By Nicholas M. Auletta, CPP

When a background screen on a job applicant turns up negative, many hiring managers believe that they don’t have to send out a formal notice apprising the applicant of the reasons for their decision not to move forward—that they can just toss the resume in the trash and move on to the next candidate.

Unfortunately, the truth is much more complicated, and failure to understand your responsibilities could prove costly for your organization. Under the federal Fair Credit Reporting Act, employers who base their decision not to hire a candidate on any information revealed in whole or in part in background screens conducted by a third-party Consumer Reporting Agency—that is, a third-party background screening service provider—are required by law to send adverse action letters to the applicant.

To comply fully with the FCRA, an employer should send both the pre-adverse action letter and the adverse action letter.

In the event that background screens identify something in a candidate’s background that is unacceptable to the employer—a criminal conviction, bankruptcy, or inclusion in a sex offender registry or government watchlist, for example—then the employer should send a pre-adverse action letter.

The purpose of the pre-adverse action letter is to give the applicant notice of a negative finding and allow him or her time to dispute any inaccurate information contained in the report or provide an explanation that might be satisfactory to the employer. Once the pre-adverse action letter has been sent, a reasonable period of time should be allotted for the candidate to respond before the employer moves to the next step, the adverse action letter. The FCRA does not define exactly what constitutes a reasonable time period between pre-adverse and adverse action letters but it should be long enough for the candidate to respond; industry best practices indicate a week to 10 days. Although pre-adverse notifications can be provided in non-written form, written notices will provide better documentation should the matter ever be litigated. It is now acceptable to send the notification via email. However, if sent electronically, a good process ensures an audit trail to confirm receipt of the pre-adverse notification.

If the candidate does not dispute the negative information within a reasonable amount of time, the employer is required to send an adverse action letter. The adverse action letter must outline the reason for why employment consideration has been terminated, citing the background screening report, the name of the report’s preparer, and their contact information. The letter should include a statement that the background screening provider did not participate in the decision not to hire the candidate and only supplied the background screening report. The letter should also include notice of the candidate’s right to dispute the report’s findings and advise the candidate that they are entitled to receive a free background report from the background screening provider within 60 days of the letter.

While sending pre-adverse and adverse action letters may seem like unnecessary steps to some hiring managers, the letters provide evidence of compliance with the FCRA, which will prove helpful should a rejected candidate pursue the matter in court. A tighter labor market has increased the risk of rejected job candidates filing lawsuits against employers.

TruView’s TRU365 platform has automated the Pre-Adverse and Adverse Action delivery process through electronic notices. Clients have the ability to use TruView’s Best Practices Pre-Adverse or Adverse Action notices, upon approval, or upload their own forms to TruView’s platform. Further, to ensure security and compliance, the electronic notice requires the applicant to confirm receipt (via applicant-specific identifiers) and captures IP address and date-and-time stamp when read. For users that prefer a hard copy notice, the applicant can decline the electronic notice and TruView’s platform automatically creates an entry in the platform’s queue for the Client and/or TruView to send out the manual notice and track its completion.

To find out more about how TruView can assist your Pre-Adverse and Adverse Action process, please contact you Team Leader or leave a message for us on our Contact page.

Nicholas M. Auletta is President and Owner of TruView BSI, LLC. He actively administers to TruView’s operations and services for over 750 Clients. Nick’s successful business experience includes over 12 years in strategic leadership positions in the security, background screening, and investigative services industries, and he is active in the Long Island business community. Nick is a graduate of the United States Military Academy at West Point. A former Captain in the United States Army, he served as an Active Duty U.S. Army Infantry Officer, earning Airborne, Ranger, and Combat Infantryman qualifications, with military experience that included three tours and 44 months of deployed time to the Iraq combat zone. Nick is a Certified Protection Professional (CPP) designation and serves on New York State Governor’s Security Guard Advisory Panel. 

 Disclaimer: TruView BSI, LLC, is not a law firm and does not render legal opinions or advice. The above information, which outlines the federal requirements pertaining to adverse action, is not intended to constitute legal advice and should not be considered as such. Adverse action requirements may vary from state to state and before any policies or procedures are implemented legal counsel should be consulted. Additional information about the use of background check reports can be found on the Federal Trade Commission website.

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