Informational Adverse Action Checklist

When findings from a background check uncovers data potentially impacting a candidate’s suitability for hire, it’s crucial to exercise care and adhere to the legal protocols concerning adverse action. The Federal Fair Credit Reporting Act (FCRA) mandates a two-step procedure for employers prior to denying employment due to adverse background check results.

The Equal Employment Opportunity Commission (EEOC) has issued guidance to assist employers in reviewing information and preventing discrimination, even if unintended. The “nature-time-nature” test prompts you to consider;

  • The nature and severity of the offense
  • How long ago was the offense committed or the sentence completed?
  • How does this offense relate to the position in question?

The EEOC further recommends that employers thoroughly evaluate all aspects of each candidate through an individualized assessment, including their past history and rehabilitation status. This individualized assessment is not only a recommended practice in adverse action scenarios but is also legally mandated in certain jurisdictions. A recommended approach to constructing and documenting your individualized assessment could involve reaching out to the candidate to discuss the findings, providing them with a copy of the report, and outlining their rights to review.

The steps to take may look like this;

    1. Communicate with the candidate via telephone or in person to discuss the record(s) that are being considered adverse. This could potentially clear up the adverse situation and you may make the decision to proceed hiring the candidate. If not, at this time, you would send a pre-adverse action notice, formally notifying the candidate that an adverse employment decision may be made based the information discussef and include a copy of the background check report for the candidate to review and address possible inaccuracies. Be sure to explain and include a copy of their Summary of Rights under the FCRA, which informs the candidate of their right to dispute possible inaccuracies.
    2. If the candidate does not dispute their findings within a reasonable amount of time or the allotted days, or if their dispute doesn’t result in amendment or change, send the final notice of adverse action indicating that an adverse decision was made.
    3. Be sure to check the specific laws surrounding Pre-Adverse and Adverse Action in your state and local jurisdiction as there may be additional steps required.

Adverse Action DO’s:

  • Establish an adverse action policy outlining procedures for both initial and final adverse action notifications. (Pre-Adverse and Adverse Action)
  • Maintain clear communication with the candidate when information arises that could impact their potential employment with your company. Discuss the information found with the candidate.
  • Evaluate the severity and relevance of the disclosed offense in relation to the position applied for. ion found with the candidate.

  • Furnish the candidate with a pre-adverse action letter, a copy of the background report, and their Summary of Rights under the FCRA. Present attachments on separate pages from other materials in the pre-adverse notice.

  • Ensure that both pre-adverse and adverse action letters include contact information for the Consumer Reporting Agency, enabling candidates to dispute any inaccuracies or incompleteness in their reports.
  • Allow a reasonable timeframe between notices, typically ranging from five to seven days, although some jurisdictions may mandate longer periods.
  • Take into account any additional legal requirements, such as providing written notices specifying the charges, conducting individualized assessments, or adhering to special forms or procedures.

  • Include a statement clarifying that the background screening company does not make hiring decisions.

Adverse Action DONT’s:

  • Refrain from making a final hiring decision on a candidate before communicating with them, both verbally and in writing.

  • Avoid sending the final adverse action notice until a reasonable amount of time has elapsed, affording the applicant an opportunity to dispute in writing.

  • Ensure thorough documentation of all interactions and communications with the candidate regarding the adverse report.
  • Differentiate between pre-adverse and adverse action notifications mandated by the Federal FCRA and individualized assessment notices or other “Fair Chance” processes required by the Equal Employment Opportunity Commission (EEOC) or other applicable state, city, or county laws, as each may have distinct requirements.

Be sure to consult with your legal counsel and have them review your adverse action policy and notices/forms.
Periodic review is recommended to stay on top of state and local laws as well as the FCRA.
Please note that ProVerify is not a law firm. This publication is for informational purposes only.