This article will help you:

  • Understand Adverse Action in relation to background checks Create a compliant Adverse Action process
  • Complete the Adverse Action process in Checkr
  • Issue Pre-Adverse Action Notices
  • Monitor Adverse Action processes
  • Understand individualized assessment
  • Cancel an Adverse Action
  • Resolve undeliverable Adverse Action notices


If any information contained on a candidate’s background check precludes them from working with your company, it is your obligation to carry out the Adverse Action process. Although responsibility and liability for the Adverse Action process ultimately lies with you as the end user, Certn helps make it easier to maintain a compliant Adverse Action process.


This article is intended to give product guidance and does not constitute legal advice. Please consult your legal counsel for questions or employment practices around Adverse Action and adjudication.


What is Adverse Action, and why is it important?


In the context of background checks, Adverse Action is any action you take based on the information in a background check report that negatively affects someone’s employment. This could mean denying them employment, but can also include denying a promotion or transfer, offering employment in a lesser position, or other negative outcomes.


Because Adverse Action adversely affects consumers (by nature), it is a common area of litigation and compliance risk for you. In fact, the Fair Credit Reporting Act (FCRA) requires that you follow certain procedures if you decline to hire, engage, or promote a candidate on the basis of information contained in a background report.


The Adverse Action workflow is critical because it allows the candidate to raise any concerns about their report, and the FCRA requires that employers/end users (which includes companies that use independent contractors) to follow this stringent process.


Some employers are tempted not to communicate with candidates whom they decline. However, if you don’t follow a defined and consistent Adverse Action process, you’re opening yourself up to legal risk.


What’s an Adverse Action process?


To stay compliant and avoid the legal action that can come from not properly handling Adverse Actions, you must follow a process that complies with the Fair Credit Reporting Act (FCRA). Remember that just because a report came back with a review, that is not a reason to disqualify a candidate. Build a consistent adjudication process to take into account the nature of the crime (e.g. petty theft vs. assault and battery), when the crime occurred (e.g. 6 months vs. 6 years), and whether the crime is relevant to the job duties that the candidate would be performing.


A compliant Adverse Action process for employment decisions will include the following:


  • Pre-Adverse Action Notice: Informs the candidate that you are considering not moving forward with the employment process based on information in the background report.
  • Waiting Period: The FCRA requires a reasonable amount of time (usually 7 calendar days, but some jurisdictions require more) before taking final action, so the candidate has an opportunity to dispute any incorrect or outdated information in the report.
  • Adverse Action Notice (or “Post-Adverse Action Notice”): Once you have waited the required amount of time – including time required for the resolution of any dispute – you must provide a final notice of your decision if you have decided not to move forward with the candidate.


Pre-Adverse Action Notice


A Pre-Adverse Action Notice notifies the candidate that information contained on their background report may negatively affect a decision about their employment. It is intended to give the candidate an opportunity to respond to the information contained in the report, so by law it must contain a copy of the report. The notice must contain a standard document called “A Summary of Your Rights Under the FCRA,” and some states may require additional notices.


To begin the Adverse Action process from a background check report, log into Certn as an admin, go to an individual candidate’s report, and click Pre-Adverse Action. This button will appear for reports with a review status. Select the charge(s) that you believe disqualify the candidate from employment. You must select at least one, but you should select all the charges that are potentially disqualifying.


Before sending the email, Certn will show you a preview of the email that will be sent to the candidate. Certn will include the necessary notices for the candidate as attachments, including a copy of the background report and "A Summary of Your Rights Under the Fair Credit Reporting Act." All actions will be tracked in an audit log so that you can review them later.


SAMPLE PRE-ADVERSE ACTION LETTER


Waiting period


During the waiting period, the candidate can reach out to Certn directly to dispute the accuracy of their background check report. Candidates may also reach out to you to provide evidence of rehabilitation or additional information to consider. If the candidate does not dispute the report with Certn during this time, then Certn will notify you that the post-Adverse Action Notice can be sent or, in your settings, you can have it sent automatically. Automatic post adverse action is set to "on" by default.


By default, Certn's waiting period is set to 7 calendar days, and the system will change this if a longer waiting period is necessary under applicable law. For example, the city of Philadelphia requires a 10-day waiting period. If the candidate does not respond within that period of time, Certn will automatically send a post-adverse notification (also known as an Adverse Action Notification).


SAMPLE SCREEN SHOT


Note: The FCRA does not define a set number of days for the waiting period, but does mandate a “reasonable waiting period.” This waiting period allows candidates to receive the notice, review the background report, and dispute it if the information is incorrect. Most companies provide at least 5 business days or 7 calendar days to give the candidate opportunity to respond.


To see the status of all candidates in the Adverse Action process, including those in the waiting period, log into the Certn Dashboard, go to the Adverse Action section, and set any status or date filters you want to use.


Adverse Action


Once you have waited the required amount of time – including time required for the resolution of any dispute – you must provide a final notice of your decision if you have decided not to move forward with the candidate. This can be initiated through Certn.


SAMPLE POST ADVERSE ACTION LETTER