The Employer's Guide To Background Check Adjudication

After you have completed your background checks on a prospective employee, you must decide whether or not to hire them. In many organizations, the decision is usually made through adjudication. Learn more about it here. 

What does adjudication mean?

Background adjudication is the process of reviewing the results of the background screening against your company’s hiring criteria and policies. This will help employers decide whether or not to officially hire the candidate. 

For example, you are hiring someone who’ll handle company finances. By law, you may be required to run a credit check on them to help minimize the risk of theft and fraud. Now, a background check revealed that the candidate has an income-to-debt ratio of 20%, which is greater than the 10% that your policy can accept. Hence, even if the candidate has relevant experience and seems to have competent skills, you’re not going to hire them based on your policy. 

Why Do Employers Need An Adjudication Process?

It may seem like an extra step after completing a comprehensive background screening for all the candidates you may hire, but background adjudication is crucial to help ensure efficiency, compliance, fairness, and consistency. 

Efficiency

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Reviewing the results of screening side by side with your company policies make your hiring process more efficient. With policies and criteria in place, you can minimize errors in the employment process. It also helps your organization save time and money because you’ll immediately know which candidates to hire. Thus, you can focus on only the suitable applicants. This is particularly important for big companies who conduct mass hiring. 

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Compliance

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Background adjudication helps your company comply with the laws and regulations on screening. 

For instance, in the UK, there are several levels of criminal history checks or DBS. Many roles only allow you the basic check, which reviews a candidate’s unspent convictions and conditional cautions. However, for roles in the education and healthcare sectors, the law permits a more in depth look at their criminal history to help ensure client and public safety. 

Fairness

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Background adjudication helps ensure that hiring criteria and policies are applied to all applicants of the same position. This prevents hiring managers from making decisions based on their own biases. 

Also, please note that adjudication helps your organization comply with laws that prevent discrimination. One such law in the US is the Equal Employment Opportunity Act which states that no applicant must be discriminated against based on their protected characteristics, such as genetics, age, disability, race, and religion. 

Consistency

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Background adjudication supports consistency in the hiring criteria, particularly for businesses with many locations across different states. 

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You see, state laws may differ when it comes to what background checks or level of inquiry is allowed. However, some laws are the same, too. For example, the Ban the Box law is enforced in 36 states and at least 150 cities in the US. This law prohibits the employers from inquiring about an applicant’s criminal history early on in the hiring process. Companies must also only consider records that are relevant to the role and should not refuse employment based on criminal history alone.  

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With adjudication, you can more easily comply with these fair hiring policies.

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Documentation

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Lastly, remember that background adjudication puts your hiring processes and decisions in black and white. If, in the future, a candidate accuses you of discrimination or unfair treatment, you can easily defend your organization because you have documented the background checks you conducted, their results, and how the results are used based on your company’s hiring policies and criteria. 

What is adverse action?

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Let’s say you have completed all the relevant background checks, weighed the results based on your hiring policies and criteria, and decided not to employ the candidate. Then, the next step is to send the applicant an adverse action notice. 

An adverse action notice is sent in two steps: the pre-adverse action notice and the final adverse action. 

In the pre-adverse action notice, the company informs the applicant through a letter that they are considering not hiring them. The letter must include:

• A notice that the company considers an adverse action
• A copy of the report that caused the company to consider an adverse action
• Contact details of the consumer reporting agency should they wish to clarify or dispute certain information
• A summary of the applicant’s rights under the Fair Credit Reporting Act (FCRA)

In the US, FCRA helps ensure the accuracy and completeness of the information collected and presented by a consumer reporting agency that conducts background checks. Hence, it allows the candidate to access their information and correct any inaccuracies and incomplete details. 

After the pre-adverse action notice has been issued and the applicant has been given enough time to respond, your may now send the final adverse notice, which must include a notice that they will not be hired, a summary of the report you used to make your decision, and a summary of their rights under the FCRA. 

Best Practices to Optimize Your Adjudication Process

An effective or optimized background check adjudication can help enhance your hiring process, reduce personal biases, and save money since it improves time-to-hire, particularly when you collaborate with a third-party who can efficiently conduct background checks. 

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To help optimize your background check adjudication guidelines, the following best practices may help:

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Review your company’s hiring policies

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Your adjudication process will run more smoothly if your hiring criteria and policies are already in line with the relevant laws. It will also help to have clear standards - what background check results are deal breakers, which means they will readily eliminate the applicant from being considered for the role? 

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However, remember that your criteria should be relevant to the position you are hiring for. For instance, if someone applies for a cashier position, checking their motor vehicle report is irrelevant. 

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Be consistent throughout the process

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To avoid discrimination, please apply your criteria and policies to all applicants of the same role. Their protected characteristics, such as sex, color, race, and religion, should not have an impact on your policies and background checks. 

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Listen to your candidates

In the US, under the FCRA, it’s your legal obligation to allow candidates access to their information should they want to correct inaccurate or incomplete details. However, you can also listen to and allow them to give context to their records even before sending a pre-adverse action notice. This will give you better insight to their stories and foster rapport. 

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Partner with a third-party service provider who can conduct background checks

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Another way to optimize your background check adjudication is to collaborate with a consumer reporting agency who can efficiently conduct background checks on applicants. Reputable third-parties like Veremark can run the checks you require - you only need to provide the candidate name along with other details. Afterwards, we collect the information in compliance with the relevant laws and present the results clearly, which eliminates the need for you to dig into papers upon papers of background check findings. Needless to say, this makes background adjudication more efficient. 

Conclusion

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Background adjudication is the process of comparing the results of your background checks on a candidate with the company’s  criteria and policies to make hiring decisions. It helps you become more efficient, consistent, fair, and compliant to the relevant hiring laws and regulations.  

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