Adverse Hiring Decision Process

Adverse action, part of the Fair Credit Reporting Act (FCRA), is a denial of employment, or any other decision for employment purposes, that unfavorably affects any current or prospective employees. The decisions may include not hiring, not retaining or not promoting an individual.

If an applicant’s consumer report returns adverse information, which may result in an adverse hiring decision, the employer is obligated under the FCRA to complete the following steps. If the employer does not take proper action they expose themselves to legal risk.


Before an adverse hiring decision is made, supply the applicant with the Pre-Adverse Action Letter, a copy of the consumer report and a copy of the Summary of Rights under the Fair Credit Reporting Act. This step notifies the applicant that information on the consumer report could lead the employer to take adverse action.


Give the applicant sufficient time to respond and/or dispute the information; the Federal Trade Commission suggests five days. This will allow the applicant the opportunity to review the consumer report and dispute the findings if they do not agree with the accuracy of the report.

If the applicant disputes the information on the consumer report, the Consumer Reporting Agency will reinvestigate any disputes and correct or reaffirm the report; an updated report will then be issued to the employer. The timing of the reinvestigation will depend on the issues being investigated; however it will be given immediate attention so a proper hiring decision can be made by the employer.


If adverse action is taken, send the Post-Adverse Action Letter. This step notifies the applicant that they are no longer being considered for the position or the offer is revoked.

Diploma Mills


Definition: Companies that sell “degrees” on the internet without requiring the buyer to do anything more than pay a fee.

Shocking statistics from a May 20, 2015 editorial in The New York Times asserts that “there are 3,300 unrecognized universities worldwide, many of them selling degrees at all levels to anyone willing to pay the price, and that more than 50,000 Ph.Ds. are purchased from diploma mills every year – slightly more than are legitimately earned.”

The competitive job market has made education qualifications more valuable than ever so it is not surprising to see that job candidates are embellishing their qualifications. The Federal Trade Commission provides the following clues to help you spot questionable credentials on a resume or application. Look for:

  1. Out of Sequence Degrees. When you review education claims, you expect to see degrees earned in a traditional progression — high school, followed by bachelor’s, master’s, and doctoral or other advanced degrees. If an applicant claims a master’s or doctoral degree, but no bachelor’s degree — or if the applicant claims a college degree, but no high school diploma or General Educational Development (GED) diploma, consider it a red flag, and a likely sign of a diploma mill.
  2. Quickie Degrees. It generally takes time to earn a college or advanced degree — three to four years for an undergraduate degree, one or two years for a master’s degree, and even longer to earn a doctorate. A degree earned in a very short time, or several degrees listed for the same year, are warning signs for the hiring official or the person doing the preliminary screening.
  3. Degrees From Schools in Locations Different From the Applicant’s Job or Home. If the applicant worked full-time while attending school, check the locations of the job and the educational institution. If the applicant didn’t live where he went to school, check to see if the degree is from an accredited distance learning institution, using the steps described under ‘Checking Out Academic Credentials.’ If the degree is not from a legitimate, accredited distance learning institution, it may be from a diploma mill.
  4. Sound-Alike Names. Some diploma mills use names that sound or look like those of well-known colleges or universities. If the institution has a name similar to a well-known school, but is located in a different state, check on it. Should you come across a degree from an institution with a prestigious-sounding foreign name that calls for some homework, too. Researching the legitimacy of foreign schools can be a challenge, but consider it a warning sign if an applicant claims a degree from a country where she never lived.

A background screening provider can help you verify that the school, professional program, degree(s) achieved, and date the degree was awarded are accurate to what a candidate is reporting on their resume. If the applicant is still attending school, dates of attendance can also be provided. Verifying qualifications can protect you again negligent hiring claims in the future.

“Ban the Box” on Employment

Are you aware if you are an employer in one of the 21 states and more than 100 cities and counties that have already passed “Ban the Box” legislation?

The “Ban the Box” movement relates to removing the conviction history checkbox from job applications thus making sure employers consider a candidate’s qualifications first and delay the background check inquiry until later in the hiring process

Ban the Box

Noncompliance can make you subject to monetary fines and/or imprisonment which varies in severity. Two state examples are:


  • For employers that employ 10 or fewer persons at a site, the penalty is up to $100 for each violation, not to exceed $100 in a calendar month.
  • For employers that employ 11 to 20 persons at a site, the penalty is up to $500 for each violation, not to exceed $500 in a calendar month.
  • For employers that employ more than 20 persons at one or more sites, the penalty is up to $500 for each violation, not to exceed $2,000 in a calendar month.


  • A violation is a misdemeanor with potential penalties of a $500 fine and 90 days’ imprisonment.
  • In addition, complainant may be awarded back pay, reinstatement, attorneys’ fees, and compensatory damages (including damages for emotional distress and expenses incurred in seeking other employment)