Whenever a negative report comes in it can stir a lot of mixed feelings, especially if the information in that report makes you consider not hiring. Before you decide, before you contact the candidate, before you tell your hiring manager to give them a call and definitely before you draft a rejection letter you need to stop.
The process deciding not to hire a candidate based on a background check report is known as adverse action. To avoid lawsuits and protect both your company and the potential hire you need to follow the adverse action procedure to notify, allow time, and only after that make a decision on whether or not to reject this candidate.
Our recent client survey showed that while most of our clients know what adverse action is they are not 100% confident in the steps needed to fulfill the FCRA requirements and keep them compliant. In this post, we will introduce you to the reasons for adverse action procedures, the steps themselves and the resources on our site that go more in depth. It’s important to remember that adverse action protects the candidate and the employer and that the steps are mandatory under the FCRA meaning not following them can cost you big.
Why do we need adverse action procedures?
Employee background checking involves a degree of uncertainty, whenever we search criminal records for instance there are thousands of people with the same or similar names, many even with the same date of birth. Errors in the record departments, or within the legal entities that create the records can sometimes cause a negative report. As a background check company HireSafe can only research and report the records that match what a candidate has submitted. We match numerous identifiers to ensure the records we find are highly accurate but on rare occasion errors in the record keeping institution or elsewhere can cause mistakes. Other free and low-cost background check companies don’t do this due diligence and using their services is in violation of the FCRA an upcoming supreme court decision may decide the legality of those services even existing.
Treat an original negative report as if it may be a mistake.
No matter how remote the possibility of those errors and mistakes with checks we conduct they can happen. Due to this it is important to make sure any candidate has the chance to review and challenge any mistakes or errors in their report. Under federal law you as an employer need to treat that report as if the negative items in it may be a mistake and take steps to advise your candidate that there was a negative report giving them time to challenge the information by contacting HireSafe provided before making a decision.
Step 1 – Pre-Adverse Action
With the fact that you are legally obligated to withhold judgement in mind the first step in adverse action is just to notify the applicant using a pre-adverse action notice. This allows them to review the report and If the information is incorrect they can dispute the report by contacting us. It’s important that you direct any questions they have about the report to the credit reporting agency, in this case HireSafe. Any discussion of the record with your potential hire could be problematic in the eyes of the FCRA. The HireSafe portal and QuickAppTM provides simple electronic pre-adverse action notices but our adverse action compliance page goes into more detail on what’s required for these notices.
Step 2 – Final Adverse Action
Before you make the final decision, it is important to allow the candidate time to dispute the report. If there are items they have requested HireSafe consider it will take time to conduct an in-depth analysis of the record and will involve following up with the agency that holds the record which can take additional time. Once they have been giving ample time, and no challenge has been submitted it is time to make the final adverse action decision. Our online portal provides several final adverse action notifications if you decide not to hire the applicant. If not its time for onboarding!
Adverse Action Resources
Using the HireSafe Electronic portal
Legal disclaimer: we are not attorneys and this information is provided based upon the Fair Credit Reporting Act and our experience as a consumer reporting agency. Clients are advised to consult with counsel to create their own policies and procedures with regards to hiring suitability.