ASA Central Network

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  • 1.  Background checks - Adverse action letter

    Posted 10-12-2020 17:24
    Hi Everyone,

    I have a question for all of you.  We have a client, that is local government and there are certain divisions within this company that want to do their own background check.  We do have our employees sign off allowing it, but we have this situation this past week where our background check came back clear, but when this local government entity ran it she had some traffic issues on it and now they refuse to hire her.  My question here is do they have to provide her with an Adverse Action letter?

    Thank you for any help on this.  I feel this is getting close to co-employment and that maybe we should not let them do background checks on our employees.

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    Sue Beets CSP
    ASAP Companies
    Mansfield TX
    (817) 453-0077
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  • 2.  RE: Background checks - Adverse action letter

    Posted 10-13-2020 08:33
    Good morning Sue. Yes, if the employer decides to deny employment based on the report, they have to start the adverse action process and send a pre-adverse action letter per the FCRA. The FCRA states  "a reasonable amount of time" before sending the final adverse action letter. We suggest 5 business days. This gives the candidate time to dispute any claims on the background check information itself. Of course, always check with legal counsel, but if you have any additional questions, let me know!

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    Chip Ramsey
    Director of Sales
    ScoutLogic Inc.
    614.296.5738
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  • 3.  RE: Background checks - Adverse action letter

    Posted 10-13-2020 08:42
    That is an interesting situation. Please let me know what you find out.
    Thank you,
    Ben

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    Benjamin Kaplan CSP
    CEO
    American Labor Services Inc.
    Providence RI
    (401) 536-9504
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  • 4.  RE: Background checks - Adverse action letter

    Posted 10-13-2020 10:55
    That's a great question. Like Chip said, the employer is responsible for ensuring it gets taken care of. We have had clients conduct their own as well, and they do not share the results with us - however a copy of the report is required to be sent with the pre-adverse action, so we require that they handle it in those instances. They are the ones making the hiring decision based on the results, in your case traffic infractions; since it is their hiring decision, they are the ones that would have to defend that decision, not you, but you would still want to make sure it happens. Legally, I'm unsure of who this would fall on. I hope this helps!
    Jamie

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    Jamie Stafford CSP
    Risk Manager
    Key Staffing
    Topeka KS
    (785) 272-9999
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  • 5.  RE: Background checks - Adverse action letter

    Posted 10-13-2020 11:04
    That's correct. The candidate has to be sent the pre-adverse action letter, a copy of the report and a Summary of Rights under the Fair Credit Reporting Act.

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    Chip Ramsey
    Director of Sales
    ScoutLogic Inc.
    614.296.5738
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  • 6.  RE: Background checks - Adverse action letter

    Posted 10-13-2020 14:33
    The end-user of the background check report who is making the hiring decision, is responsible for the adverse action notices. In this situation when you have your "employees sign off allowing it"  are they signing a disclosure and authorization form indicating the government agency is the end-user or is it your company? Another question to ask. Is the government agency using a 3rd party to supply them with the background checks? If they are conducting the background check themselves and not using a third party then FCRA adverse action would not apply.

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    James Waters
    Director of Operations
    3rd Degree Screening Inc.
    Council Bluffs IA
    (712) 256-1701 x101
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  • 7.  RE: Background checks - Adverse action letter

    Posted 10-14-2020 13:29
    Hi Sue,
    I agree with what everyone has stated regarding the Adverse Action letter.   I would think that the candidate completed paperwork to be considered as a permanent employee, correct?  I'm with you on co-employment.  Does the candidate know that she isn't getting hired on permanently?  Let us know what happens!

    Thanks,
    Cathy

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    Cathy Juarez
    Vice President Sales
    Employnet, a workforce solutions company
    San Jose, CA 95119
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  • 8.  RE: Background checks - Adverse action letter

    Posted 10-15-2020 10:31
    Hi Sue,
    As a staffing company, one of the things that you want to always do is go over a hiring policy with your clients as to what they are willing to hire for and not willing to hire for with regards to the background check.  This would eliminate the discrepancy when a client compares results of a background check to the results of the check that you had ran. 

    And when you are paying the employee, you want to be responsible for the background check as well as the pre-adverse / adverse action process. It is also recommended that you do not share the results of the background check with your client, but rather have a document prepared stating that the applicant has passed the background check based upon the requirements that you (your client) have set.  By having a hiring policy with your client and you being responsible for the background check process for your employee would help minimize your risk for any compliance issues.

    The tricky part in your situation is that you mention that you have "your employees signing off allowing"  that your client will do the background check. The authorization and disclosure forms should be very clear for the applicant as to who is requesting the background check.
    And if the applicant is truly your employee (you are paying them, temp work) then you should be the one doing the background check, handling the hiring decision and therefore the pre-adverse/adverse action process.  I also realize in many cases this is not easy when you are dealing with a client. 

    This is not legal advice by any means and you should definitely talk to your legal counsel about this or even reach out to ASA's legal team. 

    I hope this helps.

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    Fred Amicucci
    Director of Operations
    DataScreening
    800-247-2365, Ext 209
    201-927-2575 Cell
    famicucci@datascreening.com
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