Adverse Action

    Disclaimer: The resources provided here are for educational purposes only and do not constitute legal advice. If you have questions regarding your background check policy or a particular record, we advise you to consult legal counsel.

    Adverse action is a legal process employers must follow if they’re considering not hiring, not promoting, or firing a candidate based on information found in a background check. “Adverse action” is a legal way to define an action that is unfavorable to a candidate, such as not getting hired based on a criminal record. This two-step notification process is required under a federal law called the Fair Credit Reporting Act (FCRA).

    The adverse action process requires that employers send candidates two main notices:

    • A pre-adverse action notice. This notice is generally in writing and serves to inform the candidate that the employer is considering taking adverse action against them. This notice must include a copy of the candidate's background check and a copy of A Summary of Your Rights Under the Fair Credit Reporting Act.
    • A final adverse action notice. Between the pre- and final adverse action notices, an employer must give the candidate a reasonable amount of time - typically five business days - to go over their background check, so that the candidate can dispute any incomplete or inaccurate information.

    If the candidate does dispute information in their background check results, then the company that ran the check and the data vendor must reinvestigate all the information the candidate dispute (See How To Dispute An Employment Background Check).

    If the investigation finds that the information is incorrect, the background check company must give the candidate a copy of the corrected report.

    An employer can only legally send the candidate a final notice of adverse action after providing the pre-adverse action notice, complying with the waiting period applicable to them, and providing a final adverse action notice.

    Please note that various states and/or municipalities may have additional requirements for adverse action. We recommend consulting with your legal counsel if you have questions regarding adverse action requirements in your jurisdiction.