Q&A with Tracepoint!

At Tracepoint, we build quality relationships with our clients by establishing and maintaining great communication.

As part of that communication, we would like to share with you some of the various questions that we’ve been asked by clients. By sharing the answer to someone else’s question, we might be able to answer yours!

Question: What should I do if an applicant has pending charges on their report? Can I consider these charges in making adverse employment decisions? If I do so, will I be violating the FCRA?

Answer: Great question! First, and most importantly, you need to know that the FCRA does permit employers to consider pending charges when making employment decisions in 48 states. (Illinois and Kentucky are the only two states that have exceptions to this rule and we will talk more about these two exceptions in a moment.) This means that if an applicant has pending charges on his or her record, you can consider that information when making an employment decision (hiring, firing, retention, promotion, transfers, decision not to hire, etc.)

However, the problem with pending charges is that they may result in a dismissal or non-guilty verdict! Because this may be the case, we advise that if you do decide not to hire an applicant based on a pending charge that you communicate to the applicant that if and when their pending charge(s) is removed due to a guilty verdict or case dismissal that you encourage them to re-apply at such time. This is certainly the fairest approach to dealing with applicants who have pending charges because they may in fact be innocent and could be your next great hire!

Another very important point to consider when dealing with applicants who have pending charges is issuing the pre-adverse and adverse action notices. If you decide to take adverse action against an applicant with pending charges, you still must issue them a pre-adverse action notice with a copy of their report and then an adverse action notice 5 business days later. Issuing a pre-adverse action notice and a copy of the report is imperative to give the applicant a chance to dispute any charges that may be incorrect. The pending charges could in fact be a clerical mistake, and if the applicant isn’t made aware of the charges, then he or she would not have the chance to dispute them.

Finally, as with all things FCRA related, there are exceptions to the rule. Illinois and Kentucky limit the use of considering pending charges in making employment decisions. When taking note of these exceptions, it is important to realize that these exceptions do not only apply to businesses operating in Illinois and Kentucky but may also apply to applicants with records from Illinois and Kentucky. So even if you are a business in California, you may be subject to these rules if the applicant has pending records in Illinois or Kentucky!