An employer must comply with extensive notice, consent, and disclosure rules under the Fair Credit Reporting Act (FCRA), when an employer uses third parties to prepare certain background reports on employees or applicants.

California has its own mini-FCRA law that further restricts how an employer may use an applicant or employee’s credit history to make employment-related decisions. Cal. Lab. Code § 1024.5. Private sector employers can obtain consumer credit reports only for individuals who are applying for, or work in, one of the allowed positions. Contact us to find out more how whether your intended job position allows for background and credit checks.

Our firm’s series of employment law related pages addresses various employment and labor law issues that may arise when starting a start-up or expanding a business. It is meant to be a general guide, not a comprehensive list of key considerations. As many venture capital-financed start-ups are headquartered in California, this series of articles covers highlights of federal employment law and some specific to California employment law which tends to be more protective of employee rights than the law of other states. Related pages, if any, to this Article include those linked below.

What Questions Not to Ask When Interviewing Employees? (5 Minute Read)

Employment Agreement vs Employment Letter – When to Use Them (Coming Soon)

What are Restrictive Covenants? (Coming Soon)

Independent Contracts vs Employees? (Coming Soon)