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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, applicant 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 candidate 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 supports a 5 to 14 day waiting period between notices, aligned to state and local requirements. We configure this during onboarding.

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 configured waiting period, which KRESS supports at 5 to 14 days aligned to state and local requirements, 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.

An Individualized Assessment ensures that a criminal record is reviewed in the context of the job the applicant is being considered for. Before denying employment, the employer must assess:

• The nature and seriousness of the offense
• The time elapsed since the offense or sentence completion
• The relationship of the offense to the duties of the position
• Any evidence of rehabilitation, mitigating circumstances, or inaccuracies

This assessment must occur after a conditional offer is made but before a pre-adverse action notice is issued.

Your organization does. KRESS automates the notice workflow and records every step; the hiring decision stays with you.

Need a walk-through? Talk to KRESS.

KRESS has built a seamless automated workflow for the adverse action notification process. When a consumer report raises a potential disqualifying concern, your team performs the individualized assessment to determine whether the finding is job-related for the position in question and consistent with business necessity. Once you decide to move forward with adverse action, contact us or log into your account to trigger the two-step notification process. KRESS will not send any pre-adverse or final adverse action notice without your approval. We handle the notice mechanics, the waiting period clock, and the audit trail; you retain control of the decision at every step. After notifications are mailed or emailed, copies of each letter are delivered to you in a final report for your records.