Background Checks & Adverse Action: Are You Compliant?

Many companies run background checks before hiring a qualified candidate to ensure they hire an employee with the necessary experience and a clean record. However, some candidate’s records are not clean and you may be unwilling to hire them due to the results of their background check. Is your company liable to do anything at this point? We’ll go through some steps you can take to ensure your company is compliant and avoid costly penalties.

Pre-Adverse Action

You must notify the applicant, in writing, if you are not willing to hire them due to criminal or other unwarranted behavior that shows on the background check results. The employer must provide the following information within 3 days of receiving the background check report:

You must wait until after the pre-adverse action notice has been issued before taking adverse action, although the FCRA does not state how long that should be. Per the FTC, five business days is considered a reasonable amount of time to dispute the records.

Disputing the Records

The applicant can choose to dispute the records with the reporting agency. If they do, the reporting agency will contact the employer of the dispute. An investigation will be completed by the reporting agency to determine if the records indeed belong to the applicant or not. They will notify the employer if any records have changed or been deleted or if information originally given is completely correct.

Adverse Action

If the applicant does not dispute the records or if the reporting agency notifies no changes have been found, the employer must send, in writing, an adverse action notice. This notice should include:

  • Notification that the employer is denying employment due in whole part to information found in the background report
  • Name, address, and phone number of the reporting agency
  • Notice stating the reporting agency did not make the decision for adverse action and will be unable to explain why
  • Notice of the applicants rights to 2nd copy of their report, free of charge, from the reporting agency within 60 days

Sheakley HR Solutions to the Rescue

This is where a PEO or HR Outsourcing company like Sheakley can be very helpful to your business. The Sheakley HR team can handle the whole process for you! Sheakley can run the background checks and send pre-adverse and adverse action letters for you so you can focus on the business of your business, rather than the business of employment.

By | 2017-05-09T12:46:09+00:00 May 9th, 2017|Human Resources, Industry Insights|0 Comments