to the California legislature, the purpose of the new law is as follows:

"Because notice of identify theft is critical before the victim can take steps to stop and prosecute this crime, consumers are best protected if they are automatically given copies of any investigative consumer reports made on them."

What if we do checks in-house? The new law also makes it very clear that this requirement also applies to employers who conduct checks in-house. If an employer does their own references checks, then it appears that the results must be conveyed to an applicant.

What is the practical impact? As a practical matter, the primary difference for employers is that now California requires that an employer supply a copy of the report to the applicant. Before the law was changed, the report was available to any applicant who asked for a copy, or where the applicant was the subject of an intended adverse action. The law just goes one step further and requires the employer to routinely supply it to everyone. In talking to some employers about the change, the feeling is that the change is a minor inconvenience that adds one more thing to do, but not a major change. Section 1786.50 provides for fines and damages in the event an employer not complying with this section harms a consumer. Section 1786.16 refers to certain requirements already in existence, such as obtaining releases.

Selection Management Suggestion

1. Selection Management has devised a new FCRA Inquiry Release form to suffice the terms in the first part of the background screening process. This new release is designed to be the initial contact to an applicant that a background screen will be processed on them in complying with company hiring procedures. The new FCRA Inquiry Release can be found on the Insights web site or call our customer service department to receive one.

2. Ensure each candidate that is background-screened gets sent a copy of the report. Insights will be offering the service of mailing the request for you for an additional $1 per report.

3. Do not take this change lightly. Non-compliance carries a $25,000 minimum price tag.

4. To change your account to a mail out, contact our customer service department today.

Effective February 4, 2002 Insights customers will be receiving cover sheets for each report in 16 point font with the following information contained on it:

As set forth in the amended California Civil Code Section 1786.29 USA-FACT, an Investigative Consumer Reporting Agency, shall provide the following notices as required by law:

This report does not guarantee the accuracy or truthfulness of the information as to the subject of the investigation, but only that it is accurately copied from public records. Evidence of identity theft may or may not be identified from this report.

The recipient of this report shall give a copy of this report to the subject of the report. Failure to provide a copy of the report as required by law may expose you to liability as specified in Section 1786.50.