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Making Adverse Employment Decisions


A background check that we conducted on a potential hire came back with a felony conviction.  Do I still have to hire this individual if he/she is otherwise qualified?


That can be a tricky situation. There are a number of laws that come into play. First is the Fair Credit Reporting Act. The FCRA requires that employers inform employees or potential hires prior to conducting a background check, that they may use a consumer report in making a hiring/employment decision. The employer must have the employee/candidate sign a release authorizing them to obtain the requested information. Additionally, the employee/candidate must receive notification of their rights under the FCRA. While many companies will include a release in their employee application, it is best to have a separate document that clearly communicates the intention to conduct the background check.

Should negative information be obtained as a result of the background check, there are a number of things to consider. There is no federal law prohibiting employers from asking about arrests or convictions. However, keep in mind that arrests do not necessarily indicate guilt; it is better to just look at convictions. While criminal conviction is not a protected status recognized by the EEOC, there can be adverse impact to certain groups in basing decisions solely on a conviction record. It is important to consider whether the conviction would impact the individual’s ability to do the job. For example, someone with a conviction for theft or writing bad checks may not be a viable candidate for your bookkeeper opening; however, a DUI conviction may not impact the individual’s ability to keep the books.

In the event that you make an adverse employment decision based on information you obtained from a consumer report, there are additional notification requirements under the FCRA. Prior to making the decision, you must send a pre-adverse action notification, advising the candidate that information you obtained from a background check may impact your employment decision;  a copy of the consumer report must be included with this letter and the employee must be allowed the opportunity to dispute with the credit reporting agency.  Finally, once the decision has been made, the individual must be notified again that an adverse decision has been made based on information obtained from a consumer report.

While this process may seem cumbersome, it is important that it is followed or you could risk civil liability and fines. The appropriate notifications can be obtained on the Fair Trade Commission website ( or the consumer reporting agency can often provide the documents.

Recruitment isn’t just a matter of finding and hiring the right person. There are scores of regulations that must be adhered to or you risk fines or penalties. Strategic HR, inc. specializes in helping companies find, hired and retain a talented workforce while keeping an organization compliant. Visit our Recruitment page to learn how we can help you hire safely.