For those unaware, Adverse Action Notice generally indicates that a candidate was found with some discrepancy in their records after a pre-employment background screening, that might deem them unfit for the role they’ve applied to.

Keep in mind that this doesn’t indicate that the candidate is guaranteed to not be hired, but their chances are severely affected. It is also crucial for companies to comply with the local and federal laws regarding Adverse Action Notices as failure to comply with such regulations can result in serious lawsuits being filed against the employers that may result in hundreds of thousands of dollars.

So, in this blog, we aim to describe the steps you need to take that are crucial when handing out an Adverse Action Notice.

First Step: To Send a Pre-Adverse Action Notice

After conducting a thorough background screening of a potential hire, if an employer discovers something along the lines of criminal record or discrepancy of information in general, they may choose to send a Pre-Adverse Notice to the candidate and inform in detail as to why they do not wish to proceed with them.

But, it’s an organizations responsibility to inform the candidate of their right to dispute any information that they believe is incorrect. They may send the report digitally or through mail, describing the exact reasons as well as sending the background screening report as well.

Second Step: Waiting Period

Now that the Adverse Action Notice has been sent to the candidate, the employer must now wait for a specified period (usually around 5 working days) to ensure the candidate has enough time to on their hand to dispute information that might have been there due to human error.

There can be many forms of errors, such as identity theft, transcription errors in the reports or even outdated information. Candidates should always re-check these matters to ensure that there aren’t any within their documentation as these mistakes only tend to diminish their chances of getting hired in the first place.

Third Step: Review Candidate’s Response

After the 5 days wait period, the company generally takes the time to thoroughly review the candidate’s claims. If there were any errors made from the company’s end during the background screening process, they must ensure that the candidate is notified and such mistakes are documented as to not be repeated in the future.

However, if the issues come from the candidate’s end, they must also ensure transparency and inform the employer and send out correct information. But, this would certainly damper their hopes of joining the organization as the lack of attention to detail would surely be considered as a red flag and the employer might still decide to not proceed with them.

Fourth Step: Send Final Adverse Action Notice

Finally, if the employers deem it too big of a risk to proceed with that candidate, then they may notify them with immediate effect as to save time for themselves, as well as the potential employee. Companies must ensure there is transparent communication between both parties as dictated by the FCRA.

Next step would be to send the copy of background screening report along with the Adverse Action Notice even if it was conducted by a third party. They may choose to send it electronically or in printed form, depending on their preference.

Fifth Step: Properly Dispose of Sensitive Documents

HR professionals must ensure that all sensitive documentation obtained after the pre-employment background screening that would no longer be relevant is discarded, whether it’s through shredding, incineration, or wiping of information from their database.

The reason being to primarily comply with the privacy regulations such as Fair Crediting Report Act and to ensure that a candidate’s information is not used inappropriately. By keeping information longer than necessary can result in potential legal risks and is a violation of privacy laws.