What is adverse action?

Adverse action is a legal process employers must follow if they’re considering not hiring or promoting you, or firing you based on information found in a background check. “Adverse action” is a legal way to define an action that is unfavorable to you, such as not getting hired based on your 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 you two main notices:

• A pre-adverse action notice. This notice is generally in writing and serves to inform you that the employer is considering taking adverse action against you. This notice must include a copy of your 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 you a reasonable amount of time - typically five days - to go over your background check, so that you can dispute any incomplete or inaccurate information.

If you do dispute information in your background check results, the the company that ran your check and data vendor must reinvestigate all the information you dispute. (See How To Dispute An Employment Background Check)  If the investigation finds that the information is incorrect, the background check company must give you and the employer a copy of the corrected report.  An employer can only legally send you a final notice of adverse action after taking these steps.