Two notices and a pause stand between a failed check and a rescinded offer. Send the pre-adverse notice with the report, wait for a response, then send the final adverse action notice only if the decision stands.
The short answer: two notices, a pause, then the decision
Before adverse action based on a consumer report, you must give the applicant a copy of the report and a written description of their FCRA rights (15 U.S.C. 1681b(b)(3)(A)). The FTC says the notice includes the report and "A Summary of Your Rights Under the Fair Credit Reporting Act." What happens when an offer is rescinded after a background check covers the candidate side.
Step 1: Pre-adverse action notice
Send the report, the rights summary, and a plain statement that you are considering withdrawing the offer. Give a named contact and a deadline.
Step 2: Wait and review the candidate's response
The FCRA sets no waiting period. A June 27, 1997 FTC staff letter (Weisberg) said five business days appears reasonable and that the facts may require a different time. The Florida Bar Journal notes one court held eight business days reasonable.
Use the pause to check the record. EEOC guidance from April 25, 2012 says to weigh the offense's nature and gravity, the time elapsed, and the job. Tell the person they may be excluded, let them respond, and consider their answer.
Step 3: Final adverse action notice
The final notice can be oral, written or electronic. It must give the agency's name, address and phone (toll-free if nationwide), state that the agency did not decide and cannot explain why, and explain the right to a free report within 60 days and the right to dispute accuracy (15 U.S.C. 1681m(a)).
Stricter rules in California and New York City
California employers with five or more employees must make an individualized assessment of the same three factors. The written preliminary decision must name the disqualifying convictions, include the conviction history report, and explain the right to respond. Applicants get at least five business days, plus five more if they dispute accuracy in writing. The final decision must state any reconsideration procedure.
New York City allows criminal checks only after a conditional offer. Before withdrawing, give a full copy of everything relied on, a written Fair Chance Analysis under Article 23-A, and at least five business days to respond.
Credit reports have their own limits. Can a job offer be rescinded after a credit check covers those.
Lower your risk
- Say in the offer letter that the offer is contingent on the check.
- Apply the same criteria to every candidate.
- Keep application and hiring records for one year from the record or decision, whichever is later (29 CFR 1602.14).
- Take care when the candidate has already resigned. In Grouse v. Group Health Plan (Minn. 1981), a pharmacist who quit recovered damages when an at-will offer was withdrawn.
Can you rescind an offer after a reference check covers that version of the decision. Document the reason, and use AI Candidate Evaluation so the skills decision is on record before the check runs.
State and city rules vary, and this is not legal advice.