What are Pre-Adverse Action and Adverse Action Notices?
“Our company has decided against hiring a candidate based on information found in his background check. What are our options, and what are the next steps we must take in order to remain FCRA compliant?”
Pre-Adverse Action and Adverse Action letters are notices mandated by the Fair Credit Reporting Act that inform an applicant they are being denied employment, insurance, or credit based on information reported in a background or credit check.
A Pre-Adverse Action Notice must be given to the applicant before making a final decision about the applicant’s hiring status. Included in the notice should be a “consumer copy” of the background check and a notification of the applicant’s rights under the FCRA. These notices are also provided, by mandate, to the applicant when they agreed to the background screening.
An Adverse Action Notice is given to the applicant after the employer has made its final decision. The employer must provide a “reasonable” amount of time between sending the Pre-Adverse Action Notice and the Adverse Action Notice. This is typically 5 to 10 business days.