Rescinding a Job Offer After a Background Check

by Mammoth Team on January 28, 2016

rescinded-offer.jpgYou’ve found the perfect candidate - their resume matches the job description, they interviewed well, and you’ve just made the offer. And then, the background check results come in, and you want to retract the offer. What can you do?

First, Check Your Offer Letter

If you use a third party report or background check, make sure you  followed the procedures of the Fair Credit Reporting Act (FCRA). Under FCRA you are required to give written notice and get authorization before you solicit the information from the third party vendor. A job offer letter that includes language indicating that the offer is conditional -- and may be retracted based on the results of a background check -- can help protect you.  If you are not currently using such a letter, we recommend that you do so in the future.

Notify the Applicant

Under FCRA rules, in order to rescind the offer you will need to provide the applicant with an adverse action notification (which is a description of the person’s rights under the FCRA and contact information on the organization that provided the report). Your background screening provider will likely have a notification form to send to applicants when an adverse decision is made. This will allow the applicant to see the information being reported and give him or her a chance to correct inaccuracies with the reporting company.   

Know the Laws

Before you make the final decision to rescind the candidate's offer, however, it is important to know your state's laws on the use of arrest and conviction records in making employment decisions. Many states, for example, have limitations on the use of those records, such as not allowing private employers to use arrest records that did not lead to a conviction as a factor in determining any condition of employment.   

Even in states that allow the use of arrest or conviction records for employment purposes, private employers should be cautious when considering whether to use them. An arrest might never result in a criminal guilty plea or conviction, and it is always possible that a person has been arrested for something he or she did not do. Moreover, the federal Equal Employment Opportunity Commission (EEOC) has stated that use of conviction records might be discriminatory given that minorities are often more likely to have such a record. The EEOC cautions that employers should 1) only inquire about felony convictions, 2) state that a criminal record does not automatically bar employment, and 3) ensure that there is a legitimate business reason for requesting such information.

To learn more about the recruiting and hiring process, watch our recent webinar “Hire Right the First Time: 4 Steps to Successful Recruiting & Interviewing.”


Topics: Compliance