Adverse Action
The formal process an employer must follow when making a negative hiring decision based on background verification findings.
Adverse action is the formal procedure that employers should follow when they decide not to hire a candidate (or to terminate an employee) based wholly or partly on information revealed in a background verification report. In India, while not yet codified in a single statute, the adverse action procedure is considered best practice under general employment law principles and is becoming increasingly important under the DPDP Act 2023.
A compliant adverse action procedure includes: (1) notifying the candidate in writing of the adverse finding, (2) providing the candidate with a copy of the background verification report, (3) giving the candidate a reasonable time period to dispute the findings or provide additional explanation, and (4) making the final hiring decision after considering the candidate's response.
Skipping the adverse action procedure can expose employers to wrongful rejection claims and DPDP Act violations.
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Related Terms
Background Verification (BGV)
The process of independently confirming information provided by a job applicant, including identity, education, employment history, and criminal record.
Discrepancy Report
A verified finding in a background check report where the candidate's claimed information does not match what was independently confirmed.
Candidate Consent
The explicit, informed permission obtained from a job applicant before collecting and processing their personal data for background verification purposes.