5 Steps for Ensuring Compliance in Adverse Action Decisions

Every business that conducts pre-employment background screening should have a fair and consistent process for making adverse action decisions. EEOC guidelines require employers to “apply the same standards to everyone, regardless of their race, national origin, color, sex, religion, disability, genetic information (including family medical history), or age (40 or older). The EEOC also alerts employers to “take special care when basing employment decisions on background problems common among people of a certain race, color, national origin, sex, or religion; among people who have a disability; or among people age 40 or older.

These 5 steps can help your business maintain compliance when making adverse action decisions:

1. Determine who from the company will make adverse action decisions.

Selecting a small, dedicated group of decision makers ensures the consistency and integrity of compliance requirements regarding adverse action decisions. Groups frequently consist of human resource personnel. Other times, outside legal counsel is retained to ensure compliant decisions. What is important is to keep the decision-making group consistent.

2. Establish what background screening information is relevant to the decision-making process, and cross-reference its use with FCRA, EEOC and state compliance guidelines.

Avoid any type of global policies such as excluding everyone from employment based on the presence of a criminal record. Evaluate job positions individually to determine what negative background screening results are relevant to an applicant’s ability to perform the job.

Review the guidelines provided by the EEOC as well as state and local laws regarding how criminal background screening results can be used in hiring decisions. For criminal offenses that might trigger an adverse action, establish a protocol for using individualized assessments. These assessments give applicants an opportunity to provide additional information concerning their offense. A business can then make an informed review of the potential impact the offense might have on the applicant’s ability to perform the job.

Some laws or regulations prohibit the hiring of applicants with specific criminal convictions (i.e. financial sectors, transportation industry, child or elderly care). It is important for companies to understand that these laws do not necessarily relieve them from completing individualized assessments.

3. Document your policy and process and review with legal counsel.

After establishing what background screening results might result in an adverse action decision, document your company’s policy and the associated procedures for follow-up and applicant communication.

For specific job positions, consider using a matrix with a list of job positions along the x-axis and a list of criminal offenses or other negative background screening results along the y-axis. Incorporate timeframes and next steps by position and offense within the matrix. For example, you may determine that a credit card fraud offense is relevant for call center agent positions but perhaps not relevant for forklift driver positions.

HELPFUL TO KNOW: Criminal offenses typically fall into three primary classifications: infractions (petty offenses resulting in fines), misdemeanors (criminal offenses resulting in fines, probation, community service, restitution or short-term jail sentence), or felonies (serious criminal offenses involving physical harm or threat of harm to others, white collar crimes, fraud schemes, and second-time offenders resulting often in a jail sentence).

4. Train your staff on your policy and process.

With your policy in place and your procedures thoroughly documented, train all staff involved in hiring decisions. Teams responsible for making adverse action decisions must understand their critical role in making fair and compliant decisions.

5. Consistently record information for all adverse action decisions.

If an adverse action decision is required then specific steps must be carried out in applicant communications. Include a Pre-Adverse Action Notice, a waiting period for possible disputes, and a final Adverse Action Notice (see post “How to Communicate Employment Adverse Actions” for more helpful information).

Your Adverse Action Procedure should outline what information should be recorded for all adverse action cases. This information typically includes a timeline, the background screening results that triggered further investigation, documents relating to individualized assessments and copies of all notices to applicants.