An employer's 10-step adverse action checklist
March 30, 2016
Fair Credit Reporting Act (FCRA), when employment is denied following a background check. The first step is a pre-adverse notice, sent before a final decision is made. The second step is a notification of adverse action, sent once a hiring decision is made. Adverse action has a critical role to play in effective hiring, but it also comes hand-in-hand with potential legal pitfalls and a litany of regulations. To keep your business safe, here’s a 10-step checklist to keep in mind:
- Include both pre-adverse and adverse action steps in your process
- Provide the applicant with a copy of their background check, to allow them to respond to any issues and inaccuracies
- Include the information of the employment screening company to the applicant in case they want to dispute information
- Provide the candidate a reasonable period of time to explain the information in the report or to dispute the accuracy of the reported information
- Document all communication that occurs during the screening process
- Consider ban the box laws in your region (consult with your lawyer and employment screening firm to make sure you’re aware of local and state regulations)
- Provide the candidate with an individualized assessment to allow them the opportunity to highlight that they can be employed
- Protect the privacy of the information you receive. As a general rule of thumb, this information should be released on a “need-to-know” basis only.
- Do not ask for a release of information that’s not strictly necessary. Not only will you increase your risk of violating labor and federal credit reporting laws, you will also waste the time and energy of everyone involved.
- Consider keeping the job vacancy open while the adverse action process is being performed
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