When information in a background report may lead an employer not to hire, promote, or retain someone, the Fair Credit Reporting Act (FCRA) requires a two-step process. Skipping a step, combining the notices, or rushing the timeline are among the most common reasons employers face FCRA claims.

Step 1: The pre-adverse action notice

Before taking adverse action based in whole or in part on a consumer report, the employer must give the individual:

• A copy of the consumer report being relied on, and
• A Summary of Your Rights Under the Fair Credit Reporting Act.

The purpose is to give the individual a real opportunity to review the report and to point out errors or provide context before the decision is final.

The waiting period

The FCRA does not set a specific number of days between the two notices, but the waiting period must be reasonable. Many employers wait at least five business days. Some state and local laws set their own minimums. New York City, for example, now requires a five-business-day period under its amended Fair Chance Act rules. Check the requirements that apply where you hire.

Step 2: The final adverse action notice

If the employer goes forward with the decision after the waiting period, it must send a final adverse action notice. That notice includes:

• The name, address, and phone number of the consumer reporting agency that provided the report
• A statement that the agency did not make the decision and cannot explain why it was made
• Notice of the individual’s right to a free copy of the report from the agency within 60 days
• Notice of the individual’s right to dispute the accuracy or completeness of the information with the agency

Why technical details matter

Courts continue to take notice requirements seriously. A California appellate decision issued in 2026 held that even a technical notice defect can support a lawsuit under state law without proof of actual harm (Littler: California Courts of Appeal Split on FCRA Standing). Using consistent, reviewed templates and following the same sequence every time is the best protection.

Horizon provides employer clients with practical adverse-action guidance and sample resources. See our Employment Screening Compliance Resources.

General information only — confirm your specific process with qualified employment counsel.

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