Employment Background Check Adverse Action

Employment Background Check Adverse Action

As an employer, navigating employment laws can be a tricky endeavor. Compliance with the Fair Credit Reporting Act adds to the headache inducing, pain staking chances of making mistakes that opens your company up to litigation. The FCRA has specific guidelines that must be followed when you are considering not hiring an applicant called Adverse Action that applies when you have utilized an employment background check company. Adverse Action is defined by the FCRA as “A denial of employment or any other decision for employment purposes based in whole or in part on a consumer report that adversely affects any current or prospective employee.” -FCRA §603(k)(1)(B)(ii) and FCRA §615. Adverse Action not being properly followed is the top reason for class action lawsuits for FCRA violations.

So how do you keep your company out of the cross hairs for this type of litigation? Follow these simple steps:

If you think you might not hire the candidate:

• Send the candidate a letter (the pre-adverse notice) that explains that the background check results are under review and a decision is pending
• Include a copy of the candidate’s background check results
• Include a copy of “A Summary of Your Rights Under The Fair Credit Reporting Act”
• Keep a copy of the letter and attachments, and document the date sent. (send by certified mail if you’re sending the notices yourself)
• Consider sending by certified mail if you’re sending the notices yourself
• Wait no less than five (5) business days before taking any additional actions so the candidate has time to dispute inaccuracies.

If you decide to not hire:

• Send a denial of employment adverse action letter to the applicant informing them of decision, and that the decision was based on, at least in part, of the background check results.
• Include the name, address, and phone number for the CRA that performed the background check and a statement explaining the CRA wasn’t the decision maker and can’t explain why adverse action was taken.
• Inform the job candidate of the right to request a free copy of the background check within 60 days and the right to dispute inaccurate information.
• Keep a copy of the letter and attachments, and document the date sent (send by certified mail if sending them yourself)

Adverse Action Sample Letters

You are able to view and print the pre-adverse and adverse action letters by logging into your Instascreen account.

InstaScreen Intructions:

• Select the applicant you would like to send the adverse action letter to.
• On the reports results page scroll down to the “Disclosures and Forms” section and use the drop down box to select the appropriate document.
• Your choices at that time are to view, print, or email to applicant.

You can also download sample forms by clicking on the links below:

• Employment Pre-Adverse Action Letter
• Employment Adverse Action Letter
• Employment Rescind Offer

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