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An Employer's Guide to Background Checks

#background checks
by Jessica Elliott


Employee background checks are critical, especially during the hiring process. Over 28 million background checks were recorded in 2019 alone and more are expected in years to come. Organizations should take these tests seriously to ensure a safe and productive work environment, but there is a process that needs to be conducted properly in order for these tests to yield as beneficial results as possible.

Before carrying out background checks on candidates, employers should do the following:

  • Be consistent and have all candidates undergo similar screening.
  • Get legal advice from a lawyer on legal issues.
  • Allow candidates to clear up and reveal their past mistakes.
  • Only contact check agencies that are FCRA- compliant.
  • Don't ignore any background check.


What kind of background checks are there?

Background checks are either generally done during pre-employment or to those already employed at an organization - especially those candidates undergoing promotion.

The most common background checks done by employers include:

  • Criminal record checks

Criminal records indicate the minor and significant offenses one has committed in his past. An applicant's criminal history may affect organization safety and performance. For instance, a high level of transparency and trustworthiness is a requirement when employing a stock manager. An employer may not consider an applicant with a record of theft or proved in the past that he has little respect for other people’s property. In the same way, a bus service would not be likely to hire a driver with a DUI record in the past. 

  • Drug Screens

Employers carry out drug screens on candidates to ensure that the safety of other workers is not compromised. Individuals that rely heavily on drugs can create a harmful atmosphere in the workplace, especially if they are on their shift while under the influence. According to most employers, drug testing helps avoid attitude issues, violence, accidents, theft, delinquency, and reduced productivity. Drug tests are run during the pre-employment process and can also be run randomly during post-hire. However, in both cases, they must have consent from the individual.

Candidates that are likely to interact with teenagers or drive heavy machinery at their workplace are more likely to undertake drug testing to avoid liability issues.

  • Credit reports

A credit report is an analysis of the applicant's financial activities. It checks whether the applicant pays their bills and loans in a timely manner, and reveals if they are bankrupt or struggling to keep decent credit. Some employers prefer running a credit report to avoid theft, or poor management, primarily if the applicant handles finances.

Employees running down credit checks must adhere to the Fair Credit Reporting Act (FCRA) guidelines to avoid violating the candidate's privacy rights.

  • Driving records

Verification of the applicant's identity can be found through the database in their driving records. A driver's history will determine whether individuals are safe on the road or else the applicant will be risking other road users' lives. Individuals applying for delivery jobs have to be vetted well through the Professional License Verification to ensure that they have a valid driving license.

  • Verification of education

According to various reports, education and experience are the most misrepresented by applicants. Some of the curriculum vitae handed to employers may have false information about the applicant's education and experience. Even influential and respectable figures have in the past, given incorrect details about their academic and experiences. For instance, former Yahoo CEO Scott Thompson is on the record for getting fired after four months for providing falsified information about his college education. Verification of education details has in the past shown that 33% of resumes contain fraudulent degrees and inaccurate job descriptions.

  • Identity

Impersonation is widespread during recruitment processes. Identity search helps in proving that the candidate is the person he or she claims to be. Verification of the applicant's identity can be found through running a social security number search. The information provided by the Social Security Number Trace on the national database should confirm whether there is impersonation or not.

  • Sex offender registry

Sex offenders can't be allowed to work in an organization that deals with children. Hiring sex offenders put children and other people at work at the risk of being violated. Candidates likely to work in a job description whereby there will be a high level of interaction, e.g., educational institutions, are more likely to go through a sex offender background check for the safety of those they are dealing with. 

  • Credential verification

Credential verification involves confirmation of the validity of the certificates that potential employees claim in their application. Some applicants may attempt to give fake certifications to secure jobs they would not otherwise be qualified for. Running a check to verify the authenticity of an applicant's achievements could help avoid issues in the future. 

  • Reference checks

Reference checks are a type of background check which allows the company to learn more about the applicant through the perspective of their previous employers. This can be a valuable tool, since the manner in which someone's past employer thinks about them can be a good indication of how they will get along with people in the future. 

  • Terrorist watch list

The terrorist watch list is run to ensure that the applicants are not on the terrorists watch list in order to safeguard the rest of the employees from any possible terrorist threat. Neglecting such a check may cause legal issues for the company, should it be discovered.

  • Lie detector test

A lie detector is used for checking whether the applicant is lying by detecting body responses. The applicants experience emotional change, sweating, breathing patterns, and increased heart rate if they tell a lie during the test. Polygraphs are mostly used by investigative agencies when screening recruits.


Who can conduct employment background checks?

Some employers carry the background checks independently through their human resources, but others who don't want to navigate this tiresome process decide to use the emerging background check agencies' services.

Background check agencies carry out applicants' background screening. The Fair Credit Report Act, State laws, and other local laws regulate the screening process. The FCRA-authorized agencies are given access to all documents, and they compile reports for the employers to use while making hiring decisions.

Reasons to conduct background checks:

Reasons why employers conduct background checks, differ from one employer to another. Background testing can help to decrease the amount of job fraud from candidates when applying for jobs.

Employers conduct background checks to prevent theft and embezzlement of resources, improve the quality of hires, protect the company's reputation, adhere to the existing laws and regulations, and protect employees, customers, and the general public from workplace violence.

However, the majority of both small and large businesses conduct background checks to avoid liability. A small fee of $50 could prevent an employer from incurring a considerable lawsuit caused by negligence damages. This is a big reason why around 93% of employers conduct background and criminal checks on their candidates during the hiring process.


Legal steps involved in Background checks:

Employers should not use an employee background check to discriminate or mistreat applicants in any way. Rather, employers need to apply the same standard to everyone without exception to race, nationality, color, religion, or sex. Any background checks emanating from a disability should also be an exemption during the exercise.

It's a legal requirement to carry out a background check in some countries before hiring employees in certain sectors. For instance, driving instructors, police officers, racetrack employees, and school employees undergo compulsory background checks in most states.

In a state like North Carolina, background testing is mandatory for all staff working in hospitals, mental facilities, day-care facilities, nursing homes, substance abuse facilities, and institutions that provide care to children, sick people, senior citizens, or the disabled.

Legal procedures followed in carrying out background checks include:

  • Disclosure.

The employer must inform the candidate that the pre-condition for the job offer is a compulsory pre-employment background screen. The candidate is taken through the procedure and is told the exact procedures and importance of the background check.

  • Consent.

The candidate is free to accept or reject the pre-employment screening. The candidate's consent is obtained and preserved through written documents and upon completion of the check, the candidates are allowed to view their results. It is a right under FCRA for an applicant to receive the results of the screening exercises. 

  • Investigation.

Upon consent, the screening process starts. After investigations, there is a compiling of a clear report on the findings that is presented to both the employer and applicant for consideration. A standard background check usually takes around anywhere from a day to a week to complete.

  • Review.

The review is the last stage in the screening process. The screening agency sends the employer a report indicating what they have found. They recommend to the employer whether to hire or not. In most cases, if the candidate has passed the background check, the screening agency recommends in writing that the candidate is clear for hire. If the screening agency notes a problem, they inform the employer to consider the application. They hand over clears details on where they have found a problem.

Candidates are protected from discrimination or unfair treatment during the recruitment process by the Equal Employment Opportunity Commission (EEOC). The EEOC is in charge of investigating, conciliating, and mediating any employment discrimination charges. Lawsuits may then be filed in the case of certain violations.

It is the Federal Trade Commission's (FTC) role to ensure the screening process abides by the federal nondiscrimination laws.

The Federal Trade Commission (FTC) requires adherence to the following procedures before carrying out any background check:

  • The employer informs the candidate of the intention to do a background test.
  • The candidate has a right to be informed on the scope and nature of the investigation.
  • The screening agency should get written permission from the candidate allowing the agency to perform the check.
  • Certify and acknowledge to the company you are accessing information from that you will not use the report to discriminate against the applicant.
  • Confirm that you are adhering to all FCRA requirements.

It would be best if you also review the state and municipality laws regarding background screening. For instance, some regions prohibit using an applicant's genetic information, such as family medical history.


The cost of background check:

Background checks vary from one country to another. However, in most states, background checks are generally within the $20-30 range. In certain states like New York, the process costs $65 or more. The check's cost is not charged at a flat rate by the check agencies, but it differs depending on the company doing the background check.

The background check cost is also determined by the screening companies' expenditures while gathering the required data. For instance, different courts charge different fees for anyone accessing their database. Some of the agencies cater to this additional cost, but others will pass it to their clients.

Basic screening, standard screening, and premium screening are the three packages offered by agencies during background testing. Primary screening is the cheapest and only covers a candidate's criminal history and identity verification. The standard screening is a mid-level plan, which is affordable to small businesses. The premium screening offers advanced screening, and it is more costly but very effective.

What to do when a pre-employment check has poor results?

Upon completing the background check process, the results may come back with negative results. The rejection of the application should be conducted per the law, and the employer should inform the applicant of the reason behind the denial of their application. For instance, if the employer finds a positive drug test, he should notify the applicant. The candidate may challenge the results within seven days.

Background screenings are not conducted for the sake of eliminating candidates, but for helping employers make the right decision on whether to hire or not. The hiring policies that each company has may differ from one institution to another; hence you may fail to secure a job in one company you may still find a fit elsewhere. The screening process's conclusion is only a guide towards the correct decision in hiring. Companies should be sure to use these tools to their advantage in order to grow a stronger, more reliable workforce with a safer environment. 

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