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CIC offers news and updates to employers about the latest laws, trends and risks related to hiring, fraud, and drugs or violence in the workplace.

pre-employment screening fcra adverse action process

When using a consumer reporting agency to do your background checks, Federal law comes into play when you deny employment based “in whole or in part” on information reported in the background check. Much to their chagrin, many employers have found out the hard way just what non-compliance with the Adverse Action process costs. Law suits in this area are on the increase and so are the costs to employers who fail to follow a few simple steps ...

1. Review the completed background check and consider the report based upon:

■ The nature and gravity of the offense
■ The time that has passed since the offense, conduct and/or completion of the sentence
■ The nature of the job held or sought

2. If the initial review of the report is unfavorable and you intend to take adverse action, you must notify the candidate of that intent by sending the Pre-Adverse Action letter. This letter must contain specific information:

■ The intended Adverse Action (you aren’t going to hire or promote them or you are going to fire them)
■ The name and contact information for the background screening company (CRA) who provided the report
■ Explain that they have 5 business days to contact the CRA if they dispute the accuracy of the report
■ Include a copy of the report and the latest version of the FCRA Summary of Rights

3. If, after 5 days, the decision to deny employment has not changed, the employer must send out the final notice of Adverse Action stating, essentially, that employment or promotion has been denied. This letter must contain specific information, as well:

■ Must state the reason for the Adverse Action
■ Must include the CRA’s contact information
■ Must state that the CRA did not make the Employment decision
■ Must give notice of the candidate’s right to dispute the accuracy or completeness of the information in the report
■ Must give notice of the right to get an additional free report from the CRA, if requested, within 60 days
■ Additionally, CIC recommends providing a copy of the report with the Adverse letter as well as a copy of the FCRA Summary

These are easy steps to follow and they are made even easier by the capability that we offer our clients of generating the Adverse Action letters and accompanying documents directly from our screening system portal on our website.

Carolyn Klemett is the coordinator of our Pre-employment Screening Services at Corporate Intelligence Consultants. For more information about this article, the Adverse Action Process, or general Employment Screening Services, please contact Carolyn at 1.800.573.2201 / 419.874.2201.

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