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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.

Adverse Action Process

Let's review the Adverse Action Process and see how CIC can help you streamline and organize the process.

When a corporation takes adverse action during the recruiting process, it signifies that they are considering not employing the applicant or that they may withdraw an offer. Most of the time, this is based on a negative report from a consumer report or from a background check.

What is Adverse Action?

A background check is completed for employment-related purposes. The report is examined, for material that may have a detrimental effect on the hiring decision.

If the employer finds information that is not acceptable within their current standards or employment handbook the employer must follow a certain process. This process is outlined by the Fair Credit Reporting Act and must be followed in order to remain compliant and avoid liability under the law.

Protect Your Company from Lawsuits

As CIC has often stated throughout the years, it is critical to use the Adverse Action process when denying employment based on the results of a background check report. It is critical that you not only use it, but that you do so appropriately.

The number of lawsuits filed against employers has increased at an alarming rate in recent years, despite the fact that the solution is so simple: use the Adverse Action process and follow the procedures outlined in the Fair Credit Reporting Act.

If a class action lawsuit is filed against you for failing to precisely adhere to the FCRA, the consequences can be severe. Cases have been brought and won on the basis of not following the process at all, omitting one of the steps, or using an outdated copy of the FCRA Summary of Rights. These cases have cost employers millions of dollars.

Download the Guide

In order to be compliant with the FCRA, there are some simple steps that an employer must follow when denying employment based, either in whole or in part, on information reported in a background check.

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Follow The Adverse Action Process Using CIC's Employment Screening System

In addition to streamlining the pre-employment background process CIC also offers a streamlined Adverse Action Process as a courtesy to our clients. The employer must provide the applicant with the appropriate letter, a copy of the report and a copy of the FCRA rights for both Pre-Adverse Action and Adverse Action.

All the required information is obtained with a simple click of a button that is located directly within our employment screening platform.

Once the appropriate letter is selected the applicant’s information as well as CIC’s information will prepopulate into the letter that must be given to the applicant.

A copy of the applicant’s report is also easily accessed with the click of a button within the same employment screening platform.

All of our background check reports include a copy of the most recent FCRA Summary of Rights and Credit Freeze, that can be found on the FCRA website.

Please treat the Adverse Action process with respect and exercise caution when refusing employment based on a background check report resulting from an investigation.

For more information, check out these articles:

Adverse Action: Understanding the Process

FCRA and the Adverse Action Process

Questions? Schedule a consult to learn more and discover an easy way to manage a compliant process using CIC's employment screening system.

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For more information about this article, or general Employment Screening Services, please contact us at 1.800.573.2201 / 419.874.2201.

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