How to Handle Not Hiring Applicants Because of the Background Check

Employers may spend weeks, or even months, recruiting, scouring resumes, and interviewing. Hiring managers might believe they found the perfect candidate, only to find unacceptable information during the background screening process.

What may show up that makes an employer decide not to hire a job seeker?

• Criminal history that shows a recent felony conviction
• Employment verification that shows a discrepancy in their work history
• Misrepresented their education
• Omitted they previously lived to hide aspects of their past they would rather not discuss
• Drug test came back positive

Finding out your number one choice for a position has a past, or present, that discourages not hiring him or her is a real bummer.

What NOT to do:

If any of these, or any other troubling information, negative pieces of information, is uncovered by the background check report, the last thing employers should do is nothing. Avoiding or ignoring the candidate with no explanation is bad business. Plus, it can get you sued. There are steps to take if a person's background screening report returns information that causes a pause in hiring them, and failing to take them sets the company up for costly hiring lawsuits. The Fair Credit Reporting Act requires certain actions be taken to maintain a fair, compliant hiring process. 

How to Handle Not Hiring Applicants Because of the Background Check

#1: Send a pre-adverse action letter. When employers decide against hiring someone based on whole or in part on the candidate's background check report, the FCRA requires that employers notify the applicant, and send him/her a pre-adverse action letter. This lets the person know there was something in their report that is negatively affecting their chances of being hired by you. Include a copy of the background report as well as a "Summary of Your Rights Under the Fair Credit Reporting Act." It is within the candidate's rights to dispute the information reported through the background screening company. 

#2: Give them a chance to explain. Every person involved in the hiring process must note that employment screening practices are not an exact science that yield 100% accurate results. Information in a background check could possibly be inaccurate because of a misspelled name during the ordering process, a date of birth entered in error, an error from the county clerk, or many other factors. Talk with the candidate about the issue and give him or her a chance to explain. Make notes of the date the conversation took place, who participated, and what was discussed, and add them to the job candidate’s file. By hearing their side, companies are better able to see the entire picture and make a non-biased, fair hiring decision.

#3: Objectively review the entire picture. Use the information in the employment screening report, the candidate's response, and the position being hired for under advisement. Weigh each piece of information carefully against the other, and against your hiring policy, before reaching your conclusion. Thorough consideration leads to the best hiring decision for your company and the candidate and lessens the chances of dealing with discrimination litigation from disgruntled applicants.

#4: Make a final decision. It’s time for the “yes” or “no” part of the process. Take all you have learned about the candidate and formulate your final decision. If you decide to hire the candidate move forward with the offer and the onboarding process as usual. If not...

#5: Send them a final notice adverse action letter. Employers are required to send a "Notice of Adverse Action." This lets the candidate know the information in their background report adversely affected them being hired. 

Give proper time between the “Pre-Adverse Action” letter and the final letter. A five-business day time frame is what is generally recommended as a best practice. There have been recent lawsuits by job candidates who were only given a three-day window, so don’t get in a hurry and send out the final notice too soon.

Hiring new employees requires walking the line between onboarding their job candidates fast with properly checking their criminal history, verifying their employment history, and confirming their education claims. Balance the information you find out in background checks against opening your company up to the risk of a hiring lawsuit. With hiring litigation and discrimination claims on the rise, and most of them swaying in the applicants’ favors, these types of policies are critical to help minimize the chance of expensive lawsuits while still maintaining a safe, productive working environment.