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Employer Requirements for notifying Disqualified Applicants

By Khodadawd “Cody” J. Farzad


    background checksWhat must be done if a company decides not to hire an applicant based on the results of their background report? Do you notify the applicant via phone and tell them they are no longer a candidate for the position or do you simply move on, waiting for them to contact you? Both of these answers are incorrect and frankly are reckless when it comes to proper hiring practices. Unfortunately, we receive calls from applicants on a regular basis claiming that the company they applied with either notified them via phone that they are no longer considered for the job, or didn’t contact them at all. The first question I present to the applicant is did the company that you applied with provide a pre-adverse/adverse action letter? Alarmingly, the common answer is”What is an adverse action letter?”

    It is explicitly stated in the Fair Credit Reporting Act (FCRA) “Summary of Rights” (the form that legally MUST be provided to each applicant who will be the subject of an employment background check) that they have the right to dispute any derogatory information that is contained within their background report. This procedure is called the Pre-Adverse/Adverse Action process, otherwise known as the “Applicant Dispute Process”.

    The following spells out exactly what employers must do under the pre-adverse/adverse action process when the results of an applicant’s background remove that applicant from consideration for hiring.

    Pre-Adverse Action:

    1. Draft a pre-adverse action letter which contains contact information for the background screening company that performed the background check. Clearly state why they are receiving the letter (negative or derogatory information was found and reported.)

    2. Include with the pre-adverse letter a copy of the actual background report.

    3. Also include a copy of the FCRA “Summary of Rights”

    4. If they are a California resident, also provide a copy of the California “Statement of Consumer Rights”, along with a copy of the “Notice Regarding Background Investigation”.

    Fax, e-mail or send by certified mail the above-referenced documents to the applicant. You must then allow five business days for the subject to contact the background screening company and dispute the negative or derogatory information, should they so choose. . After five business days have passed, you may now move on to the Adverse Action process. The Adverse Action process is very similar to the Pre-Adverse Action process.

    Adverse Action:

    1. Draft an adverse action letter which contains contact information for the background screening company that performed the background check. Clearly state they will no longer be considered for employment by ______ due to the negative or derogatory findings of the background report.

    2. Include with the adverse letter a copy of the actual background report.

    3. Include a copy of the FCRA “Summary of Rights”

    4. If they are a California resident provide a copy of the California “Statement of Consumer Rights”, along with a copy of the “Notice Regarding Background Investigation”.

    These steps must be followed each time an employer decides not to hire someone based on the results of their background check. Because the job market is extremely competitive and currently saturated with applicants, it is crucial that employers protect themselves from frivolous hiring lawsuits by ensuring they are abiding by the FCRA.

About the Author:

Khodadawd “Cody” Farzad Khodadawd “Cody” J. Farzad, B.S., appointed to EmployersChoiceOnline.com as Manager of pre-employment background screening and drug testing. Farzad’s duties include managing the day-to-day operations of pre-employment screening and ensuring that all background reports are federally compliant with consumer reporting guidelines. Contact him at (800) 424-7011 or

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