What if a Potential Hire Disputes an Item on a Background Check

Background check

Employers conduct background checks for many different reasons. Criminal background checks can flag past offenses that may be relevant for the position you are currently filling. Employment verification checks can ensure that the individual possesses the skills, education, experience, and credentials they say they do.

And while background checks are becoming increasingly common and very reliable, there are instances where a candidate may dispute an item on a background check or certain information found may be incorrect. So if your company conducts background checks or uses background information obtained by third parties in making hiring decisions, it’s a great idea to have some familiarity with the dispute process.

What to Do if a Background Check Reveals Something – Pre-Adverse Notification

Background checks commonly occur in the final hiring stages, usually when a provisional offer has been extended to the candidate. The employer must understand that they cannot immediately rescind this offer because something in the background check appeared that might make them ineligible for the position. First, however, the employer must provide the candidate with the opportunity to dispute the information.

The first step in this process is issuing a pre-adverse notice to inform the candidate that an item on their background check is considered a factor that would make them ineligible for hire. When notifying the candidate, the employer is legally obligated to include a copy of the background report and A Summary of Their Rights under the Fair Credit Reporting Act. The employer must also provide the contact information of the screening agency responsible for conducting the report and a reasonable amount of time to dispute the results.

Affording Time for the Candidate

The period in which the candidate is allowed to review the results may vary depending upon the industry and any applicable state or local regulations. But during this time, the burden is with the candidate to dispute the information contained in the report. Once the candidate has had a reasonable amount of time to dispute the information reported, or a re-investigation of disputed information has been completed, you can make a final hiring decision.  If the decision is to rescind the job offer, an Adverse Action Notice must be provided to the candidate. On the other hand, if you do not hear from the candidate within the legally allowed time frame, you can proceed with an adverse action by formally rescinding the job offer.

If the candidate believes some of the information is incorrect or inaccurate, they can open a dispute with the company that conducted the background check. In addition, depending upon the type of information that is inaccurate, the candidate may be required to follow up with specific agencies or institutions, such as:

  • Credit Information: If some of the information on your credit report is inaccurate, you can follow up with the Consumer Reporting Agency and ask them to change the information.
  • Education: If your educational records are inaccurate, you will want to contact the institution’s registrar or office of student affairs.
  • Criminal Information: Instances of misidentification can be addressed by contacting the courthouse where the alleged offense occurred. You may have to verify your identity with them. If the error is linked to a fingerprint background check, you may have to contact the FBI.
  • Employers: If an employer provided inaccurate information, you could contact them to correct the information.

After this follow-up process, the candidate can request that the screening company begin a re-investigation. Again, the results of the updated background check would be provided to the employer.

Rescinding a Job Offer – Adverse Action Notification

Suppose you can move forward with rescinding the offer due to information revealed in a background check. In that case, employers must formally retract the offer in writing by issuing an adverse action notice. The statement must follow regulations outlined in the Fair Credit Reporting Act.

Even after this is completed, the applicant can still dispute the result of the background check. But if the employer has followed the outlined steps, they may move forward with rescinding the offer to this candidate and attempting to find another candidate. However, a failure to follow these steps may result in a Fair Credit Reporting Act complaint to the Federal Trade Commission or the US Equal Employment Opportunity Commission. These complaints may result in fines or penalties, which is why it is crucial to comply with all legal requirements when issuing a pre-averse action or an adverse action notification.

Dealing with a dispute can be time-consuming and delay your ability to hire a different candidate. However, legal regulations are in place to ensure that candidates have a fair process for ensuring that the information used in the hiring process is valid and complete.

If you have additional questions on a background check dispute, contact USAFact today.