The Adverse Action – Screening Potential Employees

by Joe Killinger
CEO, theRRD.com

“Adverse Action” is defined 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.

After receiving the results from background check, review it to see if the applicant meets your requirements. It is recommended that you give the applicant the opportunity to view the results, give him or her an opportunity to respond with mitigating information before making any adverse hiring decision based on the background check.  All employers, landlords, creditors, and insurers must give a copy of the document “A Summary of Your Rights Under the Fair Credit Reporting Act” before they are allowed to take any adverse actions against the applicant.

When taking an adverse actions, such as terminating employment, denying employment, denying credit or denying a renters application, you must provide notice to the applicant. The notice must contain the following information:

The company information that supplied the background report. This must include the name, address and the phone number.

A brief statement that shows the screening company did not make the adverse action decision and are unable to give the applicant any information on the decision made.

A statement making the applicant aware that they have the right to dispute the information in the report or receive a free copy of the report from the screening company as long as it is requested within 60 days.

Before you take any action on the results of a background screen in hiring, promoting, or suspending an employee, make sure you’re aware of the Adverse Action requirements mandated by the FCRA—the laws are very specific about how and when you must notify an applicant of an adverse decision you’ve made concerning the results of their background check.