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
This article is for the following user roles: admin, adjudicator
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, Checkr helps make it easier to maintain a compliant adverse action process.
For a quick overview of adverse actions, see our Checkr Check-In video:
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 the Consider status, that is not a reason to disqualify a candidate. Build a consistent adjudication process to take into account the nature of the crime (such as petty theft vs. assault and battery), when the crime occurred (6 months vs. 6 years ago), 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”): After you wait 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.
For non-employment purposes, you're not required under the FCRA to execute this whole process. You must only provide the adverse action notice.
Checkr helps you stay compliant throughout the adverse action process.
Set an adverse action email address
The adverse action email is the email used to send pre- and post-adverse action notices on your behalf to candidates. It's also the address that will receive undeliverable notices if an adverse action notice isn't deliverable to a candidate (for instance, if they have a mistyped email address on file).
As part of your account setup, you are required to select an adverse action email address. As an admin user, go to Account Settings to set this up.
On the Account Settings page, your admin will also need to provide a Support email or Support phone for candidates to contact you with questions related to adverse actions.
Many Checkr clients choose to use a shared inbox for their adverse action email, so multiple people on your side can check the inbox and handle undeliverable adverse actions.
Important: Make sure that the email address you select is an email address at your company, not a Checkr email address.
Pre-adverse action notice
A pre-adverse action notice notifies the candidate that information contained on their background report might 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 requires additional notices.
To begin the adverse action process from a background check report, log into Checkr as an admin or adjudicator, go to an individual candidate’s report, and click Pre-adverse action. This button will appear for reports with a consider status.
On the next screen, 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, Checkr will show you a preview of the email that will be sent to the candidate.
Checkr 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. You can also download a PDF copy of the notices sent to the candidate.
When you preview the email, you’ll see the adverse action email address that will be used to send the email at the top of the preview screen.
During the waiting period, the candidate can reach out to Checkr directly to dispute the accuracy of their background check report. Candidates can also contact you to provide evidence of rehabilitation or additional information to consider. If the candidate does not dispute the report with Checkr during this time, then the post-adverse action notice will be sent automatically.
By default, Checkr’s waiting period is set to 7 calendar days, and Checkr's system will modify this waiting period as necessary under applicable law. For example, the city of Philadelphia requires a 10-day waiting period. Additionally, Checkr clients can increase the number of days from 7 should they wish (although 7 days is the minimum). If the candidate does not respond within that period of time, Checkr will automatically send a post-adverse notification to the candidate on your behalf (also known as an adverse action notification).
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 Checkr Dashboard, go to the Adverse action section, and set any status or date filters you want to use.
Here, you can see the status of your candidates in adverse action.
In 2012, the Equal Employment Opportunity Commission (EEOC) issued guidelines advising employers to consider the specifics of each candidate who might be denied employment based on a background check.
Namely, you should consider:
- The nature and gravity of the offense or conduct
- The time that has passed since the offense, conduct and/or completion of the sentence
- The nature of the job held or sought
The criteria mentioned above is also known as the 'Nature-Time-Nature' test. You are also encouraged to consider other factors like the number of offenses, employment history before and after the offense, rehabilitation efforts, and other circumstances.
The cities of New York and Los Angeles specifically require this type of individualized assessment as part of the hiring process, including that you “show your work” to the candidates to document your decision making. If you’re hiring candidates in these locations, Checkr will add an additional, optional step so you can “show your work.” To learn more, see our article on individualized assessment.
Cancel an adverse action
During the waiting period, the candidate can contact you and provide compelling evidence of rehabilitation or other context that makes you reconsider your adverse action decision. If that’s the case, click Cancel adverse action (it’s located where Engage and Pre-adverse action previously were).
Canceling adverse action will cause the post-adverse action notice not to be delivered to the candidate. After you cancel the adverse action, you can proceed to engage the candidate.
Resolve undeliverable adverse actions
Sometimes your adverse action notices might be undeliverable due to a misspelled or incorrect email address provided by the candidate. Checkr will try 4 times over 24 hours to deliver the adverse action notice, but if it cannot be delivered at that point, it will be considered undeliverable.
For any notices that are undeliverable, correct the candidate’s email address to ensure that the required notices are properly delivered.
If an adverse action is undeliverable, you will receive an email at your adverse action email contact with the following message (to change your adverse action email address, have your admin go to Account Settings > Adverse action email):
Resolve the error by following the link in the email, then correcting the email address in the Guided Resolution for undeliverable adverse action notice.
In the case that there is no email to correct, click I’m manually handling this, resolve this notice. You’ll see downloadable copies of the pre-adverse action notice and the post-adverse action notice so that you can send them by alternate means.
The Adjudication status of these reports will be designated as manual to remind you to complete the process manually.
On the Checkr Dashboard, go to the adverse action section and filter by Undeliverable to see which notices couldn't be delivered. You can then update the candidate’s email address to re-send communications. If you do not have a correct email address, you should resolve the adverse action offline.
Checkr's guidance should not be construed as legal advice, guidance, or counsel. Companies should consult their own legal counsel about their compliance responsibilities under the FCRA, Title VII, and applicable state laws. Checkr expressly disclaims any warranties or responsibility or damages associated with or arising out of information provided.