News / Blog

What is the Fair Credit Reporting Act (FCRA)?

The FCRA is a federal law that regulates the use of credit and other background checks, including those obtained for hiring and employment purposes.

Does the law only apply to credit reports?

No. The FCRA is applicable to all “consumer reports” obtained by employers, defined as “any written, oral or other communication from any third party (such as a background search agency or employee screening company) that relates to any employee’s or applicant’s credit worthiness, standing or capacity, character, general reputation, personal characteristics, or mode of living.” For example, a criminal background report obtained by an employer from an outside agency or provider is covered by the FCRA.

What does the law require?

The law places strict requirements on employers who use consumer reports for hiring or employment purposes. These requirements include notifying employees and applicants when a report is sought, obtaining consent (in writing) from the employee or applicant, and advising employees or applicants of their right to contest an adverse report.

How must the notice/consent be provided and obtained?

An employer is required to provide the notice, and obtain the consent of employees and applicants, in a stand-alone document. This means that the disclosures and consent cannot be buried in another document, such as an employment application.

What liability can result from a violation of the FCRA?

An employer that violates the FCRA can be subjected to statutory damages ranging from $100 to $1,000 per violation, and also may be held liable for an employee or applicant’s actual losses and attorney’s fees. In cases involving willful violations of the law, punitive damages can also result.

Does an employee or applicant have to be fired or denied employment to bring a claim under the FCRA?

No. Technical violations of the law (such as the failure to provide a stand-alone notice) can result in liability even if there is no termination of employment or refusal to hire. Cases involving technical violations of this type are often litigated on a class action basis, and courts may award compensation to the representative plaintiffs for assisting in addressing violations fo this type.

Can employees bring a claim for “wrongful discharge” in Florida?
Generally, no. Florida is an “at-will” state, meaning that an employee can be discharged for good cause, bad cause, or no cause at all. As a result, even if an employer discharges an employee for an arbitrary or unfair reason, as long as that reason does not violate a specific statute (for example, discrimination, whistleblower), the decision does not give rise to any legal claim.

Under what circumstances are employees entitled to receive unemployment compensation?
There are two situations in which employees will be denied unemployment compensation: resignation and discharge for misconduct. An employee may resign and still recover benefits if the resignation is attributable to the employer (i.e. the employer makes a significant change to wages, hours or working conditions, thereby prompting the resignation). Poor performance alone does not constitute misconduct on the part of an employee. Rather, the employer must typically show that the employee willfully failed to perform his or her job, repeatedly failed to follow instructions, or deliberately acted in a manner contrary to the employer’s interests.

What is a “whistleblower”?
While the precise definition varies somewhat by statute, the term “whistleblower” generally refers to an employee who opposes, refuses to participate in, reports, or threatens to report an activity by the employer that violates a law, rule or regulation. Opposition to practices that are unethical, but do not violate any specific law, rule or regulation, generally does not trigger whistleblower protection.

What rights do whistleblowers have?
Several statutes protect whistleblowers from retaliation such as demotion, unwanted transfer, reprimands, and discharge.

Are there any other forms of retaliation that are prohibited?
Florida law protects employees from retaliation in a number of circumstances. For example, employers may not retaliate against employees for filing workers compensation claims, attending jury duty, responding to a subpoena to testify in court, or supporting a particular political party or candidate.

Who is a potential “whistleblower” under the False Claims Act?
A whistleblower under both federal and state False Claims Acts, also referred to as Qui Tam actions, are private individuals who are aware of fraud being committed against the Government. The whistleblower may become involved in litigation on behalf of the Government to recover the fraudulently obtained funds and potentially share in the recovery of such funds.

What laws provide rights to minimum wages and overtime compensation?
The federal Fair Labor Standards Act sets the federal minimum wage and provides nonexempt employees with the right to overtime compensation. The Florida Constitution likewise requires the payment of a minimum wage.

What is the minimum wage?
Currently the federal minimum wage is $7.25 per hour (or $2.13 per hour plus tips). The Florida Constitution provides for a higher minimum wage, currently set at $12.00 per hour (or $8.98 plus tips).

What is overtime compensation?
Nonexempt employees are entitled under the Fair Labor Standards Act to receive one and one-half times their regular rate of pay for all hours worked in excess of forty per work week.

What is an exempt employee?
The Fair Labor Standards Act provides that employees receiving certain types of compensation and performing certain types of job duties are not entitled to receive overtime compensation. Included among these exempt categories are certain executive, administrative and professional employees, as well as certain outside salespersons, commissioned retail salespersons and motor carriers.

Are employees required to first go to the Department of Labor if they wish to make a claim for unpaid wages or overtime compensation?
No. Unlike discrimination claims (which must typically be filed first with a government agency), wage recovery claims have no administrative prerequisite. While the Department of Labor’s Wage and Hour Division does have the power to investigate claims, an employee may go directly to court without first consulting the agency.

What damages are employees entitled to in a claim for unpaid wages or overtime compensation?
In addition to the unpaid minimum wages or overtime compensation, an employee can seek liquidated (double) damages, and is entitled to recover attorney’s fees if he or she prevails.

Can an employer retaliate against an employee for seeking unpaid minimum wages or overtime compensation?
No. The Fair Labor Standards Act and Florida Minimum Wage Amendment both prohibit retaliation against employees who assert their rights.

What if the employee does not have any record of the number of his or her hours worked?
It is the employer’s, not the employee’s, burden to keep accurate time records. If an employer fails to do so, employees can nonetheless bring a claim for unpaid minimum wages and overtime hours based upon reasonable estimates of their hours worked.

Are independent contractors entitled to minimum wages and overtime compensation?
True independent contractors are not entitled to minimum wages and overtime compensation. However, many workers are misclassified and are, in fact, employees rather than independent contractors. In determining under which category a worker falls, the nature of the relationship is more important than the intent, understanding or agreement of the parties.

What other types of unpaid wage claims can be brought?
An employee may bring an action to recover unpaid wages for any uncompensated hours worked, even if minimum wages and overtime compensation are not involved.

Are all employees with disabilities protected?
No. Long-term or permanent conditions that impact a “major life activity” (i.e. walking, breathing, seeing, hearing, speaking, learning or working) qualify as protected disabilities under federal (Americans with Disabilities Act) and Florida discrimination laws. Other chronic conditions, even if in a state of remission, may be covered as well. Employees who possess such a condition, but are otherwise qualified to perform the essential functions of their job (with or without a reasonable accommodation) are subject to legal protections. Similarly, employees who are not disabled, but are “regarded as” being disabled by their employer, or have a record of a prior disability, are protected from discrimination.

What is a reasonable accommodation?
Employers are required to make efforts to provide working environments and equipment, and to exercise flexibility in assigning work schedules and tasks, in order to accommodate employees with disabilities. Employers are not required to create new jobs, transfer a disabled employee’s co-worker, hire assistants, or do anything else that would result in an undue hardship, in order to accommodate disabled workers.

Are employees with disabilities entitled to “light duty” assignments?
Although the term “light duty” is commonly used in the workplace, the ADA does not legally define the term. Generally, “light duty” assignments involving the elimination of non-essential functions of a job would typically be required, while those involving the elimination or reassignment of essential functions would not.

Under what circumstances are employees entitled to leaves of absence?
The federal Family and Medical Leave Act (FMLA) requires covered employers to provide covered employees up to 12 weeks of unpaid leave per year. Covered employers are defined as those who employ 50 or more employees within a 75 mile radius. Covered employees are those who have been employed for at least one year and who have worked a minimum of 1250 hours in the previous 12 months. FMLA applies to serious health conditions involving either the employee or an immediate family member (parent, spouse or child) or the birth, adoption or foster care placement of a child.

What are the rights of employees who exercise their leave rights?
Employees on protected leave are generally entitled to maintain their benefits and to be reinstated to their previous job or an equivalent position upon the conclusion of their leave. Employers are not permitted to take any adverse action against employees who exercise their leave rights.

What types of employment contracts are enforceable?
Written agreements that (1) guarantee employment for a specified period of time, (2) limit the circumstances in which employment may be terminated, or (3) set forth a specific consequence for terminating employment (i.e. mandatory severance pay) are generally enforceable through breach of contract actions.

Are written agreements that only set forth the way an employee is to be paid enforceable?
Generally, agreements of this type (written pay plans) may only be enforced with respect to compensation owed for work already performed. Such agreements typically do not limit an employer’s ability to terminate the relationship, provided that all compensation owed to you is paid.

Should employees have severance agreements reviewed by an attorney?
Yes. Severance agreements typically contain a release of claims by the employee. Counsel may be helpful in ensuring that the employee is releasing only claims he or she intends to release, is not giving up any vested rights to compensation or benefits, and is receiving valuable consideration for all promises and covenants made.

Are employers permitted to require employees to sign a noncompete agreement?
Generally, employers are permitted to do so, and are not required to offer any additional compensation in exchange for signature on the agreement.

Are noncompete agreements enforceable?
Florida law does allow agreements of this type to be enforced in certain circumstances. Typically, the employer is required to show that the employee is competing by utilizing trade secrets, soliciting the employer’s clients or customers, infringing upon the good will of the employer or utilizing specialized training provided by the employer for the benefit of a competitor. Noncompete agreements also must have a reasonable geographic scope (the area(s) where the employer does business) and duration (generally two years or less).

Are all employers subject to discrimination and harassment laws?
No. Under federal discrimination statutes, an employer generally must employ at least fifteen employees. The same is currently true under Florida law. However, some municipalities have enacted ordinances with lower thresholds.

Are all employees of covered employers protected?
In essence, yes. There are a multitude of protected categories under the various statutes and ordinances that form the body of employment discrimination law. The most common are race, color, gender (including pregnancy), age, disability, national origin, religion and marital status. In some localities, other categories, such as sexual preference, have been recognized as protected. The law likewise protects those who are not members of these categories from “reverse discrimination.”

What discriminatory acts are prohibited by law?
Unlawful discrimination can take many forms. The most overt are failure to hire, disparate pay practices, failure to promote, harassment and termination. More subtle forms can also occur, at times resulting in a forced resignation or “constructive discharge.” Employers are also prohibited from retaliating against employees who oppose unlawful discrimination or who participate in the investigation of such claims.

When does harassment become actionable?
Employees often mistakenly presume that all forms of harassment are unlawful. However, the law only prohibits forms of harassment that relate to a protected status (i.e. sexual harassment, racial harassment). The law also requires a showing that the harassment is severe or pervasive. Employees must also demonstrate generally that the harassment either culminated in a “tangible detriment” (i.e. discharge) or that the employer failed to take reasonable measures to prevent and/or remedy the harassment.

How do I proceed with a discrimination or harassment claim?
Generally, employees must file a charge with a federal (Equal Employment Opportunity Commission), state (Florida Commission on Human Relations) or local agency. At the conclusion of the investigation, employees typically may proceed to court.

What types of damages are available for discrimination and harassment claims?
Employees can typically seek recovery of actual damages (i.e. back pay), compensatory damages (pain and suffering) and punitive damages. Attorneys’ fees and costs are also available to prevailing plaintiffs. Employees may also obtain “injunctive relief”, such as reinstatement, in appropriate circumstances.