adverse action.” Adverse action can also be letting go an existing employee, or refusing promotions based on similar information. For the sake of this blog post, however, we will focus on taking adverse action during the hiring process. Taking adverse action is legal, so long as you do not discriminate against a candidate in your action, and as long as you have the candidate’s written permission to conduct these kinds of background checks. It’s not illegal to require someone to sign their permission for these types of background checks in order to receive job offers or promotions either. (In fact, at-will employment is valid in every state in the U.S., though some states offer exemptions in order to protect employees.) In order to conduct credit checks, employers must follow two federal laws: the Fair Credit Reporting Act and the Equal Credit Opportunity Act. The former allows applicants to review their credit report if adverse action is going to be taken based on information in the report, to ensure that the information contained in it is correct. (The applicant then has a set amount of time — which varies by state — in which he or she must contest the information with the credit reporting agencies.) The Equal Credit Opportunity Act simply requires that employers not take adverse action based on any discriminatory factors, such as the person’s age, sex, race, religion, national origin or other protected classes. These laws and considerations are important to keep in mind during the pre-employment process in order to avoid lawsuits. Because there are rules surrounding how permissions must be gained in regards to credit checks, and laws vary by state in how the applicant can contest adverse actions, let Mind Your Business help you get started with your pre-employment screening process.]]>
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