You ran a background check, and the results mean you’re ready to move on from a candidate. Before you send that rejection, federal law requires a specific two-step notice process — and skipping a step is one of the most common, and most expensive, mistakes employers make. This guide walks through exactly what to send, in what order, and how long to wait in between.
What the FCRA Requires Before You Deny Someone a Job Based on a Background Check
When you use a third-party company (a “consumer reporting agency,” or CRA) to run a background check on a job applicant or employee, that report is covered by the Fair Credit Reporting Act (FCRA). If you’re going to take “adverse action” — deny employment, rescind an offer, deny a promotion, or terminate someone — based even
partly on what’s in that report, the FCRA requires you to give the person a heads-up and a chance to respond before your decision is final.
This requirement comes from 15 U.S.C. § 1681b(b)(3), and it exists for a simple reason: background check reports contain errors more often than most employers assume. Mixed-up identities, outdated records, and court reporting delays are common. The notice process gives the candidate a real opportunity to catch a mistake
before it costs them a job.
The Two-Step Notice Process, In Order
Step 1: Send the Pre-Adverse Action Notice
Before you finalize anything, send the candidate a pre-adverse action notice. This isn’t a rejection—it’s a “here’s what we found, and here’s your chance to respond” notice. It must include:
- A copy of the background check report itself
- A copy of “A Summary of Your Rights Under the Fair Credit Reporting Act” (a standard document your CRA can provide)
The timing matters here as much as the content: this notice goes out before you make your final decision, not after. Treat it as a genuine pause point, not a formality on the way to a decision you’ve already made.
Step 2: Wait a Reasonable Period
The FCRA doesn’t specify an exact number of days you have to wait between the pre-adverse notice and the final adverse action notice. There’s no statutory countdown built into the law itself. What courts and the Consumer Financial Protection Bureau (CFPB) have consistently focused on is whether the applicant had a reasonable opportunity to review the report and respond.
In practice, most employers and background check companies use five business days as their standard waiting period. It’s become an industry convention because it’s generally seen as enough time for a candidate to receive the notice, review the report, and reach out if something’s wrong—without dragging out the hiring process indefinitely.
Some employers wait longer, particularly if notices are mailed rather than delivered electronically. What you shouldn’t do is treat any waiting period as optional.
Step 3: Send the Adverse Action Notice
If the waiting period passes and nothing has changed your decision, you can move forward with the final adverse action notice.
This notice must include:
- The name, address, and phone number of the CRA that furnished the report
- A statement that the CRA did not make the hiring decision and can’t explain the specific reason for it
- Notice of the candidate’s right to dispute the accuracy or completeness of the report with the CRA
- Notice of the candidate’s right to a free copy of the report from the CRA within 60 days
How Long Should You Actually Wait Before Sending the Adverse Action Notice?
Five business days is the widely used benchmark, and it’s a reasonable default for most hiring situations. It isn’t a hard legal floor or ceiling—it’s a practical standard that’s held up well because it balances the candidate’s right to respond against an employer’s need to keep hiring moving.
If you have reason to believe a candidate needs more time (for example, they’ve told you they’re gathering documentation to dispute something), extending the waiting period costs you little and reduces your risk considerably.
The Full Process at a Glance
- Receive the background check report from your CRA.
- Review it internally against your hiring criteria before taking any action.
- Send the pre-adverse action notice, including the report and the Summary of Rights.
- Wait a reasonable period—typically five business days—for a response.
- If no dispute changes the outcome, send the adverse action notice with all required disclosures.
- Document every step, including dates sent and delivery method.
The Most Common Mistakes Employers Make
Acting Before the Waiting Period Ends
Sending a rejection letter three days after the pre-adverse notice, before the candidate has had a real chance to respond, undercuts the entire purpose of the process.
Leaving Out the Summary of Rights
Sending just the report without this document is a common and easily avoidable gap.
Using Informal Language Instead of Proper Notices
Telling a candidate over the phone or by email that “you failed the background check” isn’t a substitute for the required written notices—and can create its own problems if it happens before the pre-adverse notice goes out.
Not Documenting the Process
If you can’t show when notices were sent and what they contained, you’re exposed even if you actually did everything correctly.
Treating the Pre-Adverse Notice as a Formality
If a candidate disputes something during the waiting period and you don’t genuinely reconsider, you’ve followed the letter of the process without its intent.
What Happens If You Get This Wrong
The FCRA allows for statutory damages, generally between $100 and $1,000 per violation, along with potential punitive damages and attorney’s fees for willful violations.
Because the same notice process applies to every applicant an employer screens, a systemic gap—like a company-wide practice of skipping the waiting period—can turn into class action exposure quickly.
This isn’t a reason to panic about running background checks; it’s a reason to make sure your process is consistent and well-documented.
Adverse Action vs. Simply Not Moving Forward
Not every rejected candidate triggers this process.
Adverse action notices are required specifically when your decision is based, in whole or in part, on information in a background check report. If you’re passing on a candidate because another applicant was a stronger fit, the role was filled, or for reasons unrelated to the report, the FCRA notice requirements don’t apply.
The distinction matters because it’s easy to blur the two in practice. If a background check result is even a partial factor in your decision, treat it as adverse action and follow the full process—it’s the safer default when the reasoning is mixed.
Don’t Forget State and Local Law
The FCRA is the federal baseline, but it’s not the whole picture.
Many states and cities layer on additional requirements, including:
- Ban-the-box rules limiting when you can ask about criminal history
- Individualized assessment mandates requiring you to weigh the nature and age of an offense against the job itself
- Extended notice periods beyond the federal standard
This guide covers the federal process only; check your state and local requirements before finalizing your own policy.
Frequently Asked Questions
How long do I have to wait after sending a pre-adverse action letter?
The FCRA doesn’t set an exact number of days. Five business days is the common industry practice, based on what courts and the CFPB have treated as a reasonable window for a candidate to respond.
Can I tell a candidate they “failed” a background check?
Informal language like this isn’t a substitute for the required written notices, and using it before the pre-adverse notice goes out can undermine the process. Stick to the formal notices and let those documents do the communicating.
What has to be in the Summary of Rights?
It’s a standard document, “A Summary of Your Rights Under the Fair Credit Reporting Act,” that your CRA provides. You include it as-is alongside the pre-adverse notice; it’s not something you draft yourself.
Do I need to send adverse action notices for every rejected candidate?
Only when the background check report was a factor in the decision. Rejections for unrelated reasons don’t trigger the FCRA process.
What if the candidate disputes the report during the waiting period?
Pause and genuinely reconsider. If the dispute changes the facts, your decision may need to change with it. If it doesn’t, you can proceed to the adverse action notice once the waiting period has passed.
Build a Process You Don’t Have to Think Twice About
A consistent, well-documented adverse action process protects your business as much as it protects your candidates.
If you’d like help building notices, templates, and a workflow that fits how your team actually hires, ScreeningWise can walk through it with you.
This content is for general informational purposes only and is not legal advice. Employers should consult qualified legal counsel to address their specific compliance obligations.
