Background Check Hiring Process

Next Steps After a New Hire Fails a Background Check

Searching for candidates to fill crucial positions at a company can be very stressful and time consuming. Hiring managers must comb through possibly hundreds of resumes, making calls and conducting interviews to find the right person for the job. So what happens when you find the perfect candidate but then they fail a background check? Let’s dive into a step-by-step process that all hiring managers should follow.


So you found the perfect candidate. This person had a wonderful resume, did great during the interview, and seems like they would fit well within the company. However, they failed the background check. Before you can continue with any action, the first thing every employer must do is confirm that the background check is 100% accurate and belongs to the candidate in question. Inaccurate data entry and inconsistencies tend to happen during the application process. Internet database records could also be outdated or incomplete. You need to make sure your background check company performs a quality inspection of the record to ensure accuracy.

Review Your Policy

This step is where having a background check policy and decision matrix are helpful. The background check policy will have guidelines and general direction for screening when hiring for certain positions within your organization. A decision matrix is a reference tool to review when a background check reveals a criminal record. The background check policy and decision matrix should be reviewed and updated regularly according to current regulations. When your candidate fails the background check, refer to each of these to see if the negative item is within your hiring criteria.

Pre-Adverse Action

Before making the decision to retract a job offer, the job candidate must be given an opportunity to explain and/or dispute the accuracy of the background check. The Fair Credit Reporting Act specifies that candidate must be notified with a Pre-Adverse Action notice. They should also receive a copy of their background report, a copy of their rights under the FCRA and a reasonable period of time to dispute the results.


After the candidate receives their pre-adverse action notice, the employer must allow a reasonable amount of time for them to review the results of their background check. If your new hire is able to properly explain and/or dispute the results, and their record is updated and removed, they are approved and can move forward in the hiring process. If they cannot explain, or do not dispute the results, the next step is to send an Adverse Action notice.

Adverse Action/Job Offer Retracted

Adverse action may be taken only after following the required pre-adverse action process. The adverse action notice must be in writing and state that the job offer is retracted due to failing the background check and that the results were not disputed. The candidate must also be provided with a copy of the report and the background check company used to run the report.


Making hiring decisions should be a documented, multi-step process to ensure candidate’s rights are being protected. FCRA claims are on the rise with more companies being subjected to legislation for not following the correct hiring procedures. This is why it is important for employers to review their hiring and background check process regularly and keep their background check policies up to date.



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