Failed Background Check After Receiving a Job Offer - What's Next?

What to Do If a Candidate Fails a Background Check After Receiving an Offer

Finding the perfect candidate to fill a job opening can be a significant undertaking. Hiring managers need to find someone who has the experience, qualifications, and skills to do the job and whose personality and work style meshes with the company culture of that workplace. Matching a person to a job is hard work, which is why it is a victory to find the perfect candidate and extend him or her an offer of employment—but what if that candidate failed a background check after the job offer?

What Does It Mean to Fail a Background Check?

In this post, we will explore how a failed background check after a job offer might prompt an employer to rescind that offer. Before we review the dynamics of pulling an employment offer or disqualifying a candidate based on a background screening, we will examine another critical question: what does “failing” this check mean?

An employment screening is not a test or exam at school for which there are “right” or “wrong” answers and a clear, objective standard for what constitutes “passing” or “failing.” A background screening can include a variety of information about a candidate’s past, including criminal history, civil court history, education and employment history, driving record details, and credit history. Information gleaned in any of these categories could potentially constitute a “red flag” depending on the employer and position, and each could potentially be grounds for a failed background assessment.

Some pieces of information are more likely to be employment red flags than others. For instance, felony convictions—particularly those for violent crimes or sexual offenses—are likely to cause pause for most employers. Other red flags are specific to certain jobs: one example is driving history, which is not relevant to most jobs but is highly relevant to positions that involve driving.

Usually, “failing” a screening means that a candidate has something in their past that calls into question their ability to take the position safely and effectively. Regarding criminal history, employers are usually looking for convictions that relate directly to the responsibilities of the job, or crimes that have a high likelihood of recurring due to the nature of the job. For example, a bank might rescind a job offer from a candidate after learning that he or she has a conviction for embezzlement, due to the opportunity that the position might provide to commit a similar crime in the future.

Beyond criminal history, a candidate might fail their background screening if the check reveals that they lied about their education, work history, or other qualifications; or if reference checks call into question their work ethic and character.

There are many reasons why a candidate fails a background check. It is up to the hiring manager and their team to determine whether they feel comfortable hiring someone despite red flags.

A Candidate Failed the Background Check: Here's What to Do

Imagine that you’ve found the perfect candidate for an open position with your organization. This person has a strong resume and impressed you throughout the interview process. You made them a job offer, contingent on passing a candidate history check. What happens if the investigation turns up one or more red flags that force you to reconsider your hiring decision? Now that your candidate has failed a background check, what should you do?

Here’s a step-by-step guide to help you through this difficult (and sometimes legally fraught) part of the pre-employment screening process.

1. Confirm You Ran the Check on the Correct Person

Background checks are typically run using a person’s name, which can sometimes lead to false positives since many individuals have relatively common names that are shared by others. A check can return criminal convictions or records that don’t belong to your candidate but rather to someone who happens to share their first and last name.

These data inaccuracies can hurt job seekers. What if you were to rescind a job offer from your perfect candidate over a criminal record only to learn that the search found the wrong person, and the criminal record that you discovered doesn’t belong to your candidate? You are now casting aspersions on the candidate’s reputation based on false information, which in turn reflects poorly on your organization.

For these reasons, it is vital for every employer to make sure that they are working with a background reporting firm that has a reputation for running thorough, accurate, and high-quality record searches. At backgroundchecks.com, we take significant steps to avoid false positives with our reports, integrating birthdates, locations, Social Security Numbers, and other details into our candidate checks.

These detailed checks not only help us to make sure that we are finding the right records for the right individuals but also add value four our clients. We can offer address history checks, alias checks, and other screenings that can help provide a fuller picture of a candidate’s past.

2. Carefully Review Your Hiring Policy

Determining whether a candidate fails a background check is an inexact science. What constitutes a failed background check for one employer or job won’t necessarily have the same effect in a different workplace or position.

Employers can streamline the decision-making process around background checks by establishing a thorough hiring policy complete with a background check protocol. This policy should outline which candidate history searches the employer will run for each candidate (or for each department, type of department, or position, if there is variance). It should also incorporate a “decision matrix” that identifies the types of criminal convictions or other findings that the employer will consider grounds to say that a candidate failed their background check after the job offer.

Having these policies in place delivers several clear benefits to the employer. The first is legal protection. Following a clear policy for every hiring situation reduces the likelihood that an employer might treat one candidate (a person of color, for instance) differently from another. Detailed hiring policies can be a protection against discrimination or bias in the hiring process, which reduces legal liability risk.

The second major benefit of such a hiring policy relates to the background history protocol and decision matrix. By identifying the specific red flags that a search might uncover—from crimes to resume lies and beyond—this policy gives hiring managers a map that they can use to determine whether to rescind a job offer or move forward with employment.

A candidate history search may uncover unforeseen circumstances that are not specifically outlined in the decision matrix, in which case the hiring manager and their team will have to decide how to proceed. In most cases, a thorough candidate vetting policy and decision matrix will save employers from having to ask questions about specific red flags every time they review a background report.

3. Notify the Candidate with a Pre-Adverse Action Notice

In consumer reports, “adverse action” refers to a decision made based on a background report that will have a negative impact on a candidate. In employment screenings, “adverse action” typically means that the employer has decided to rescind the candidate’s job offer or otherwise disqualify the candidate from employment consideration.

As part of the Fair Credit Reporting Act (FCRA), an employer in this situation must provide the candidate with a “pre-adverse action notice.” This notification is intended to let the candidate know that, due to findings in their background, they will no longer be considered for the job at hand.

The notice must outline the specific reason for the adverse action—be it issues with criminal history, credit history, or something else—and must include a copy of the background report that reflects this information. The notice must also include a copy of the Consumer Financial Protection Bureau’s summary of rights.

Finally, the employer must wait a “reasonable” amount of time—typically interpreted to mean five business days or more—to allow the candidate to review the adverse action notice and background check report and respond to them. Before this waiting time has elapsed, the employer cannot finalize any adverse decision based on the candidate’s background checks. The employer cannot formally rescind the candidate’s job offer or hire someone else until at least five business days have passed.

The “reasonable” waiting period gives the candidate time to dispute the findings of the report, should they believe those findings to be inaccurate. A candidate would initiate such a dispute directly through the background reporting company, not through the employer making the adverse decision.

If a candidate does dispute the information that an employer has furnished to them with their pre-adverse communication, the employer must wait to take adverse action until after the dispute is fully resolved.

4. Provide the Candidate with an Adverse Action Notice

If, after following all the requirements listed above, an employer decides to move forward with an adverse decision based on a background check report, they must provide the candidate with an adverse action notice. This document notifies the candidate in writing that the employer has made a final decision to rescind their job offer and disqualify the candidate from employment consideration.

In addition to notifying the candidate in writing of the hiring decision, the adverse action notice must provide several other pieces of information:

• The name, address, and telephone number of the background check company that conducted the screening and prepared the report
• A disclaimer that the background reporting company did not make the adverse decision
• A notification that the candidate has the right to obtain a second free copy of their report at any time during the 62 days following the adverse decision
• A notification that the candidate can contact the reporting agency to dispute any information in the report that they deem to be inaccurate, incomplete, or out of date

What Employers Need to Know About the Fair Credit Reporting Act (FCRA)

The FCRA is a vital text for any employer that vets candidates through a background check process. Full FCRA compliance allows an employer to avoid lawsuits, negative press, and other significant concerns. This federal law covers everything from how an employer must obtain a candidate’s consent to conduct a background investigation to all the adverse action steps that an employer must take.

To make sure that your business is following the FCRA to the letter, read the FCRA compliance guide in our Learning Center.