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Answering all of your Fair Credit Reporting Act and adverse action FAQs

The Fair Credit Reporting Act (FCRA) guides the background check process for employers and offers privileges and rights to the candidates who undergo screenings. Following the FCRA is essential for any hiring team, especially when it comes to adverse action, which is the process of removing an applicant from consideration due to screening report results.

Complex and important aspects of the background check process, both the FCRA and adverse action can raise plenty of questions for employers. One Source’s team can guide you through the FCRA and answer any questions about adverse action. Below we have discussed some frequently asked questions.

How long do I have to wait to remove an applicant from consideration after I notify them of my intent to take adverse action?

Once you decide to take adverse action against an applicant, you must notify them of your decision and the specific parts of their report led to your choice. You must then put any further actions on hold to give the applicant the opportunity to dispute their report. Generally, you must wait five business days before sending a final notice. The waiting period can vary by state, though, so be sure to check with your background check agency.

What if a candidate declines to consent to a background check?

If screenings are one of your company’s requirements for employment, then refusal to participate in a screening would disqualify them. However, the FCRA does not apply to applicants who don’t want to be screened. By refusing a background check, they waive their FCRA rights. Therefore you can remove them from consideration without taking adverse action.

Do I have to follow adverse action with contractors and volunteers?

Yes. Contingent employees and volunteers are protected by the FCRA, so you must follow FCRA guidelines in order to remove them from your recruitment process. There are several functions to which FCRA applies, including contractors, and volunteers. 

What if the information we are basing adverse action on is vague?

Sometimes, a criminal record won’t provide much context to a charge, so you’ll have to take adverse action without a full understanding of how an applicant got a criminal record. That’s why it’s required to wait several business days before you can finalize adverse action. You leave space for an applicant to provide details about their charges or dispute their accuracy. Plus, this gives you time to consult your screening firm. They will help you decipher what the codes on a criminal record mean and explain how the record translates into actual crimes. You can then make a better judgement about whether or not to keep the applicant in consideration.

With the help of an expert screening partner like One Source, your team can navigate the FCRA with ease. Contact the One Source Client Relations team today to see how we can help you manage your hiring process.