September 2021 Staffing Industry Update

Stay updated on the latest staffing industry trends through our monthly staffing update and on our staffing industry news page.

Here is a snapshot view of what is happening in the staffing industry and a few tips on proper processes to avoid risk when it comes to  Adverse Action.

What is Adverse Action?

An adverse action is any action an employer takes that negatively affects an employee, i.e., termination, reduced pay, reduced hours, demotion, etc.

Adverse actions are often warranted. Employees, after all, should face negative consequences for poor performance or misconduct. However, there is a risk whenever you take adverse action. For instance, the employee could claim that the action was taken for a discriminatory or other illegal reason.

You can minimize the risk of taking adverse action by clearly documenting its reason and respecting the affected employee.

Adverse Action on Background Screenings.

Adverse action also pertains to new hires. A company may make a contingent offer of employment to an applicant. But what happens if the background check comes back with some concerning results, and you would like to retract the offer? What steps should you take?

If a decision is made not to hire someone based on screening results, you must notify the person of adverse action, giving them the opportunity to dispute the results.

Listen to this 8-minute video where Sheri Tischer from Scale Funding talks with Alan Lasky from Universal Background about what’s new with Adverse Action and the importance of staffing agencies following the correct procedure to avoid litigation.

Click the download button below to access the PowerPoint presentation used for this video.

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Steps to take when retracting an offer after receiving background check results.

If you are using a third-party report or background check, you should have followed the Fair Credit Reporting Act (FCRA) procedures in obtaining the background check.

Under FCRA you are required to:

  • Give written notice and get authorization before you solicit the information from the third-party vendor.
  • Provide a job offer letter that includes language indicating that the job offer is conditional and may be retracted based on the results of a background check.

To rescind the offer, under FCRA, you will need to:

  • Provide the applicant with an adverse action notification
  • Ask background screening providers to submit a notification form to applicants when an adverse decision is made.

Before you make the final decision to rescind the candidate’s offer, it is important to know your state’s laws on the use of arrest and conviction records in making employment decisions. Many states 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 considering using arrest or conviction records should do so with caution. 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 they did not do. Moreover, the federal Equal Employment Opportunity Commission (EEOC) has stated that the use of conviction records might be discriminatory given that minorities are often more likely to have such a record.Staffing agency background checks

The EEOC cautions that employers should:

  1. Only inquire about felony convictions.
  2. State that a criminal record does not automatically bar employment
  3. Ensure that there is a legitimate business reason for requesting such information.



Scale Funding’s HR Support Center with HR On-Demand

Was the above information useful? If so, something to consider is, Scale Funding provides complimentary HR support to all its customers. Scale Funding’s HR Support Center with HR On-Demand gives you any time access to online HR tools and documents, as well as live advice from our team of certified HR advisors.

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Here are 5 ideas for maintaining a safe work environment.

  1. Request your internal team review client worksite assessments and update annually, especially now that Covid must be considered.
  2. Do you have a thorough general safety orientation as part of your onboarding process?   What are your clients doing for safety and job-specific training?
  3. Host a Lunch and Learn or Breakfast for your client companies regarding Safety in the Workplace.   Tap into the knowledge of your insurance agent, underwriter, or safety director to be the subject matter expert.
  4. Include Safety tips in your employee or client newsletters.
  5. Engage your employees by sending out a Safety Quiz with the opportunity to be entered into a drawing for a prize.
Take our sample safety quiz and see if you are up to speed on safety in the workplace! 
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Related Articles:

Tips for keeping your worker’s comp coverage cost-effective

Safely Returning to Work amid Covid 19


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