Adverse action is a process often misunderstood by employers, but a mistake in this two-step process can land you in court. KRESS offers every client an automated adverse action system as a complimentary service. This allows you to rest easy knowing your hiring practices are compliant, fair, and transparent for all applicants.
With an automated adverse action system put in place, you can rest easy knowing your employee rejections are compliant, fair, and transparent for all employee notifications. This complimentary service is available to every KRESS client.
Understanding The Adverse Action Process
At KRESS Employment Screening, you can automate the adverse action process in order to create a seamless employee rejection in which employee notifications are automated.
So, what is adverse action? An HR tool in which a candidate, employee rejection, or any other decision for employment purposes that adversely affects any current or prospective employee.
Order an automated adverse action process by contacting us, ordering online, or simply clicking the adverse action button on your completed report.*
WAIT 14 DAYS FOR A RESPONSE
The adverse action process gives the applicant the opportunity to refute any information before a hiring decision is made. KRESS uses this HR tool and waits 14 days for a response from the applicant and keeps you informed at every step.
SEND FINAL OR EMPLOYEE NOTIFICATION
After the applicant has an opportunity to see the background report and challenge any adverse information, a second notice is sent stating a final decision has been made.
*When necessary, your candidate is informed they might be rejected based on the results of a background check, and they receive the following documents: Pre-adverse action notice, copy of the consumer report, and Summary of Rights under FCRA.
Discover why compliant adverse action is important when hiring or promoting employees in our FREE guide.
Frequently Asked Questions
Section 603(k)(1) of the Fair Credit Reporting Act (FCRA) states that an adverse action is “a denial of employment or any other decision for employment purposes that adversely affects any current or prospective employee.” These decisions include not hiring, not retaining, employee rejection, or not promoting an individual..
If your company uses a consumer report/investigative consumer report in whole or in part to deny someone employment or promotion, you are obligated under the FCRA to provide BOTH the pre-adverse and the adverse action notifications to those applicants or employees.
The employee notification must contain information stating that an adverse action employment action will be taken, a copy of the consumer report or investigative report, and a summary of the applicant’s/employee’s rights. The disclosure must also include the consumer reporting agency’s name and contact information. Once the applicant/employee receives the disclosure, he or she must be given reasonable time to dispute the information. While there is no time limit specified in the FCRA, legal opinion states five to seven business days as reasonable. KRESS gives 14 calendar days between notices.
The adverse-action notice contains wording similar in nature to the pre-adverse action notice and must be done in a reasonable amount of time after the pre-adverse action notice. The disclosure informs the applicant/employee of the final decision made by your company in not hiring, not retaining, or not promoting an individual.
Yes. Both are required under the FCRA.
Legal opinions have varied; however, there is nothing in the FCRA that states an employer or recruiter must consider any correction that a reporting agency may make. The job should be kept open during the five to seven business days to allow the applicant to dispute the adverse information, but after that, whether or not the information is disputed by the applicant, the employer can make a hiring decision. An employer may choose to wait until the dispute is resolved, but there are no requirements in the FCRA to hold a job open for a long period of time.
Failure to comply with the Fair Credit Reporting Act imposes civil liability, which may result in litigation and costly penalties for your company.
KRESS has created a seamless automated HR tool for the adverse action notification by completing this entire process for you. Once you have determined you will not be hiring a potential employee based on the consumer report we provide you, simply contact us or log into your account online to begin the process, as we will not send the candidate or employee notifications without your approval to do so. Once the notifications have been mailed or e-mailed, you will receive copies of the letters in a final report for your records.
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