Adverse Action What Is It, Why Does It Matter, and What You Need to Know?

How Background Checks Are Done?

Adverse Action What Is It, Why Does It Matter, and What You Need to Know?

The Rise of Employment Background Checks

Welcome to the world of employment background checks, a crucial step in the hiring process that ensures the safety and integrity of the workplace. As we dive deeper, we’ll explore the concept of adverse action—a term that sounds daunting but plays a vital role in hiring decisions. Let’s break it down into simpler terms and understand what it means for both employers and candidates.

Imagine you’re inviting someone into your home. You’d want to know a bit about them, right? Employment background checks are similar; they’re like a peek into the past of potential hires to ensure they’re a good fit for the company. From verifying educational qualifications to checking criminal records, these checks have become an essential tool for companies aiming to make informed hiring decisions.

What is an Adverse Employment Action?

Adverse Action sounds like legal jargon, and it is to an extent, but it’s quite straightforward. Ever been turned down for a job, or know someone who has? That’s adverse action in action. It’s when an employer decides not to hire, promote, or retain someone based on what they found in the background check. It’s not necessarily about finding something sinister; sometimes, it’s just about finding the right fit.  For instance, it wouldn’t be a good fit to hire an someone convicted of robbing a bank to be a bank teller right?!

What is an Adverse Action Letter?

So, you’ve applied for a job, and the background check uncovers something that makes the employer hesitate. Before they make any final decision, they’ll send you an adverse action letter. Think of it as a heads-up, a courtesy note saying, “Hey, we found something that concerns us.” This letter is a critical piece of the process, ensuring everything is transparent and fair.

Employer Steps for Taking Adverse Action

There’s a proper way to handle these situations, and it’s about being fair and giving everyone a fair shot at clearing up any misunderstandings.  Taking adverse action in the context of employment, particularly following a background check, involves a series of specific steps designed to ensure fairness and compliance with the Fair Credit Reporting Act (FCRA). Here’s a step-by-step guide

  1. Pre-Adverse Action Notification: Before taking any final adverse action (like not hiring, not promoting, or terminating an employee), the employer must provide the individual with a pre-adverse action notice. This notice includes:
  • A copy of the background check report that influenced the decision.
  • A summary of the individual’s rights under the FCRA.
  1. Waiting Period: After sending the pre-adverse action notice, the employer must wait a reasonable amount of time, typically at least five business days. This waiting period allows the individual to review the report, dispute any inaccuracies, and provide additional information or clarification.
  2. Review of Dispute (if applicable): If the individual disputes the accuracy of the background check report, the employer should review any additional information or corrections provided by the individual or wait for the background screening company to complete a reinvestigation.
  3. Final Adverse Action Notice: If the employer decides to proceed with the adverse action after the waiting period and any disputes have been resolved, they must send a final adverse action notice to the individual. This notice should include:
  • The final decision of adverse action.
  • The name, address, and phone number of the consumer reporting agency that provided the background check report.
  • A statement that the consumer reporting agency did not make the decision to take the adverse action and cannot provide specific reasons for it.
  • Notification of the individual’s right to dispute the accuracy or completeness of any information in the report.
  • Information on the individual’s right to obtain an additional free report from the reporting agency within 60 days.
  • Record Retention: Employers should retain documentation of the adverse action process to comply with FCRA requirements and provide proof of compliance in case of any disputes or legal challenges.

Following these steps ensures that the adverse action process is fair, transparent, and compliant with federal regulations, protecting both the rights of the individual and the interests of the employer.

What Do You Do If You Get a Pre-Adverse Action Letter?

Getting one of these letters might feel like a gut punch, but it’s not the end of the road. It’s your cue to review the findings, point out any mistakes, and provide any additional info that might help your case. It’s about standing up for yourself and ensuring your side of the story is heard.

This process isn’t just a series of steps for employers to follow; it’s about protecting candidates’ rights too. You have the right to know what’s found, dispute inaccuracies, and be treated fairly throughout. Knowing your rights is like having a map in unfamiliar territory—it helps you navigate the journey more confidently.

The Positive Side of What Seems Like A Negative

Adverse action might sound negative, but there’s a silver lining. It ensures that hiring decisions are made openly and fairly, with a chance for candidates to correct mistakes. For employers, it’s about building a trustworthy and safe workplace. And for candidates, it’s an opportunity to ensure their records are accurate and reflect their true selves.

While the term “adverse action” might seem daunting, it’s a crucial part of the hiring process, ensuring fairness and transparency. Whether you’re an employer making tough hiring decisions or a candidate facing a pre-adverse action letter, understanding this process helps everyone involved make informed choices.

How We Can Help

EDIFY Background Screening offers its clients a stress-free hiring Adverse Action process with the one-click pre/post adverse action packet processing with electronic delivery. A complimentary benefit that simplifies managing background check outcomes. This efficient tool enables employers to seamlessly communicate with applicants who do not meet hiring criteria, ensuring compliance and respectful engagement. It streamlines the notification process, saving time and maintaining the integrity of the hiring journey. Discover how this feature can transform your recruitment process by contacting us today at or call 336-283-0237.

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By |2024-04-13T11:46:00-04:00March 15th, 2024|, |Comments Off on Adverse Action What Is It, Why Does It Matter, and What You Need to Know?

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About the Author:

Avatar of Zia Rhodes
Zia Rodes is a dedicated Customer Success Manager at EDIFY Background Screening, where she plays a crucial role in ensuring client satisfaction across various screening services including employer background checks, tenant screenings, and comprehensive drug tests. With her deep expertise in conducting criminal background checks, evaluating eviction and credit histories, and ensuring accurate drug test results, Zia brings a wealth of knowledge and experience that aligns perfectly with Edify's commitment to service excellence and integrity. At EDIFY, Zia is renowned for her meticulous attention to detail and her ability to tailor solutions that meet the unique needs of each client, from small businesses to large corporations. Her approach is always grounded in the company’s core values of transparency, ethics, excellence, and compassion. She understands that every interaction is an opportunity to reinforce trust and reliability, ensuring that clients not only receive thorough background checks but also experience a process that is as smooth and transparent as possible. Zia’s extensive understanding of background screening processes, from criminal background histories to detailed checks of credit and eviction records, makes her an invaluable resource for clients needing diverse background check solutions. Her dedication to exceeding client expectations helps EDIFY stand out as a leader in comprehensive and trustworthy background screening services.
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