What to do if a Candidate “Fails” a Background Check

, , , , , , , , | August 11, 2022 | By

When you’re looking to fill a job, it’s easy to get excited about the prospect of finding the right candidate. However, even if everything looks on track—like good qualifications and an excellent interview— they also have to meet your background check standards. What are your options if someones background check raises concerns? How can you ensure that your company is following all applicable laws while still making sure that everyone has a fair shot at employment? Here's what you need to know about adverse action notifications for candidates who “fail” their background checks:

As an employer, you probably already know you should follow a standard process when running a background check. But what if the results are less than ideal? What if you don’t hire the candidate because of felony convictions or misdemeanor charges that show up? What other procedures do you follow at this point?

You can’t blame yourself for the candidate’s past, but you should take steps to make sure that your company isn’t held liable for it. Here are a few steps to consider:

  • Create a disclosure form

  • Consult your hiring policy

  • Can you move forward? If so, how? Is there anything else you need from the candidate before proceeding with hiring/not hiring them?

  • Issue an adverse action notification and allow the candidate to respond

It’s important to have a clear idea of the process and requirements in case a candidate “fails” the background check.

These are some general guidelines for dealing with an failed background check:

  • Don't assume anything about what happened. There are many reasons why someone may fail their background check, so don't jump to any conclusions until you know more about their circumstances and situation.

  • Show empathy towards them as well as their situation, this will help you get more information from them while also making them feel appreciated during what can be stressful times.

  • Be sure that they understand why they were rejected by explaining why there was an issue with their records or how those issues might negatively affect his/her ability to perform duties within your company or organization

When a candidate fails a background check you have a choice whether to take adverse action or proceed with the hiring process. Of course, allow the candidate to provide any further updates that could influence your decision.

Always keep the candidate in updated on what's going on, so they have a chance to present further clarity and explanation. They may also decide to dispute some information on the background check. In contrast, a candidate who cannot do any of this may lead to you initiating adverse action.

 An adverse action notification (AAN) is not the same as an offer letter or employment agreement. It simply informs the candidate that they have failed their background check. Following each step could protect you if the candidate decides to take legal action.

The Fair Credit Reporting Act (FCRA) mandates that the candidate must be provided with the following documentation:

  • Pre-adverse action letter
  • The background report
  • A summary of rights under the Fair Credit Reporting Act

Within this notice, you need to cover the following:

  • The name of the company responsible for the background check
  • Provide a disclaimer that the employer/business made the employment decision, not the background check company or a credit reporting agency
  • Attach a copy of the candidate’s rights under the provisions of the FCRA
  • Provide another copy of the background check report
  • Reaffirm the candidate’s right to ask for a further copy of their background check report within 60 days

You should seek legal guidance when formulating your approach to taking adverse action to help support your FCRA compliance. Consider your formal hiring policy when making a decision to take adverse action. You should also consider giving the candidate some time to correct any issues that may have arisen during the investigation process before making a final determination on whether or not to hire them.

Background checks are an important part of the hiring process. Ensure you get the most qualified, experienced candidate to transform your business and take it to the next level. BIB can support you in hiring the best candidate for your company with fast and reliable background checks. 

Learn more about how our background check services can support your business. Contact BIB now. 


Disclaimer: Companies should consult their own legal counsel about their compliance responsibilities under the FCRA and applicable state and local laws. BIB expressly disclaims any responsibility or damages associated with the information provided.