New Credit Law Applies to Employee Investigations

Under the newly enacted Fair and Accurate Credit Transactions Act employers can hire third-parties, including legal counsel, to investigate current employees for suspected misconduct relating to employment, compliance with federal, state and local laws or violations of employer policies without advance notice or permission from the employee.  However, if the employer decides to take adverse action based in whole or in part on the investigator's report, the employer must provide a summary containing the nature and substance of the report to the affected individual.  This law amends the Fair Credit Reporting Act which required advance notice of the investigation, permission from the employee to conduct the investigation and an opportunity for the employee to receive a copy of the entire report.  Upcoming EANJ manual revisions will be issued shortly detailing the changes.