Proactive Compliance: 3 Tips for Risk Management

November 16, 2021
Checkr Editor

While hiring often feels transactional, it’s important to remember that it has a real and lasting impact on candidates’ lives–and also on your own organization. It’s crucial to be as thorough as possible when going through the hiring process, and that includes incorporating a background check as a screening measure. A compliant background check process requires proactive preparation including consistent processes in order for your organization to stay compliant.

If, after conducting a background check, you determine the candidate is not the right fit, you’ll want to ensure you’re being fully compliant before notifying them of your decision. Here are three ways to be proactive when it comes to compliance:

1. Conduct an individualized assessment

There is no one-size-fits-all approach to conducting and analyzing background checks. Each person going through the process has a unique set of circumstances, and so reports should be interpreted and adjudicated with that in mind. This is further explained in the EEOC’s 2012 Guidance, which essentially says employers shouldn’t reject a candidate solely because they have  records in their background check report. Instead, if a potential issue arises, employers should complete what’s called an “individualized assessment.” 

As part of this process, companies must conduct a litmus test developed by the EEOC called the Nature/Time/Nature test:

  • Nature: First, consider the nature of the offense on the candidate’s record. Is it petty theft or something more serious? Instead of disqualifying a candidate automatically because they have a criminal record, you should take the type of crime into account.   
  • Time: Time is also an important factor to consider when reviewing a candidate’s report. Perhaps they committed a one-time offense 7 years ago and had a clean record ever since. 
  • Nature: Last, think about the nature of work the role in question requires. For example, if a candidate applying for a driving position has a DUI on their record, that may carry weight in the decision. Essentially, consider whether the type of job they’d be doing in any way relates to the individual’s record. If someone has a marijuana possession charge, but they’re applying for a job as a painter—how much does that charge relate to the skills or characteristics needed for the position? You’re looking for a clear nexus of skills needed for the job and the nature of the offense. If none exist, you may want to consider moving the candidate through the hiring funnel. 

The EEOC also encourages employers to consider other factors, such as: 

  • The facts or circumstances surrounding the offense or conduct.
  • The number of offenses for which the individual was convicted.
  • The candidate’s age at the time of conviction, or release from prison.
  • Rehabilitation efforts, such as education or training.
  • Employment or character references and any other information regarding fitness for the particular position.

The best practice with individualized assessment is to build and document a fair process that goes hand-in-hand with your adverse action process. Then, distribute, socialize, and train your adjudicators and hiring managers on the processes so there’s clear guidelines in place when reviewing a candidate. Taking those proactive steps makes it easier for your business to stay in compliance as you hire at scale.

A handy resource with additional details about the individualized assessment can be found here.

2. Follow the adverse action process

If you’ve completed the Nature/Time/Nature test and have decided not to move forward with the candidate, you’re required to go through the Adverse Action process. This means you must tell the candidate you found information in their report that impacts their employment eligibility at your organization. 

This is communicated via a Pre-Adverse Action Notification, which must include a copy of their background check report, any applicable state disclosures, and a FCRA Summary of Rights. You can learn more about the adverse action process here.

3. Wait for any new information

While at this point you may think you’ve reached the end of the road with a candidate, you still have some territory to cover before a final decision can be made. Candidates have a right to provide additional context around the information that led to the Pre-Adverse Action Notification. They can also dispute any inaccuracies they believe were made during the process.

In order to be compliant, companies must give candidates a reasonable time period–usually seven days–to challenge the report. Different jurisdictions may set their own waiting period timelines, so be sure to check the laws and regulations in your area. 

If during this time the candidate says the background check report contains inaccurate information, they can submit a dispute to the background check company, which will investigate the dispute. The Adverse Action process is paused during this time.

If, based on what the candidate shared, you decide not to cancel the Adverse Action, the candidate should then receive a Post-Adverse Action Notification confirming your final decision.

Preparation and process are key

In today’s increasingly complex hiring environment, you’re sure to come across a background check report that leaves room for interpretation and further consideration. By educating yourself on the process and proactively putting compliance protocols in place, you’ll set your company up for success. And who knows, your open role could be the candidate’s chance at their first job–or the first time they’ve been fairly considered for a job they’re qualified to hold. 

Take a deeper dive into background checks and compliance by downloading the eBook, Beyond the Basics: Making Background Checks Work for You.


Nothing in Checkr’s Blog should be construed as legal advice, guidance, or counsel. Companies should consult their own legal counsel about their compliance responsibilities under the FCRA and applicable state and local laws. Checkr expressly disclaims any warranties or responsibility or damages associated with or arising out of information provided.

Subscribe to Our Newsletter

Thank you for subscribing!

Ready to give us a try?