Last Updated: October 15, 2021
Finding a candidate fit for the job is harder than you think. But what if you decide to extend a job offer only to receive bad news? After a background check, you realize that the candidate’s rap sheet is quite long. This article addresses what a business owner should know and do when dealing with a failed background check after a job offer.
The Wrong Candidate and Your Business
As a business owner, your priority is to protect your business and employees from dangerous job applicants, as well as litigation that may occur if you mismanage the hiring process. Note some effects of hiring the wrong candidate:
Hiring the wrong candidate can jeopardize your business
Hiring a candidate with a bad past can have long-term, negative effects on your business. And finding new investors and attracting new candidates can be quite difficult after hiring the wrong candidate.
Hiring an unsuitable candidate can affect the company’s culture
Each workplace requires a relaxing atmosphere for the employer and employee. But if you hire a person who is the wrong fit for the organization, it can only cause distress and shake the company to its core. For instance, if you hire a candidate whose education background check failed and has a criminal history, it can affect the work environment.
Hiring a candidate with a bad past
Hiring someone with a sketchy past can affect workplace safety. Not everyone feels comfortable working with a candidate that poses some sort of threat not only to the company but to society, as well.
Financial side effects
If the candidate you want to hire was charged in the past with felony theft, it should immediately raise red flags. Depending on the business, hiring such a candidate can lead to theft of all sorts from the office or even colleagues.
|NOTE: Criminal background checks have become standard procedure, especially if your company deals with such vulnerable populations as the elderly or children.|
Determining a Failed Background Check
Are negative hits on a background check relevant to you? As a business owner, if you’ve determined that a background check failed, what do you do?
Create a Fair Hiring Policy
First, you need to make a distinction between what qualifies as acceptable and what is unacceptable for a job vacancy. Employers tend to ask questions about the candidate’s past employment, as well as about their financial and criminal history. But at the same time, the employer needs to follow the laws and regulations that protect the candidate’s rights.
The U.S. Equal Employment Opportunity Commission (EEOC) is a federal agency established with The Civil Rights Act of 1964 to protect candidates’ rights against workplace discrimination—no matter their race, national origin, sex, color, religion, disability, or age.
It’s illegal to rescind an offer of employment if the candidate of one ethnicity has a criminal history and fails the background check but another candidate from a different ethnicity with the same criminal record gets the job. The same criteria apply if you, for example, interview an underqualified male candidate and a qualified female candidate and decide to hire the male candidate simply because he’s a male and the job requires more physical strength.
The Society for Human Resource Management (SHRM) provides advice on how to withdraw an offer due to an applicant’s criminal history. You need to stay current with state laws and regulations. For instance, ban-the-box laws—which forbids employers from asking about a person’s criminal history on a job application—have been accepted in 33 states. This law aims at removing barriers to employment for ex-offenders and allows them to be evaluated based on their qualifications so that an employer doesn’t immediately rescind a job offer.
A hiring matrix is a great tool to use for objectively identifying the best candidates for employment. To avoid unintended bias, job qualifications should be concise—without ambiguities—and equally applied to all candidates.
Assess Applicants Individually
In 2012, the EEOC added the requirement of individualized assessment. Each candidate is to be individually assessed to avoid any potential discrimination—if by chance there is a failed employment background check. If a candidate has had a faulty past, hiring managers are urged to consider the age of the candidate, the time of any criminal offense, and the rehabilitation efforts of the candidate. The manager should also consider employment history before and after an offense, as well as character references.
Background Check Problems
In some cases, the background check on a screening report may not belong to your candidate. It’s rare, but an employer may get a false positive between the recipient of a background check and a convicted felon bearing the same name. For that reason, double-check with the company that did the background check and make sure the company complies with the applicable laws.
Even if you have a gut feeling about a candidate, the employee screening policy may reveal otherwise. If you’re considering not hiring the candidate after a failed background check, it’s best to notify the applicant with a pre-adverse notice and a copy of the background check, as well as a copy of A Summary of Your Rights Under FCRA.
|NOTE: To help find the right candidate for the job, you can conduct a background check through certain websites for background checks.|
|Hiring a candidate with a bad past could affect workplace safety and jeopardize your business.|
|Create a fair hiring policy that follows the state laws and regulations.|
|Create a hiring matrix, so each candidate is equally assessed.|
|Before rescinding a job offer, inform the candidate with a pre-adverse notice.|
Rescind a Job Offer
Before deciding to take any adverse action, an employer needs to reconsider all the facts and consult with the internal policies of your company. These five steps should help when deciding what to do with candidates who have a failed background check after a job offer.
Consult Your Hiring Policy
If you have a candidate with a risky background, you should consult your hiring policies, which should describe the circumstances under which an offer of employment can be affected by the background check results.
Consider How Long It Has Been Since a Candidate’s Last Criminal Charge
Before hiring those with a criminal history, you should consider the type of offense committed, when it was committed, and any rehabilitation measures taken by the applicant.
Allow the Candidate to Respond
Not every candidate is aware that the information in their background could impact their employment. Even if there is a criminal history, you should give candidates time to prepare a response and make a case for themselves. Many companies give the applicant around five days to prepare a response.
Carefully Make a Decision
To retract a job offer after a background check is not an easy task to do, especially if the candidate is a great fit for the company. So before you proceed with rescinding a job offer, take everything into account—consult resources to ensure you’ve covered all the bases, including hiring policies, legal counsel, and any laws that apply to your industry.
Hire or Send an Adverse Action Notice
Take the time to carefully examine all the information before making a final decision. If you decide to proceed with the hiring process, simply contact the candidate and inform him of the good news. But if you decide to rescind a job offer after a background check, then send the candidate an adverse action notice.
|NOTE: 72% of employers conduct a background check on candidates as a part of the hiring process. But they need to know what to look for in a background check for the best results.|
Adverse Action Notice
An adverse action notice is used to inform candidates that they have been denied the job they applied for. When withdrawing an offer, due to a background check, employers need to retract the offer in writing with an adverse action notice. The written statement should pinpoint the reasons behind the decision (because the background check failed) and abide by the legal guidelines of the FCRA and EEOC.
The employer should also provide the candidate a copy of the background check, as well as the company’s information that conducted the background check. Furthermore, the employer needs to notify the candidate that the decision was made by the employer and not the background check company. Carefully examine the document and strictly follow the rules when you decide to rescind a job offer after a background check.
|NOTE: Job posting sites exist for those looking for candidates online. Many of the sites have a huge resume database.|
Background checks serve a crucial role when hiring candidates. While they can reveal some negative hits or results and raise red flags, it doesn’t always mean a firm refusal for the candidate. You need to carefully examine what is legal and what is not and base your decisions using fair hiring policies and individualized assessments. If the employer decides to retract a job offer after a failed background check, the candidate should be notified with an adverse action notice.
As an employer, sometimes you need to withdraw a job offer, due to the results of a background check. The best way to inform the candidate is by sending a pre-adverse notice, giving them time to respond. If the response is not acceptable, send an adverse action notice.
Usually, it means that they’ll need to find a new job since most employers decide to rescind a job offer after a failed background check. But each company has different policies.
Employers need to comply with the U.S. Equal Employment Opportunity Commission (EEOC) and Fair Credit Reporting Act (FCRA). Some states abide by the ban-the-box law, which may impact the employee screening process.
A failed background check after a job offer is not common, but around 3% fail them. There are no government statistics as to how many candidates fail their background checks.