The most important thing to understand about motor vehicle reports (MVRs) is that they are consumer reports regulated by the Fair Credit Reporting Act (FCRA). As a result, you as an employer have a number of very specific responsibilities when it comes to obtaining and using MVRs. The FCRA was enacted in order to protect consumers from being denied employment or promotions unjustly because of inaccurate or unknown information uncovered in a consumer report. The following are a few things you need to know about how compliance with FCRA guidelines relates to MVRs:
Who Can Prepare MVRs
Consumer reports such as MVRs contain information pertaining to an individual’s reputation, character, and lifestyle. These reports are considered to be highly personal, which explains the need for careful regulation. To be compliant, your MVRs need to be prepared by a certified consumer reporting agency (CRA).
Notices and Disclosures
Before you request a consumer report for hiring purposes, including MVRs, you must disclose this to the applicant and receive their written authorization before making the request. Disclosures must be clearly written and stand alone outside any other applications or paperwork.
If you decide to use information obtained in a consumer report, including MVRs, to make any type of adverse hiring decision, the FCRA outlines specific adverse action procedures. Adverse actions include decisions such as denying an application, terminating employment, or withholding a promotion. Adverse action procedures are as follows:
- Step 1: Pre-adverse action notice
Provide the applicant with a written pre-adverse action notice that outlines your findings, why they are disqualifying, a copy of the report, a summary of their FCRA rights, and information about how to make corrections of disputes. You also need to give the applicant sufficient and reasonable time to respond.
- Step 2: Adverse action notice
This notice should include information about the adverse action taken plus information about the CRA that compiled the report as well as the individual’s rights concerning the information in the report.
If you wish to obtain an MVR on a potential or current employee, you may do so if you provide the requisite disclosures and receive written consent. If you decide to deny employment, you must take the adverse actions proscribed by FCRA guidelines governing the use of consumer reports. If any information in the consumer report contributes to an adverse employment decision, regardless of how significant the information is or any other contributing factors, adverse action disclosure procedures must be followed. Individuals are entitled to seek legal recourse against employers who fail to comply.