May 15th, 2018 | Debbie Lamb, Sterling Talent Solutions

Answers to Your Adverse Action Questions

Sterling feels that it is important to be a source of the latest updates about compliance changes. We are producing a series of HR compliance webinars with topics including adverse action, how the European Union’s GDPR updates will impact the US and our quarterly FCRA update. Sterling’s own Angela Preston, Joe Rotondo and Patty Hanley recently presented “HR Compliance Part 1: Adverse Action.” where they explained the adverse action process including a company’s legal requirements, timing and process for sending adverse action letters, the implications for not getting the procedures right and how technology can help companies simplify the adverse action process. We received quite a few questions throughout the webinar. Joe and Angela have answered the top twelve adverse action questions from the Adverse Action webinar below.

Your Adverse Action Questions Answered

1. We run background checks on certain of our volunteer applicants. Does adverse action apply to applicants who might be turned away from our volunteer program based on the findings of a background check?Yes, as a best practice, volunteers should be provided with pre-adverse and final adverse action notices so that they may have the opportunity to dispute information in their background check.
2. Regarding state notices that are required to be included with the adverse action process, do I include the state notice that is based on where the applicant currently resides, or the notice in the state where they expect to be working?Generally, it is a best practice to provide the appropriate state form in both the State of residence and the State of employment.
3. Sterling’s report includes a copy of the federal summary and state summary (at the bottom of the report), is this sufficient or do I need to print off another copy of those summaries to mail?It is necessary to provide one copy of the Federal and State summary of rights.
4. Are these requirements mandated for every employer or is there a size component? For instance, if you have fewer than 10 employees you do not need to comply?Federal Adverse Action applies to employers of all sizes. Some Fair Chance or state Ban the Box ordinances may have limitations based on number of employees.
5. Do you follow this process if you do the background checks in-house?It is not necessary if the background check is totally completed in house.
6. Will Sterling notify the employer if the candidate initiates dispute? Yes, the employer will be informed if a dispute is received by Sterling.
7. What should be taken into consideration regarding medical marijuana and positive drug screening results? Based on what I know, employers are not required to hire employees that use medicinal marijuana even if state law permits so I am assuming the same process would apply. Just curious if there are any special considerations here.If you deny employment based on a non-negative drug test that is part of the consumer report, the Adverse Action process should be followed.
8. If the applicant doesn’t contest once the pre-adverse action is received, is the adverse action letter automatically sent?It depends on the way your program has been structured and configured. Some systems will require action on the part of the employer to send the final notice.
9. What “standard” time frame does Sterling strive to provide the final results?Although Sterling has 30 days for dispute resolution, our average turnaround time is between three to five days to resolve a dispute.
10. For external hires, a pre-adverse notice is sent back because their address is wrong. Is the company required to follow up with that candidate and get another address?Employers should consider making another attempt to provide the candidate with the Pre-Adverse letter and documenting those attempts.
11. Is it necessary to send the pre-adverse action letter and the adverse action letter (and attachments) via US postal mail, in addition or in lieu of email?It is only necessary to provide the letters in one manner.
12. If Motor Vehicle Report is part of the background check do you also have to follow the adverse action steps?A Motor Vehicle Report is part of a Consumer Report and as a result, Adverse Action must be processed if that is the reason for denial.

Sterling strives to keep its clients up to date on laws about the background screening industry. To find out more about adverse action and how technology can help organizations simplify the process listen to an On Demand version of the “HR Compliance Part 1: Adverse Action” webinar and sign up for future webinars in our Compliance series.

PLEASE NOTE: Documents/presentations should NOT be construed as legal advice, guidance or counsel. Employers should consult their own attorney about their compliance responsibilities under the FCRA and applicable state and municipal law. Sterling Infosystems expressly disclaims any warranties or responsibility for damages associated with or arising out of this document/presentation or other information provide.

Sterling is not a law firm. This publication is for informational purposes only and nothing contained in it should be construed as legal advice. We expressly disclaim any warranty or responsibility for damages arising out this information. We encourage you to consult with legal counsel regarding your specific needs. We do not undertake any duty to update previously posted materials.