Adverse Action Process

Background checks play an important role in many areas of our lives, from employment to housing. Organizations rely on background checks to make informed decisions when assessing the suitability of individuals for certain roles or responsibilities. However, the use of background checks must be carried out carefully, following legal regulations and best practices to protect individuals’ rights under the Fair Credit Reporting Act (FCRA).

In this blog, we will be talking about what legally must happen when an individual’s background check is going to have a negative impact on their employment, housing, etc. Let’s dig into the adverse action process.

Adverse Action

When information in a background check is going to impact a decision in a negative way, the employer/entity must follow what is called the adverse action process. This begins with pre-adverse action which is intended to provide the candidate with an opportunity to respond to the report before a decision is made.

Pre-Adverse Action Includes:

  • A copy of the report
  • A summary of the applicant’s rights under the FCRA
  • Providing the applicant with a reasonable amount of time (5-7 days) to respond with any clarifying information

If the applicant does provide information, it must be considered. If, after review, the employer still wants to pursue the negative action, the adverse action step begins. Both pre-adverse and adverse letters can be delivered by hard copy, electronically, or both.

Adverse Action Process Includes:

  • A notice that includes the hiring decision based on the report
  • A notice of the consumer’s rights to receive another copy of their report at any point
  • A summary of the applicant’s rights under the FCRA and a clear statement to inform the candidate of their power to dispute
  • If the background check was outsourced to a company – a statement that the hiring decision was not made by the contactor but by the employer as well as the contact information of the company that was outsourced

This all requires time and attention that can slow down your already busy human resources department. Essential Screens offers a one-click adverse action process that will initiate the process and automate this so that you don’t:

  • Forget to issue the pre-adverse action notice
  • Fail to allow enough time for a response between pre-adverse and adverse action notices
  • Fail to document the date the adverse action notice was sent
  • Fail to address disputes in a timely manner
  • Not dispose of the background check reports and any sensitive information in a secure manner

Call our team today to learn more about getting set up with our one-click adverse action process!  

Explained: Clean Slate Laws

Hiring Challenges

Cybersecurity Best Practices


Have a