What Do You Need to Keep in Mind Regarding Adverse Action?
If you plan to reject a job applicant due to information obtained on a background check, you are also required by law to inform the job applicant via a pre-adverse action notice. This notice should include a copy of the check and a copy of "A Summary of Your Rights Under the Fair Credit Reporting Act."
At this point, the applicant has a certain amount of time (usually five business days) to review the check and dispute any findings.
If the applicant does dispute any findings, you and your vendor that performed the check must reinvestigate all the disputed information in a timely fashion. If there are errors/incorrect information, the check itself must be corrected, and a new copy must be given to the applicant. Only after you've taken these steps can you legally send the job applicant a final adverse action notice.
Why Does Adverse Action Even Exist?
Reporting mistakes DO happen (e.g., clerical errors in the courts). It would be a shame to pass on an otherwise excellent job candidate due to an erroneous report on a criminal history or credit check. Adverse action protects consumers, but it also helps employers feel confident in their hiring decisions.
Adverse Action Compliance—How Hard Is It?
Adverse action is a complex topic that involves federal law and ever-changing state laws. The above is a basic overview (and shouldn't be taken as legal advice). Compliance requires vigilance, expertise, and constant awareness about changes in the laws and regulations.