Tag Archive for: adverse action

Understanding & Simplifying Adverse Action

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Background checks are part of every employer’s routine, from candidate screening to rescreens on employees, and along with these checks come important discoveries, too. Unfortunately, some of these discoveries call for adverse action, meaning an employment-related action that adversely or unfavorably affects a prospective or current employee. This blog covers some of the general steps employers should understand before they take adverse action on a candidate or employee.

Adverse Action Process

The adverse action process includes a series of letters informing a candidate or employee of their rights after they authorized procurement of a background report on them but before an employment decision has been made based on its content. In general, the first letter notifies the candidate or employee that an employment decision may be forthcoming based on the content of a background report; attached to this letter is a copy of the background report and a Summary of Your Rights under the Fair Credit Reporting Act (“FCRA”). The employer then waits for a set period of time to permit the candidate or employee to respond to the employer or dispute the accuracy of the background report with the consumer reporting agency, before final notice is sent is provided.

When taking adverse action on a candidate or employee, employers must comply with applicable laws including the FCRA and other state and local laws such as ban-the-box and fair chance laws. An employer who fails to comply with these laws could be held liable for actual damages, punitive damages, and other costs and fees.

The Benefits of Automation

All these steps can be a challenge to tackle alone or even with a robust team. Not only does it take time and energy to put the correct materials together and send them at the proper intervals, but whenever a team member carries these out, there’s a risk of human error. That’s why many turn to automated services to handle tasks like these. Deel, an HR platform provider, notes that automating tedious manual HR processes can make a big impact in several ways. Here are just a few:

  1. Guaranteed compliance. Automated document management and scheduled communications mean everything you need to keep compliant is done for you.
  2. Fewer manual errors. Decrease the likelihood of costly liability claims and enhance efficiency with human error out of the equation.
  3. Improved consistency. Provide a consistent experience for applicants and employees across the board.

Like all highly regulated employment practices, it’s best to review your policies and procedures with your organization’s legal counsel. Ensuring that the language is clear to applicants and employees is a great place to start, but employers also need to have a strategy in place if adverse action is required.

Free up time and reduce stress by handling adverse action through automation. Learn more about One Source’s One-Click Adverse Action service >>

Disclaimer: This post is for informational purposes only and does not constitute professional advice. Always consult with legal counsel for personalized guidance.

 

Answering All of Your Fair Credit Reporting Act and Adverse Action FAQs

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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.