Order the report through a consumer reporting agency, give the candidate a written disclosure on its own piece of paper that says nothing else, get her signed authorization before you order, and if anything in the report might cost her the placement, send a pre adverse action notice with a copy of the report and the federal Summary of Your Rights, wait a reasonable period, then send a final adverse action notice. That is the Fair Credit Reporting Act sequence in one breath.
The part that trips up agency owners is not the sequence. It is the assumption that the FCRA applies only to the family, or only to credit reports. It applies to you, the agency, whenever you procure a background report about a candidate for employment purposes from a third party screening company. Criminal records, employment verification, education verification, and driving history all count. The word "credit" in the statute's name is misleading.
It also has teeth. The disclosure and authorization defects are the ones that generate class actions, because they are visible on the face of a form and repeat across every candidate you ever screened. Below is the sequence, the document design that keeps you out of trouble, and the state overlays that go further than federal law.
When a background report becomes a consumer report under the FCRA
Two conditions have to be true. First, a third party assembles or evaluates the information. Second, you are using it to decide about employment, which the statute reads broadly enough to cover screening a candidate you will present to a family, and to cover contractor engagements as well as employees.
So a criminal history search you buy from a screening vendor is a consumer report. A driving record the vendor pulls is a consumer report. An employment verification the vendor performs is a consumer report. If the vendor conducts reference interviews and writes up what former employers said about the candidate's character or conduct, that is an investigative consumer report, and it carries an extra disclosure duty: you must tell the candidate in writing within three days that such a report may be requested, and tell her the nature and scope if she asks.
What is not a consumer report: a Google search you run yourself, a state sex offender registry search you perform directly on the public site, a reference call you place yourself. Those escape the FCRA. They do not escape discrimination law or state law, which is a separate problem covered further down.
Keep reading: Should I place nannies as household employees or can a family treat them as contractors?
The standalone disclosure and written authorization requirement
The disclosure must be a clear and conspicuous document consisting solely of the disclosure. Solely is doing real work in that sentence. The document may not carry a liability waiver, a release of claims, an at will statement, a certification that everything on the application is true, a state law notice bundled in, or your agency's marketing.
Practical rules that follow from that:
- One page, one purpose. The disclosure lives on its own sheet, or its own screen in your applicant flow with nothing else on it.
- Authorization can sit on the same page, which the statute permits, but nothing else should.
- No release language. Do not ask the candidate to release you or the screening company from liability inside the disclosure.
- Get the signature before you order, not on the same day, not after. Timestamp it.
- Certify to your vendor that you made the disclosure, obtained authorization, will comply with adverse action, and will not use the information in violation of equal opportunity law. Your vendor will require this and it is your obligation, not a formality.
Where boutique agencies commonly slip
The single most frequent defect is a combined application and authorization page. The second is reusing a stale authorization from a prior year. If you plan to rescreen a candidate you placed in 2024 before presenting her to a new family in 2026, either take a fresh authorization or include, in the original disclosure, a clear statement that the authorization is evergreen for future reports during the relationship. The evergreen approach is used, and it is also litigated. Fresh authorization per search is the conservative call and it costs you one email.
What a consumer reporting agency can report and the age limits on records
The FCRA restricts what a reporting agency may include. Civil suits, civil judgments, arrest records that did not result in conviction, paid tax liens, and accounts placed for collection are generally reportable for seven years. Bankruptcies are reportable for ten. Convictions are the notable exception: federal law places no time limit on reporting criminal convictions.
Then comes the salary exception. Those seven and ten year limits do not apply when the position's annual salary is $75,000 or more. Household staffing crosses that line more often than people expect once you count guaranteed overtime on a 50 hour live in role. Do not treat the exception as a license, because state law frequently overrides it.
Several states cap non conviction and older conviction reporting more tightly than the federal rule, and some cap it regardless of salary. Ask your vendor which state rule set they apply to a given search and keep their answer on file.
Keep reading: How should I structure a nanny replacement guarantee so it does not eat my margin?
The two step adverse action process and the waiting period
This is the section to laminate. It applies whenever information in the report contributes to a decision that disadvantages the candidate: not presenting her to a family, removing her from your roster, or withdrawing a placement.
- Pre adverse action notice. Send the candidate a notice that you are considering an adverse decision, a complete copy of the consumer report you relied on, and the Consumer Financial Protection Bureau's Summary of Your Rights Under the Fair Credit Reporting Act. Do this before you make the decision final.
- Wait. The statute says a reasonable period. Five business days is the widely used practice; some agencies use seven. Pick one, write it into your procedure, and apply it to everybody.
- Handle the dispute if one arrives. The candidate disputes with the reporting agency, not with you. If she comes back with a corrected report, start your evaluation over on the corrected facts.
- Final adverse action notice. If you proceed, send written notice naming the reporting agency with its address and toll free number, stating that the agency did not make the decision and cannot explain it, and telling her she may obtain a free copy of her report within 60 days and dispute its accuracy.
One nuance specific to your business. If the family, not you, makes the decision, the family is the user taking adverse action and owes the notices. In practice the family will not do it. Decide in advance who runs the process, write it into your agreement with the family, and be the one who actually sends the letters if you want the risk controlled.
State and city rules that go further, including ban the box
Federal law is the floor. Dozens of states and cities restrict when you may ask about criminal history at all, and several require a written individualized assessment before you may reject on a record.
The common shape of a fair chance ordinance: no criminal history question on the initial application, no background check until after a conditional offer, and, if you intend to reject, a written analysis weighing the nature and gravity of the offense, the time elapsed, and the relationship between the offense and the duties of the job. California, New York City, Illinois, and Massachusetts each impose versions of this, with different timing and different notice content.
For a nanny agency the individualized assessment is usually straightforward to write and worth writing anyway. A conviction for child endangerment sits directly on the duties. A ten year old possession charge does not, and a written assessment forces you to say so rather than quietly declining to present her.
Some states also require you to hand the candidate a state specific rights notice alongside the federal summary, and a few require you to give her a free copy of the report whether or not you take adverse action.
See how NannyMatchDesk handles this for nanny and household staffing agencies
Motor vehicle records, registries, and searches you run yourself
A driving record ordered through your screening vendor is a consumer report and runs through the full sequence. A driving record you obtain directly from a state motor vehicle department is governed by the Driver's Privacy Protection Act instead, which restricts permissible purposes and requires you to document yours.
Registry checks you perform yourself on public sites are outside the FCRA. Search the national and relevant state sex offender registries directly, and keep a dated printout of the result on the candidate file. Note that a registry search is an identity match on name and date of birth, not a fingerprint match, so treat a hit as a lead to verify rather than a finding.
Retention, storage, and disposal of the report once the placement closes
The FCRA's disposal rule requires reasonable measures to protect against unauthorized access when you dispose of consumer report information: shredding paper, wiping or destroying electronic media, or using a vendor that does it.
Keep reports separate from the candidate's general file, restrict access to the people who make screening decisions, and set a retention period. Equal opportunity recordkeeping rules generally point to keeping employment records for at least one year from the action, and longer where state law or a pending claim requires it. Two years is a common compromise for staffing files.
Do not email the report to the family. If a family needs to see screening results, share a summary of what was verified and what cleared, and let the family run its own report through a vendor with its own disclosure and authorization if it wants the underlying detail.
Where to go from here
Audit one thing this week: pull your current disclosure form and confirm there is nothing on it but the disclosure. That single check removes the most common exposure in the whole process. Then write your waiting period, your assessment template, and your retention clock into a procedure everyone on your desk follows the same way.
NannyMatchDesk keeps the screening steps on the candidate record in order, with the authorization date, the vendor, the report status, the pre adverse action send date, and the response window visible together. When a family asks what was checked and when, the answer is on the file rather than in someone's memory.
