Well, this isn’t good. Shelly Shellyson looked so perfect on paper. She even blew your mind in the interview. Those credentials. That personality. A true team player with smarts and a sense of humor. She was going to be great.

So you extended a verbal offer to Shelly right after the interview. A little presumptuous, yes, but you couldn’t let someone this good pass you by. Never mind the normal (and strict) hiring protocols that you were supposed to adhere to. 

Then you got Shelly’s background check report back and your perfect plan puffed into a cloud of smoke. Red flags. A criminal history. You simply can’t take that kind of gamble with your business or with your other employees.

What are your options? Acting recklessly got you into this mess, but with some careful guidance from Active Screening, we can help get you out of it.

Step One – Did you ask Shelly to sign off on her background check, including gathering information about her credit report?

If you didn’t, you and the background screening agency may be in trouble with the Equal Employment Opportunity Commission (EEOC) and in violation of the Fair Credit Reporting Act (FCRA). The FCRA requires employers to disclose to candidates that they are intending to run a background check for employment purposes. By law, this must be consented to by the applicant in writing on a form separate from a job application. If you followed the letter of the law in getting Shelly’s consent, you’re protected but you should still consult with your Human Resources department, or if you’re small enough where you don’t have one, you should seriously consider hiring an employment law attorney to help you over this speed bump.

Step Two – Did you report your findings?

You are bound by FCRA law to follow specific reporting requirements when it comes to requesting, filing and acting on information obtained in background checks. Aside from written consent from the applicant and to the screening agency, an employer must provide a candidate with a copy of their report AND notify them of their rights before taking any action. In Shelly’s case, you must tell her that you ran her background check, give her a copy of its results, and inform her that you are concerned with some of its findings. You MUST do this before taking any ‘adverse action’ (ie. not hiring her or rescinding her job offer) based on the results. You should also make sure that you are not violating an federal or state equal opportunity laws by using information in the background check to make an employment decision with discriminatory tendencies.

Step Three – Did you advise Shelly of her rights?

Before you can tell Shelly “this just isn’t going to work out,” you need to follow FCRA guidelines and notify Shelly about the screening results and how it is affecting your decision to offer her the job. This is called Pre-Adverse Action and it essentially allows Shelly to see her background check, find out what information in there is cause for concern, and obtain a Summary of Rights Under the FCRA. This document explains to Shelly what she is allowed to see and what actions she can take. The basic employee/applicant rights are as follows:

  • You must be told if information has been used against you.
  • You have the right to know what’s in your file.
  • You have the right to ask for a credit score.
  • You have the right to dispute incomplete or inaccurate information.
  • Consumer reporting agencies (background screening agencies are also called CRA’s) must correct or delete inaccurate, incomplete, or unverifiable information.
  • Consumer reporting agencies may not report outdated negative information.
  • Access to your file is limited.
  • You must give your consent for reports to be provided to employers.
  • You may limit “prescreened” offers of credit and insurance you get based on information in your credit report.
  • You may seek damages from violators.
  • Identity theft victims and active duty military personnel have additional rights.

Step Four – Did you follow proper Adverse Action procedures?

Investopedia defines ‘adverse action’ “as action that denies an individual or business credit, employment, insurance or other benefits. An adverse action is generally taken by a business or government based on a criminal past or information found in credit reports.”

If you’re going to take adverse action against Shelly based on the findings in her background check, then you must give her this information:

  • Names, address, telephone number and other contact information of the Consumer Reporting Agency (screening agency) who has issued the report
  • Statement saying the CRA was not the decision maker in the employment offer and that the CRA can’t explain why the adverse action is being taken
  • Statement explaining the candidate’s right to get a free copy of the report from the CRA if requested within 60 days of the notice of adverse action
  • Statement verifying the candidate’s right to dispute the information with the CRA and ask for corrections

If you follow these steps, you should be in the clear when you rescind Shelly’s job offer.

What other background check stumbling blocks do you have questions about? Leave a comment below or Tweet us here. We’d love to help you out!

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