A Legal Must for Fair Hiring
If a background check reveals information that might lead you not to hire a candidate, you’re legally required to follow “adverse action” procedures under the Fair Credit Reporting Act (FCRA). Here’s a step-by-step guide to staying compliant and fair.
What Is Adverse Action?
Adverse action occurs when you take a negative employment decision (such as denial, suspension, or termination) based on information in a background check.
The Three-Step Process
- Pre-Adverse Action Notice: Before making a final decision, provide the candidate with a copy of the background check report and a written notice stating you may take adverse action. This gives them a chance to review and dispute any inaccuracies.
- Waiting Period: Give the candidate a reasonable time (typically 5–7 business days) to respond or provide additional information.
- Adverse Action Notice: If you proceed with the negative decision, send a final notice outlining your decision, the reason, and information about the reporting agency.
Why This Matters
- Legal Compliance: Failure to follow the process can lead to lawsuits and fines.
- Fairness: Sometimes background reports contain errors, this process gives candidates a fair chance to correct mistakes.
Tips for Employers
- Use clear, simple language in your notices.
- Apply your policy consistently to all candidates.
- Work with a screening provider who understands FCRA compliance.
Adverse action rules aren’t just red tape, they protect candidates and employers alike. By following the proper steps, you ensure a fair process for everyone and protect your company from legal risk.
Need Help with Background Checks or Compliance?
Whether you’re hiring new talent or updating your screening processes, the Swailes Background Check team is here to help. From criminal background checks and FCRA compliance to drug testing, employment and education verifications, MVR reports, credit history reviews, and Social Security number validation, we provide fast enrollment and expert support every step of the way.
Contact us today to streamline your screening process with confidence.