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Adverse Action- When is it needed- How do you do it?

wolfe background adverse action

Hiring a new employee is a big decision for any business, big or small and isn’t taken lightly. When a company decides to not hire an employee based upon findings in a background screening or credit report, the next step is the adverse action process. Adverse action is a two-step process, a pre-adverse action package is sent to the applicant notifying them that they were denied employment, an employment offer was rescinded, or a promotional opportunity denied. The Fair Credit Reporting Act (FCRA) requires a reasonable amount of time, usually 5 business days is the accepted norm however that time frame may change per jurisdiction.

If the applicant responds with a dispute to the Pre-Adverse Action, appropriate actions MUST be followed and within an acceptable time frame.

If the applicant does not dispute the accuracy of the report within the 5 days, then a final adverse action notice is sent to the applicant to explain that they will not be employed or receive the applied for promotion by the company at this time.

Adverse action is not just limited to individual people but also businesses in some circumstances. Employees can be denied a promotion or terminated from employment based upon a background screening or credit report. Yes, you read that right, companies can deny an employee a promotion or even terminate them based upon a background screening or credit report. When this happens, the same course for adverse action above applies.

Wolfe Inc. can handle all administrative requests related to adverse action for our clients which takes a lot of pressure off a company. Wolfe is fully FCRA trained and certified by the NAPBS (National Association of Professional Background Screeners to be fully compliant with FCRA requirements.  which can help put your companies mind at ease concerning adverse action notices. If your company is not following these FCRA requirements, you could be facing serious legal trouble.