As a representative of your company, you’re eager to hire a promising candidate. Then the background check comes back. And the results cause you to rethink, then reverse your decision.
What should you do? Stop communication with the job applicant and move onto your second choice? Or send an adverse action letter letting the candidate know about the background check?
While it seems easier to breathe a sigh of relief and keep moving forward, you are setting your company up for potential legal and financial issues by failing to comply with the Fair Credit Reporting Act (FCRA). If you decided against hiring someone due to the results of a background check either before or after an employment offer, then you must send adverse action notices.
How to comply with the FCRA
To comply with the FCRA, you should send two pieces of correspondence regarding the background check:
- The Pre-Adverse Action Notice: This brief letter should state that a decision is pending their employment and include the background report and a copy of FCRA’s A Summary of Your Rights.
The FCRA doesn’t state a specified time frame for the job applicant to contact the reporting agency if the information is incorrect. However, it should be reasonable, and six business days is a fair and equitable waiting period.
- The Adverse Action Notice: If the applicant does not reply and correct the information within the time frame, you may then send the adverse action letter. You should include:
- The name and address of the reporting agency along with the reason for denying employment
- A statement saying the reporting agency did not make the decision and cannot explain why the decision was made
- A statement saying the applicant has a right to dispute the information and can get another copy of the free background report within the next 60 days
While these notices take more upfront work, they do save your company the potential of being sued by the applicant, the Federal Trade Commission, other federal agencies or your state for FCRA noncompliance.
How Signet Screening can help with compliance
Signet Screening offers companies automated pre-adverse and adverse action email notifications. With a few simple steps, you can easily send FCRA-compliant correspondence that’s stored in our system for future reference and use. For a demonstration on how our automated service can help your company, please contact us.
This material is not intended as legal advice and is for general informational purposes only. Those seeking legal advice should consult directly with legal counsel regarding their specific facts and circumstances.
