Policy
Conditional Offer First, Then Two Notices Before You Reject
Ask nothing about criminal history before a conditional offer: California requires that, other fair-chance laws set their own point, and the conditional offer is the safe default everywhere. Then a standalone written disclosure and the candidate's written authorization, then the background check. If what comes back would change the decision, send a pre-adverse notice with the report and the summary of rights, leave a real interval to dispute it, then the final notice.
The takeThe five business day rule is the tell. It sits on most vendor compliance pages as though it came from the statute, and it did not: the federal text names no period at all. California does set five business days for a candidate to answer a state preliminary notice, plus five more for gathering evidence to dispute it, which is a different clock in a different statute. A page confident about that one is a page whose other confident sentences are worth checking against the source before your process inherits them.
Where Olive fits
Open a role and see what the work shows
A candidate cannot correct a decision whose basis they never saw. Olive produces no composite and no automated decision at all: a person writes each of the six findings, every one carries the excerpt it rests on, and the candidate is granted the identical report, free, on every tier.
Rank your shortlistWhen can you run a background check?
After a conditional offer, in practice, and under some fair-chance laws that is a legal requirement rather than a courtesy. California makes it an unlawful employment practice for an employer with five or more employees to inquire into or consider an applicant's conviction history until after a conditional offer has been made, and bars the question from the application form outright 1. Fair-chance laws elsewhere set that point differently, so where one applies, counsel sets the order.
That makes the conditional offer a legal instrument with a date on it. It has to be an actual offer, made at an identifiable point, and your process needs to say where that point is. If the answer today is "somewhere around the final round," the sequence underneath it cannot be defended, because there is no before and after to point at.
The federal layer is separate, and it sets no timing at all: it governs how the check is ordered. Under 15 U.S.C. 1681b(b)(2), an employer may not procure a consumer report for employment purposes without a clear and conspicuous written disclosure in a document that consists solely of that disclosure, plus the candidate's written authorization 2. The words *consists solely of* are the litigated part: folding a liability waiver, a state-law notice or a paragraph of the application into the same page is the standard defect in the case law.
Employment and education verification is a different product with a different risk profile, and it is worth separating in your own head from criminal history, because what a verification actually confirms is much narrower than what a conviction search returns. Both may arrive from the same vendor on the same report. Only one of them is what fair-chance law is about.
What has to happen before you reject someone over a background check?
Two notices about the report, with a real gap between them. Outside a narrow transportation carve-out, federal law requires giving the candidate a copy of the report and a written description of their FCRA rights before taking any adverse action based in whole or in part on that report 2. After the decision, a second notice names the company that sold the report, says it did not make the call, and states the right to dispute it 4.
The joint FTC and EEOC guidance for employers spells out what each notice contains, in language a non-lawyer can work from: the pre-adverse notice carries the report and the prescribed Summary of Your Rights, and the post-action notice carries the source, the disclaimer that the seller did not decide, and the right to dispute and obtain another free copy within 60 days 4. That guidance dates from 2014 and guidance is the most easily withdrawn form of federal instruction, so date any citation of it and check it is still posted.
Adverse action is broader than a final rejection. The statute defines it as a denial of employment or any other decision for employment purposes that adversely affects a current or prospective employee, so pausing a start date or withdrawing somebody from consideration on the strength of a report is inside the definition 3. Teams that read it as "the rejection email" send one notice instead of two. That carve-out covers transportation applications handled entirely by mail, telephone or computer: the disclosure may be oral or electronic, and the two notices collapse into a single notice within three business days of the action 2.
Local law then stacks on top of the federal floor with its own content and its own deadlines. California requires an individualized assessment weighing the nature and gravity of the offense, the time that has passed since the offense and the completion of the sentence, and the nature of the job, and requires the preliminary notice to identify the disqualifying conviction, attach the conviction history report and explain the right to respond 1. New York City and Los Angeles run their own versions. A single national checklist cannot be right in all of them.
Which third parties pull you into the same sequence?
Any third party that returns a judgment about a person, whatever the product is called. The federal guidance addresses background information obtained through a company in the business of compiling background information 4, which is a description of what a vendor does rather than a category it sells itself under. A tool that returns a risk flag or a rating on an applicant can therefore sit inside the same duties as a criminal search.
So the useful exercise is an inventory. Write down every outside party that receives a candidate's identity and sends back something that shapes the decision: the criminal and employment vendor, the education registry, the drug screen, the credential check, and any assessment or scoring product bought by a different team on a different budget line. Then ask, for each, who compiled the information and whether it was compiled for the purpose of furnishing reports to employers.
That second question is where an AI screening product gets interesting, and it is genuinely unsettled: whether a vendor's candidate score is a consumer report is still an open question, and the answer decides whether every rejection needs two notices. This is a counsel question and it is worth asking before a tool goes live.
The cheap version of the inventory is one column added to whatever vendor list procurement already keeps: does this vendor return information *about a specific person* that a human then acts on. Everything with a yes in that column belongs in the same conversation, even if nobody in the building has ever called it a background check.
Treat the waiting period as the candidate's time
The interval exists so the candidate can correct an error, which means the clock belongs to them. Federal law names no waiting period between the two notices: the FTC's stated position, quoted in the CFPB's 2019 market snapshot, is that some reasonable period must elapse and the minimum will vary with the circumstances, and one screening company told the Bureau it defaults to a 7-day gap 5.
Nothing exotic is required to produce a wrong report. The same CFPB snapshot names mismatches, possibly from reliance on non-unique identifiers, as one route to an inaccurate report, and notes that insufficient, common or erroneous identifiers increase false positives 5. A common name and a missing middle name is the whole mechanism. Separately, a 2016 survey of state reporting jurisdictions cited in the same report found that across 50 states and Guam an average of 68 percent of arrests in state databases have final dispositions recorded 5, so a hit with no outcome attached often means the database never recorded one.
Which is exactly where the EEOC's 2012 enforcement guidance lands: the fact of an arrest does not establish that criminal conduct occurred, and an exclusion based on an arrest by itself is not job related and consistent with business necessity, though an employer may act on the underlying conduct where that conduct makes the person unfit for the position 6. That is the Commission's litigating position rather than a regulation, and courts are not bound by it.
In practice: give a real window, put a name and a way to reach a person in the notice, and hold the requisition open while it runs. A dispute that arrives after the final notice costs more than the wait would have, and a candidate who was told nothing about why is the one who asks afterwards what they are owed. None of this is legal advice; the order above is public legal fact and your jurisdiction's version belongs with counsel.
Common questions
Does the FCRA require a five business day wait before adverse action?
No. The federal statute names no period at all between the pre-adverse notice and the adverse action, and the FTC's position is that some reasonable period must elapse with the minimum varying by circumstance. Five business days is a widespread industry convention, not a safe harbour. California's fair chance law does set five business days for a candidate to respond, plus five more if they are gathering evidence to dispute the report's accuracy, and other localities set their own windows. So the honest answer for any specific employer depends on the jurisdiction.
Can you ask about criminal history on the application form?
In California, no: the question may not appear on any application form before a conditional offer, for employers with five or more employees. Many other states and cities run similar fair-chance rules, with different employer thresholds and different timing. A single national application form has to satisfy the strictest jurisdiction it reaches, so the safest version drops the question everywhere. If your form still carries it, that is the fastest thing on this page to fix.
What makes a disclosure standalone?
It is its own document and contains nothing but the disclosure that a consumer report may be obtained for employment purposes. The federal text says the disclosure must be in a document that consists solely of it, and that phrase is what most litigation in this area turns on. Adding a liability release, a state notice, an at-will acknowledgment or the rest of the application packet to the same page is the common defect. The candidate's written authorization may sit on the same document; other content may not.
Does an employer's own phone call to a former manager trigger these notices?
Not the FCRA ones. The employment provisions govern reports procured from a third-party consumer reporting agency, so a recruiter who calls a former colleague directly is outside them. That is a real difference in kind, and it is worth knowing which of your checks fall on each side: the same report often bundles a vendor-compiled criminal search with vendor-compiled employment dates, and the duty follows whoever compiled the information. State law can differ, and a firm engaged to gather opinions about a candidate is a separate category worth asking counsel about.
What do you do when a report shows an arrest with no conviction?
Do not treat it as evidence of conduct. The EEOC's position is that an arrest by itself does not establish that criminal conduct occurred and cannot support an exclusion on its own, though the underlying conduct can be considered where it makes someone unfit for the specific job. That position is the Commission's litigating stance rather than a regulation, and courts are not bound by it. Given how many state records never receive a final disposition, an open-looking entry is often an incomplete file rather than an open case.
References
- 1. California Government Code Section 12952 (Fair Chance Act) leginfo.legislature.ca.gov Supports the California requirements quoted here: no conviction-history question on the application or before a conditional offer for employers with five or more employees, the individualized assessment factors, the contents of the preliminary notice, and the five business days to respond plus five more when disputing accuracy.
- 2. 15 U.S. Code Sec. 1681b - Permissible purposes of consumer reports law.cornell.edu Supports the standalone-disclosure and written-authorization requirement at (b)(2), the pre-adverse action duty to supply a copy of the report and a description of rights at (b)(3), and the narrow transportation carve-outs at (b)(2)(B) and (b)(3)(B).
- 3. 15 U.S. Code Sec. 1681a - Definitions; rules of construction law.cornell.edu Supports the definition of adverse action at (k)(1)(B)(ii): a denial of employment or any other decision for employment purposes that adversely affects any current or prospective employee.
- 4. Background Checks: What Employers Need to Know ftc.gov Supports the contents of both notices, the 60-day right to a further free copy, and the guidance's framing in terms of background information obtained through a company in the business of compiling it.
- 5. Market Snapshot: Background Screening Reports files.consumerfinance.gov Supports the claim that the FTC prescribes no fixed waiting period, that one screening company defaults to a 7-day gap, that mismatches from non-unique identifiers drive inaccurate reports, and the cited 2016 survey finding 68 percent of arrests in state databases carry final dispositions.
- 6. Enforcement Guidance on the Consideration of Arrest and Conviction Records in Employment Decisions under Title VII of the Civil Rights Act of 1964 eeoc.gov Supports the claim that an arrest alone does not establish criminal conduct and cannot by itself justify an exclusion, while the underlying conduct may be considered where it makes the person unfit for the position.
6 sources, numbered by first appearance. How Olive sources claims
General guidance, not legal advice. Hiring rules differ by state and country and change often; check anything here against your own counsel before you act on it.
Olive assesses how a person works with AI. It does not detect AI-written documents, and it never produces a score, a ranking, or a match percentage for a person. Candidates read the same report the employer reads.