5 Questions to Test Your FCRA Adverse Action Smarts

Test Your Smarts

Are you up to speed on adverse action? HR and hiring managers need to understand the rules and requirements of the adverse action process in order to maintain a hiring approach that is fair to applicants and avoids unintended discrimination. We put together a few questions to check your knowledge and keep you sharp.

Start here, then head over to our Practical Guide to FCRA Adverse Action in Hiring to learn more about crafting an adverse action process that works.

Test yourself:

1. Is the Fair Credit Reporting Act (FCRA) adverse action protocol ALWAYS applicable if you want to exclude an applicant?

____ Yes, FCRA protocols must be followed anytime you intend to exclude someone.

____ No, the adverse action protocol is not required if the decision to exclude is not based on information provided by a third-party consumer reporting agency.

____ No, because employers have the right to exclude an applicant without explanation.


Answer: No, FCRA protocols are only mandated if a third-party provider supplies the background information that is used to exclude. That said, many experts advise that regardless of where you get the information used to make an adverse hiring decision, you follow a similar process.

2. What do Ban the Box laws and the individualized assessment required by the Equal Employment Opportunity Commission (EEOC) have in common?

____ The requirements apply only to criminal conviction records

____ Both prohibit the use of criminal background records that are 7 or more years old.

____ Both aim to eliminate the use of blanket exclusions based on felony criminal activity.


Answer: Both aim to eliminate the use of blanket exclusions regarding criminal background. The reason is to reduce unfair exclusion of applicants from jobs based on possibly irrelevant criteria. The point being that, even with a serious prior criminal history, candidates can make qualified employees. Note that the first answer, “both apply only to conviction records” is incorrect because these requirements apply to arrest AND conviction records.

3. It’s convenient and helpful to the applicant to include a section on the employment application to get their permission to do a background check.

____ True

____ False


Answer: False. The permission for a background check must be on a separate standalone form.

4. If an applicant has a felony conviction (and you know the data is accurate), it’s okay to exclude them from further consideration on that basis.

____ True

____ False


Answer: False.  Exclusion based on a felony conviction must be job related and a business necessity and must pass the “Green Factors” test and EEOC Guidance. The EEOC guidelines require an individualized assessment be done for individuals with felony convictions in certain circumstances. Many Ban the Box laws also require individualized assessments.

5. Does a state or local Ban the Box law replace the national FCRA regulations on adverse action?

____ Yes, a Ban the Box law replaces FCRA for criminal background checks.

____ Yes, but only for pre-adverse action notification procedures.

____ No, compliance with FCRA protocols are also required in addition to any Ban the Box requirements.


Answer: FCRA adverse action protocols are required whenever exclusion is based on third-party background checks. However, Ban the Box laws can impose more stringent or additional requirements on taking adverse action.


How did you do? Are you confident in your processes and in your ability to guide an applicant through the adverse action process? Our new guide, A Practical Guide to FCRA Adverse Action in Hiring is designed to help you avoid unintentional discrimination and promote fairness in your hiring process. Get your copy here.


About MichaelGaul

Michael is a results-oriented marketing executive with over two decades of experience in employment screening, physical security, and business process management. Michael has deep experience in human capital risk management and a passion for educating business leaders and HR professionals on strategies that tangibly protect their interests. Michael serves on the Board of the Secure Cash and Transport Association (SCTA) and is a member of the Professional Background Screening Association (PBSA), and the American Society of Industrial Security (ASIS).
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