Answer

What is Adverse Action and when is it required?

The adverse action process is required for any action taken that denies an individual employment, credit, insurance, etc. based on information obtained through a consumer report. This three-step process complies with federal laws to protect applicants from discrimination. Although it’s the law, many companies still fail to send adverse action notices, subjecting them to potential lawsuits. Employers must abide by the guidelines set forth by the Fair Credit Reporting Act (FCRA) which requires the employer to provide a standalone disclosure informing the applicant that a consumer report may be obtained with written consent. The employer must also provide a copy of the pre-adverse notice, background report, and summary of rights to the applicant prior to an adverse action decision. If any adverse information appears on their background check, then a pre-adverse notice is used to inform the employee that something has returned which may or may not affect their hiring decision. This gives the employee an opportunity to file a dispute prior to receiving a final adverse action notice. An adverse action notice must be sent only if the employer denies the applicant employment based on the information from the background check.

A growing trend with the employment screening industry is the use of commercially compiled databases, also known as instant background checks or “national criminal database searches.” These types of checks are quicker and cheaper but lack accuracy and credibility and put employers at a greater risk of fines and lawsuits from the Fair Credit Reporting Act (FCRA).

Background Check related

Why are background checks important?

It’s important that employers maintain standards when making hiring decisions to keep their workplace safer while ensuring the quality of employee matches their requirements. If an applicant has anything to hide, they will most likely not want to apply to a position that requires a background check. When implementing employment screening procedures, such as a background check, employers will most likely see an improvement in the quality of the applicants that apply.

The background check company will contact verified previous employers to confirm dates of employment, job title, and reason for leaving. Education verifications generally confirm the year of graduation, major, degree earned, and attendance dates.