Final answer:
The statement is false; the main federal law regulating how employers acquire and use background information is the Fair Credit Reporting Act, not the Privacy Act of 1974. Both state and federal regulations, including the FCRA, COPPA, and Gramm-Leach-Bliley Act, play important roles in the protection of personal cyber data and privacy.
Step-by-step explanation:
The statement that the Privacy Act is the main directive at the federal level that governs how employers acquire and use applicants' and employees' background information is false. The Privacy Act of 1974 is primarily focused on preventing the unauthorized disclosure of personal information held by the federal government. However, the Fair Credit Reporting Act (FCRA) of 1970 is more directly relevant to employers as it regulates the use of consumer report information, which can include credit information and background checks for employment purposes. Employers must obtain consent before seeking an applicant's or employee's credit report and must follow certain procedures if they decide not to hire or if adverse action is taken based on the content of the credit report.
Furthermore, state and federal laws offer protections of cyber data privacy ranging from financial to personal online information. Notably, the Children's Online Privacy Protection Act (COPPA) and the Financial Services Modernization Act of 1999, also known as the Gramm-Leach-Bliley Act, are key laws providing privacy safeguards. The European Union's General Data Protection Regulation (GDPR) represents even stronger protections for individuals' data privacy. These regulations illustrate a complex landscape where both government and private entities must navigate the safekeeping of individuals' personal information. Employers must be vigilant in complying with these regulations to ensure the privacy and protection of sensitive employee data.