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For hiring managers seeking qualified job applicants, it can be especially challenging to consider denying employment when the unemployment rate keeps rising. Still, finding the best candidate, getting them screened, hired and onboard is job #1. Employers must be sure to avoid hiring bias and allow candidates access to the information used in denying employment, especially when hiring as the nation returns to a new normal. 

Employers must continue to abide by the federal agency regulations such as the U.S. Equal Employment Opportunity Commission (EEOC) and the Fair Credit Reporting Act (FCRA) when hiring and denying employment during the COVID-19 pandemic. 


Employers are already aware of the potential for hiring bias and other forms of discrimination when screening job applicants. Unfortunately, the onset of the COVID-19 virus prompted even more. In March, as Americans were learning about susceptibility to the virus and the states were preparing to lockdown, the EEOC issued a warning to employers that national origin and race discrimination was increasing towards Asian-Americans. There was also an uptick in workplace and hiring discrimination against people with disabilities, people of color and older candidates. Even Zoom or online video interviewing revealed unconscious bias towards those who were unable to get their hair done during the pandemic! With so many losing their jobs, their credit scores could also be suffering . This is one reason why many states are prohibiting using credit reporting as a reason to deny employment. 

If hiring managers are denying employment, it is advisable to provide a viable reason why.  The candidate could assume that they are not being hired due to their race, age, disability or other reasons and the EEOC will protect them from such discrimination. Employers can protect themselves via a background screening decision matrix to prove consistency when hiring for certain job positions.

Also, when screening employees, it’s important for employers to understand “when” it’s okay to ask for particular demographic information. If background check consent and application forms are given to a candidate prior to an offer being made, hiring managers should avoid questions about age (date of birth), gender and other information that could be potentially discriminatory.

However, if the background check forms are given AFTER an offer is made, an employer could then consider asking for these details. This information will be helpful to a background screening company to more accurately match the background check records to the employee.

EEOC Background Screening  Decision Matrix

Adverse Action

If there is a legitimate and non-discriminatory reason to deny employment, employers must then follow adverse action procedures as defined by the FCRA.

Adverse action is a validation point on the information obtained on the applicant via a background check report. When a candidate is denied employment based on the information discovered during a background screening, they are allowed the right to view and dispute the information used against them. Employers must also follow a FCRA-defined process of gaining authorization and consent to run a background check. Obtaining a background check, without authorization and consent, could lead to litigation for the employer. 

Adverse Action procedures include:

  • Pre-Adverse Action The employer notifies the applicant, in writing or other methods of contact specified in the consent to a background check, that they are considering adverse action. They also provide:
    • A written summary of the background report findings
    • Copy of the background report
    • Copy of "A Summary of Your Rights under the Fair Credit Reporting Act"
    • Name, address, and phone number of the reporting agency
    • "Reasonable period of time" to dispute the accuracy or completeness of information in the report
    • Contact information should the applicant choose to dispute the findings
    • Employers must wait to hear from the applicant for at least 5 days
  • Disputing the Records If an applicant chooses to dispute the findings of the background report, they have the ability to contact the reporting agency to review the records. The reporting agency will then notify the employer if the records are inaccurate or if they are verified to be true. The reporting agency will also notify the employer if they should proceed with adverse action.
  • Adverse Action With no disputes from the applicant or if the findings are verified, the reporting agency will notify the employer to proceed with adverse action. This adverse action notice will include:
    • Notification to the applicant that the employer has taken adverse action (denied employment) due in whole or in part to information found in the background report
    • Name, address, and phone number of the reporting agency
    • Notice stating that the reporting agency did not make the adverse decision and will be unable to explain why the decision was made
    • Notice of the individual’s right to a second copy of their report, free of charge, from the reporting agency within 60 days
    • Notice of their right to dispute the accuracy of the report

Sample Adverse Action Notices

Employers that do not follow guidelines from the EEOC or the FCRA could face penalties and litigation.  As a PBSA accredited background reporting agency, VeriFirst specializes in FCRA compliance so we can be a great partner to employers, especially when hiring during the COVID-19 pandemic. Let us know how we can help you!

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Ryan Howard

President / Partner @VeriFirst

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