Adverse Action in Background Checks: Employer Responsibilities

When an employer considers taking a negative employment action based on the results of a background check — such as not hiring, promoting, or retaining an individual — they are legally required to follow a process known as “adverse action.” Governed by the Fair Credit Reporting Act (FCRA), this process ensures candidates have a fair opportunity to understand and respond to any findings that may impact their employment.

At Confirmify, we help businesses stay compliant with adverse action requirements while making timely and informed hiring decisions.

What Is Adverse Action?

Adverse action refers to any decision that negatively affects a candidate or employee based on information in a consumer report, including:

Denying employment
Withdrawing a job offer
Refusing a promotion
Terminating employment

Because background checks are considered consumer reports under the FCRA, employers must handle adverse action with care to avoid legal exposure.

Steps in the Adverse Action Process

To stay compliant, employers must follow a multi-step process when considering adverse action:

Pre-Adverse Action Notice
Before taking any action, you must notify the candidate of your intent to do so. This includes:
- A copy of the background check report
- A summary of their rights under the FCRA
This step gives the individual a chance to review the findings and dispute any inaccuracies.
Waiting Period
Employers must give the candidate a reasonable amount of time (typically 5 business days) to respond or initiate a dispute. This window allows the candidate to explain or correct any issues found in the report.
Adverse Action Notice
If, after the waiting period, the decision to proceed with the adverse action remains unchanged, you must provide:
- A final adverse action notice
- The name and contact information of the background check provider (Confirmify)
- A statement that the screening provider did not make the decision
- A notice of the individual’s right to dispute the report

Confirmify provides automated pre- and post-adverse action tools to streamline this process and help ensure you never miss a step.

Common Mistakes Employers Make

Failure to follow adverse action procedures can result in FCRA violations and costly lawsuits. Some common errors include:

Skipping the pre-adverse notice altogether
Taking action too quickly, without waiting the required number of days
Not providing the background check report or summary of rights
Relying on inaccurate or outdated information
Making blanket decisions without an individualized assessment

Even well-intentioned employers can misstep without a structured workflow in place.

Best Practices for FCRA Compliance

To avoid legal risk and support fair hiring, employers should:

Use FCRA-compliant language in all adverse action notices
Maintain a clear audit trail of dates, communications, and decision rationale
Regularly train hiring managers and HR staff on proper procedures
Work with a screening provider like Confirmify that automates compliance workflows
Consider individualized assessments to evaluate the relevance of findings in context

Why Choose Confirmify?

At Confirmify, we don’t just deliver accurate and timely background checks — we ensure you’re equipped to act on the results responsibly. Our platform includes built-in adverse action tools that guide you through each required step, helping you stay compliant with FCRA regulations without slowing down your hiring process. Most background checks are completed in just 8 hours to 3 days, and our clients report 30–50% faster turnaround times than with previous providers. With Confirmify, you can make confident hiring decisions backed by a legally sound process.

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