As a background screening company, staying compliant is essential to what we do as an accredited business. But you may be wondering – what does that mean for you as the employer? The Fair Credit Reporting Act (FCRA) not only applies to Essential Screens as your background screening provider but to employers as well who are required to obtain and disperse several different documents. Today, we are discussing authorization, disclosures, and adverse action.

Authorizations and Disclosures

Firstly, before you ever have a background check performed on an applicant, you must obtain written permission from your applicant to do so. If skipped, this authorization step can cost your company costly penalties and litigation. The FCRA also strictly maintains that disclosures for employment purposes must be:

• “Clear and conspicuous” and
• “In a document that consists solely of the disclosure” (Standalone disclosure requirement)

To put it plainly, your disclosure must be on a page by itself with no confusing or irrelevant information and/or language.

Adverse Action

When information in the background check is going to impact a hiring decision in a negative way, the employer 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 human resources department but at Essential Screens we offer 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

Contact our office if you’d like to add this to your reports. 888-494-9188