Background Check Adverse Action: The FCRA Steps Before You Withdraw an Offer

These steps exist for reports you order from a screening company.

The FTC and EEOC guidance draws the line there: when a background report comes from a company in the business of compiling background information, the FCRA's notice-and-consent sequence applies.

Calling a former supervisor yourself is not covered by it; a reference interview a screening company conducts for you is, because reports based on personal interviews about a person's character, general reputation, personal characteristics and lifestyle are what the FCRA treats as investigative consumer reports, with extra notice duties under 15 U.S.C. § 1681d.

The report itself has edges.

Under the FCRA's seven-year rule (15 U.S.C. § 1681c), a screening company may not report arrests, civil suits or other adverse items that antedate the report by more than seven years, but criminal convictions carry no federal time limit, and neither limit applies to a job paying $75,000 or more a year, though states can restrict reporting further.

One gap to flag for behavioral health employers: whether a state-agency fingerprint check counts as a consumer report was not addressed in the sources behind this page, so put that question to your screening company or counsel rather than assuming the steps below do or do not apply.

This page walks the sequence in order, step by step.

For where a background check sits alongside license verification and exclusion screening — and which check to run first — see the hiring screen guide.

If you are still mapping the whole process, the behavioral health hiring hub organizes the rest of the guides by stage.

Before you order the report, two documents.

First, give the candidate a clear written disclosure that a background report may be obtained for employment purposes — and under 15 U.S.C. § 1681b(b)(2) that disclosure must sit in a document consisting solely of the disclosure.

The FTC is specific: the notice must be in writing, in a stand-alone format, and cannot be in the employment application.

A disclosure folded into your application packet or offer letter fails that test.

Second, get the candidate's written authorization; the authorization may share a document with the notice.

Two details that matter later.

If you want the authorization to let you get consumer reports throughout the person's employment — not just at hire — it has to say so clearly and conspicuously, so write it that way the first time.

And you certify compliance to the company you are getting the information from: that you gave the notice, got permission, and will not misuse the information in violation of equal opportunity laws.

Check whether your screening vendor's order form includes the certification — either way, it is your obligation, not theirs.

If the report comes back with something that could cost the candidate the job, the next document is the pre-adverse action notice.

Under 15 U.S.C. § 1681b(b)(3), before taking any adverse action based in whole or in part on the report, you must give the person a copy of the report and a written description of their rights under the FCRA.

This is what puts the correction mechanism in the candidate's hands: they read what a database recorded about them and can dispute it before you decide.

This step is also where the FCRA process meets the discrimination analysis.

The EEOC's 2012 enforcement guidance on arrest and conviction records draws lines worth knowing before you write the notice.

An arrest alone does not establish that criminal conduct occurred, and excluding someone based only on an arrest is not job related and consistent with business necessity — though you may act on the underlying conduct if it makes the person unfit for the job.

For convictions, the guidance expects a targeted screen on the three Green factors — the nature and gravity of the offense or conduct, the time that has passed since the offense or completion of the sentence, and the nature of the job held or sought — followed by an individualized assessment: tell the person they may be excluded because of past criminal conduct, give them a chance to demonstrate the exclusion does not properly apply to them, and consider whether what they show means the policy is not job related as applied to them.

Title VII does not require an individualized assessment in every case, but the EEOC says a criminal-record screen without one is more likely to violate Title VII.

Two facts set the current climate: the guidance is still posted and states it remains in effect until rescinded or superseded, though its page now says the contents do not have the force and effect of law; and Executive Order 14281 of April 23, 2025 directs all federal agencies to deprioritize enforcement of disparate-impact liability, including Title VII, which is the basis of much of the guidance.

Nothing has been withdrawn, and the state and city laws in the last section below add process duties of their own — so run the assessment and write it down either way.

The FCRA does not name a number of days to wait between the pre-adverse action notice and the final decision.

What it requires is sequencing — the candidate gets the report and the rights summary before you act — and that gap is only meaningful if it is long enough for them to read the report, gather evidence and dispute it.

Where no statute sets a floor for you, pick a window, write it into your screening policy, and apply it to every candidate the same way.

California, New York City and Washington do set floors, and where you hire in one, it controls.

In California, after a written preliminary decision to rescind an offer over conviction history, the applicant gets at least five business days to respond before the employer may make a final decision.

Under New York City's Fair Chance Process, the employer must give the applicant a written copy of its criminal history inquiry and its Fair Chance Analysis and allow a reasonable period of at least five business days to respond before finalizing the decision.

In Washington, under its 2025 amendments, an employer acting on an adult conviction must identify the record and hold the position open for a minimum of two business days for the person to respond, then give a written decision — and those amendments reach employers with 15 or more employees from July 1, 2026 and smaller employers from January 1, 2027.

Then handle whatever comes back.

If the candidate disputes and the screening company corrects the report, redo the assessment on the corrected version before you decide.

If they send an explanation instead, treat it as the individualized assessment input it is, and record why it did or did not change the outcome.

After you make the final call, the FCRA requires the closing document.

The adverse action notice must include the name, address and phone number of the screening company that supplied the report; a statement that the company did not make the decision; and a notice of the person's right to dispute the accuracy or completeness of any information the company furnished, and to get an additional free report from the company if they ask for it within 60 days.

Your screening platform may generate this letter with the report — check that it carries your practice's decision and the vendor's details, not a template placeholder.

Send it even if the candidate never responded to the pre-adverse action notice; the duty runs off the decision, not the correspondence.

And it is not only for rejected applicants — the same pre-adverse steps and this final notice attach to any adverse action based in whole or in part on a report, which includes acting on a new report about a current employee.

Then the paperwork tail.

The FTC and EEOC say hiring records, including background reports, must be preserved for one year after the records were made or the personnel action was taken, whichever comes later.

When that passes, dispose of the report and anything you gathered from it securely — shredding paper, wiping electronic files — and build that disposal step into the file rather than leaving it to memory.

California, New York City and Washington each add duties to the FCRA sequence — the details that change your adverse-action workflow most for behavioral health roles.

California's and New York City's statutes are keyed to when you may ask about conviction history at all.

If you hire across state lines, check each state's own fair-chance statute as well.

California.

The Fair Chance Act (Government Code section 12952) bars employers with five or more employees from asking about conviction history on the application or otherwise before a conditional job offer.

During a conviction history check, employers there may not consider arrests not followed by conviction, diversion program participation, or convictions that were sealed, dismissed, expunged or statutorily eradicated.

Before denying a job because of conviction history, a California employer must make an individualized assessment of whether the conviction history has a direct and adverse relationship with the specific duties of the job.

The five-business-day window above is that statute's requirement, not the FCRA's.

New York City.

The city's Fair Chance Act makes it unlawful for most employers to ask about or consider an applicant's criminal history before a conditional offer, and requires the Fair Chance Process before withdrawing an offer based on conviction history — the written inquiry and analysis, then the at-least-five-business-day response window.

Washington.

The state's 2025 amendments bar adverse action based on an arrest record or a juvenile record outright, and add the two-business-day hold and the written decision for adult convictions, phasing in on the dates above.

Two more overlays to check for your own states.

The FTC notes that state law can restrict employers' use of consumer reports — usually credit reports — for employment purposes; our sources do not say which states, so confirm yours before your screening package includes a credit report.

And the fair-chance statutes carry details this page does not reproduce in full; your screening vendor's compliance library or employment counsel can map them to wherever you actually hire.