How to Do a Background Check for Employment in 2024
Ensure informed hiring decisions in 2024! Learn the legal steps and best practices for conducting employment background checks for new hires.
By David M. Keller
Your company’s success heavily relies on the competence and reliability of your workforce. However, assembling a high-quality team has its challenges. According to a recent survey, over half (56%) of individuals admitted to embellishing their resumes, particularly in work experience, education, skills, and job responsibilities.
The omission of crucial information by candidates can be just as detrimental as dishonesty. For example, an individual with a history of violence may purposely withhold this information during the hiring process.
Allowing such individuals into your workplace poses significant risks. It could endanger customers and fellow employees, leading to legal consequences related to negligent hiring practices and irreparable damage to your company’s reputation.
Conducting background checks is essential to mitigate these risks and ensure that you make informed hiring decisions. These checks can verify an individual’s employment history accuracy regarding past positions and confirm their educational qualifications.
They uncover any falsehoods or omissions made on resumes while providing insight into an applicant’s criminal record, if applicable.
However beneficial background checks aid your decision-making process for new hires, the process must remain consistent with legal requirements and fair for all applicants. This guide will provide all the details about running employment background checks.
Step 1: Create An Employment Background Check Policy
To ensure consistency throughout your organization, have a well-documented background check policy that outlines the specifics of your screening program. This policy should encompass three key components:
- Specify the types of background checks and their applicability. While implementing background screening throughout the organization, it’s advisable to tailor employment screening packages based on job roles. For instance, consider requiring credit checks for positions involving financial management and driving record checks for roles requiring vehicle operation.
- Define how background check results will influence employment decisions. Your background check policy should outline the criteria for evaluating information in employment determinations. Best practices involve considering factors such as the position’s requirements, the nature of past offenses, and the duration since the conviction occurred.
- Determine the timing of background checks in the recruitment process. Decide when to screen candidates and the intervals for screening current employees. While federal law permits employment screening at any stage post-candidate consent, adherence to potentially stricter state and local laws is essential.
A written background check policy ensures fairness, transparency, and discrimination prevention and mitigates the risk of litigation and enforcement actions from federal agencies.
Step 2: Compliance: Background Checks For Employment & The Law
Employers must adhere to many federal, state, and local laws and regulations when conducting background checks. The responsibility for compliance lies squarely on the shoulders of the employer, as any failure to do so can lead to significant financial repercussions in the form of fines, settlements, and legal actions.
Employers must be aware of four potential violations they may inadvertently commit during the background check process.
- Consent forms: According to the FCRA, employers must provide written notification to applicants that a background check will be conducted for employment purposes. This disclosure should be clearly and conspicuously presented as a standalone document.
- Adverse action: The FCRA mandates employers to adhere to a three-step adverse action process when considering unfavorable actions based on background check findings. This process entails issuing a pre-adverse action notice, a copy of the background report, and a Summary of Rights. Subsequently, employers must afford candidates a reasonable opportunity to respond (typically within five business days) before issuing an adverse action notice.
- Ban-the-box: Ban-the-box regulations vary across states and municipalities but typically require delaying background checks until after the initial interview or a conditional offer is extended. These laws may also impact the adverse action process, necessitating a thorough review of applicable legislation.
- Title VII: Enforced by the EEOC, Title VII of the Civil Rights Act of 1964 prohibits employer discrimination based on race, color, religion, sex, or national origin. Certain background screening policies may disproportionately affect protected groups, particularly minority populations arrested at higher rates, potentially resulting in discriminatory treatment.
Step 3: How To Choose A Background Check Company
When selecting a background check provider for your business, finding one that aligns with your hiring and screening requirements is crucial.
The perfect background check service will vary depending on factors such as the size of your company, the volume of hiring you do, the number of locations you have, the size of your HR team, your budget, your background screening policy, and whether you have in-house legal counsel. It’s essential to consider these features when deciding.
- Built-in Compliance: Enhance compliance efforts by extending beyond FCRA standards to mitigate the risk of unfair hiring practices, lawsuits, and penalties associated with EEOC, ban the box, and local regulations, which are especially crucial when hiring across multiple locations.
- Integrated Adverse Action Workflows: Simplify compliance with integrated, localized adverse action workflows that prompt you regarding the timing for sending pre-adverse and final adverse action notices.
- Individualized Assessments: Minimize scrutiny from the EEOC by utilizing built-in mechanisms to alert you when individualized assessments are advisable or mandatory.
- Flexible Packages: Customize background check packages to avoid excessive screening of candidates and streamline processing times tailored to your industry, position type, and county requirements.
- A Good Candidate Experience: Enhance candidate satisfaction with mobile-friendly workflows and digital consent processes, ensuring a quick and seamless start to background checks. Offer transparency by enabling candidates to log in and view their background check status and reports from any device.
- Integrations: Streamline operations by integrating seamlessly with your ATS, reducing manual tasks and enhancing efficiency.
Step 4: What Are The Different Types Of Background Checks?
To ensure that you’re well-informed and prepared, it’s essential to have a thorough understanding of the various types of background checks and their contents.
This knowledge will enable you to anticipate what to expect from each type of check and how it can aid you in making timely and informed hiring decisions explicitly tailored to your industry and the positions you’re looking to fill. The following are examples of such background checks:
- Criminal record checks: Comprehensive national, state, federal, and county criminal background screenings reveal felony and misdemeanor convictions, along with pending court cases. Depending on the provider’s policies, dismissed charges within the last seven years may also be included. Examples of offenses that may surface include vandalism, public intoxication, disorderly conduct, violent or sexual crimes, fraud, and embezzlement. Employers use criminal record checks to evaluate whether a candidate poses a potential threat to customers or could create an unsafe work environment.
- Civil court checks: County and federal civil court screenings unveil non-criminal legal actions such as suits, claims, and judgments wherein the candidate is listed as a respondent. These may encompass small claims, restraining orders, civil rights violations, and bankruptcies, particularly crucial for positions entailing financial or managerial responsibilities.
- Credit checks: Employment credit reports provide a candidate’s complete credit history (excluding their credit score), including payment records, civil judgments, tax liens, bankruptcies, outstanding bills in collections, and recent credit inquiries. Reviewing credit history may be necessary for certain roles, especially those involving access to financial assets, transactions, and decision-making authority.
- Driving record checks: Motor vehicle reports (MVRs) validate license validity and offer insight into a candidate’s driving history, including DUIs, suspensions, and moving violations. This is pertinent for positions where employees, volunteers, or contractors will operate motor vehicles for business purposes.
- Drug screening: Drug testing reveals recent use of specific prescription and illicit drugs, aiding in maintaining a safer and more productive workplace environment.
- Employment verification: Validate a candidate’s employment history and job-related experiences to confirm the accuracy of provided information, sufficiency of work experience for job requirements, and validity of past titles, achievements, or responsibilities.
- Education verification: Confirm a candidate’s school attendance dates, majors, degrees, diplomas, or certificates earned to mitigate the risk of hiring individuals with false credentials and ensure compliance with regulations.
- Healthcare sanctions checks: OIG searches and healthcare sanctions background checks offer insight into a healthcare professional’s medical background, including penalties, suspensions, or disciplinary actions, ensuring compliance with federal regulations and verifying good standing.
- International background checks: Various types of international background screenings provide international criminal records, education credentials, and employment history for candidates who have lived, worked, or studied in other countries while residing in the US.
Step 5: What Do You Communicate To The Candidate?
To ensure transparency and manage expectations, communicate with candidates regarding the background check process effectively. It’s recommended to be open and honest about the reasons for conducting a background check and encourage candidates to reciprocate this openness.
Candidates should be informed that they may access their background check results, contest any inaccuracies, provide written comments, or discuss with you to explain any alerts that may arise.
Note that candidates are protected by rights outlined in A Summary of Your Rights document under the Fair Credit Reporting Act (FCRA). When utilizing a background check provider for employment screening purposes, you must adhere to these rights.
- Inform the candidate about the background check process and its potential impact on your hiring decision.
- Obtain the candidate’s written consent to conduct employment screening through a background check company.
- Provide the candidate with a pre-adverse action notice if the background check results prompt consideration of not hiring them. Include a copy of the background check results, their rights under the FCRA, and the contact details of the background screening company. Allow the candidate a reasonable period (typically five business days) to dispute inaccuracies. Only issue a final adverse action notice in writing if you have decided not to hire them.
The EEOC advises considering individual circumstances and the context surrounding a candidate’s criminal record. Factors include the nature and severity of the offense, the time elapsed since the offense, and its relevance to the job applied for.
Conducting an individualized assessment allows the candidate to provide additional context and explanations about the offense.
What Is An Employee Background Checking Service?
Background checks for employment services are precisely what their name suggests: generally, they’re online services that allow employers, and occasionally consumers, to review various public databases for background information on specified individuals.
The information these services access is usually publicly accessible, so their value lies in convenience, extensive data access, and the ability to analyze that data to make informed hiring decisions effectively. They offer a price, usually determined per report, but with other pricing options available.
Most background check services operate independently. Businesses utilize these services whenever they need to conduct a report. However, some services are available as part of a larger integrated HR software solution, which incurs an additional cost.
Certain services primarily specialize in providing the data component and offer application programming interfaces (APIs) that developers can leverage to seamlessly integrate background checks into their specific in-house solutions or existing third-party Human Resources (HR) systems.
HR departments often rely on multiple services to create a more comprehensive and insightful candidate profile. Engaging multiple services can quickly become costly and repetitive if they generate redundant background data.
Best Background Check Sites for Employment
GoodHire
GoodHire, with its Basic edition starting at $29.99, initially emerged as a platform catering to small businesses’ employment background check needs. Over time, the company expanded its services to accommodate businesses of all sizes.
Having been established five years ago, GoodHire now boasts a substantial customer base of over 75,000 businesses. These customers benefit from the platform’s user-friendly and streamlined workflow for pre-employment background screening. This workflow is specifically tailored to meet the requirements of Human Resources (HR) managers.
Pros:
- Offers competitive pricing
- Projects a welcoming atmosphere similar to Checkr’s
- Provides an intuitive applicant portal
- Includes a comprehensive Resources section
Cons:
- Report completion time surpassed the initial estimated duration, although revised estimate dates were met
- Lacks multilingual support
HireRight
HireRight provides criminal background screenings for both local and global candidates. In addition, they offer a wide range of services, including I-9 verifications, driving record checks, and candidate experience evaluations.
Employers appreciate that HireRight integrates with popular applicant tracking systems (ATS) like Zoho Recruit, Greenhouse, JazzHR, Jobvite, and BambooHR. These are just a few examples of the many ATS integrations that HireRight offers.
Conducting thorough background checks is just one of the many costs companies must manage daily. After conducting extensive research on reviews from various sources, many businesses switched to HireRight because of their affordable pricing compared to other more costly brands.
Pros:
- User-friendly interface
- Cost-effectiveness
- Thorough screening processes
- Centralized dashboard for streamlined management
Cons:
- Inconsistent customer service
- Delayed turnaround times
- Imposition of unreasonable expectations on candidates
Checkr
Checkr, with a starting price of $35, distinguishes itself by offering practical employment background check services. Established in 2014 and a product of the technology accelerator program Y Combinator, Checkr takes a unique approach.
While other competitors like A Good Employee.com function primarily as standalone services, Checkr is designed as an application programming interface (API) for background checks.
Its purpose is to simplify background screening integration into a company’s chosen applicant tracking system (ATS). This design ensures ease and convenience for businesses looking to streamline their hiring process.
Pros:
- User-friendly
- Optimized for mobile devices
- Excellent
- Intuitive user interface
Cons:
- Although its report turnaround time estimate was slightly longer than other vendors, it was completed within the provided timeline
First Advantage
In addition to conventional pre-employment verifications, First Advantage offers comprehensive background screening services for contractors, freelancers, and vendors.
The company prioritizes applicants’ experience by providing a user-friendly mobile app. It utilizes data analytics and diagnostic dashboards as essential resources for employers looking to streamline their background check procedures.
Pros:
- Interface quality
- User-friendliness
- Seamless integration with other CRM systems
Cons:
- Delayed turnaround time
- Limited dropdown options
- Compatibility issues with integrating other screening applications
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Sterling
Having been founded in 1975, Sterling Check provides a wide range of services that cover important checks such as criminal records and driving history, as well as more specialized offerings like credit checks and ongoing monitoring of medical licenses.
With a global presence, they serve various industries, including education, construction, finance, energy, utilities, and transportation.
Sterling’s API is renowned for its extensive integrations with top HR systems. This API offers flexibility and customization options, enabling employers to streamline their background check procedures effectively.
Pros:
- Compatible with applicant tracking systems
- Well-designed mobile user interface (UI)
- Customized branded portals featuring tailored dashboards
Cons:
- Cluttered user interface
- Lack of transparency in pricing complicates forecasting
Peopletrail
With a rich history spanning over two decades since its establishment in 1994, Peopletrail has established itself as a prominent player in the background check service industry.
Offering pre-employee background checks across a wide range of sectors, Peopletrail boasts extensive services, including verifications, volunteer background screening, criminal record checks, and drug testing.
Renowned for providing top-quality services, Peopletrail has garnered the trust and partnership of leading corporations such as Intel, Whirlpool, Office Depot, and Amazon.
The remarkable customer retention rate is an astounding 99.5%, firmly solidifying Peopletrail’s reputation as a trusted partner in meeting all background check needs.
Pros:
- Availability of direct support channels
- Lack of transparency in business pricing
- Capability for social media searches
Cons:
- Website prone to glitches
- Absence of smartphone applications
- Insufficient support options
- High pricing for search functionality
Benefits of Running Business Background Checks
Employers conduct background checks to select the most suitable candidate for a position. It safeguards their business from individuals who may exhibit fraudulent or irresponsible behavior while on the job.
Adhering to state and federal regulations is another significant advantage of implementing background checks. Although it varies based on industry and job type, using background checks demonstrates that proper care was taken during the hiring process. Conducting background checks can enhance workplace safety, thereby protecting employees.
How Do You Fail a Background Check?
Different organizations have varying criteria for conducting background checks. It’s possible to clear one job’s screening while failing another successfully. The EEOC and local laws protect background checks to safeguard individuals from intrusive and discriminatory practices.
However, suppose an individual has a criminal record. In that case, employers are within their rights to consider this as a factor in their hiring decision, as long as it’s done reasonably.
Below are some outcomes that employers typically consider:
- Severe felony convictions: Possessing a record of criminal convictions may pose a liability or safety concern for an employer. It’s essential to address any unfavorable criminal background proactively.
Take the necessary time to prepare a well-thought-out response and gather references that attest to your ability to bring value to a company. Demonstrate that your past convictions are just that, in the past, and don’t restrict your skills or potential contributions.
- Dishonesty: Providing misleading or false information regarding your qualifications, work history, or references can cast doubt on your integrity in the workplace. Honesty remains the most effective policy.
- Bad feedback: Negative reports from references can deter a hiring manager from proceeding with your application. If there’s a concern that a former manager or colleague may provide unfavorable feedback, be prepared to offer context regarding the circumstances of your departure from the job.
Other Considerations for Employers
If you’re considering conducting a background check on potential employees for the first time, there are some important additional details that you should be aware of.
Hiring For Remote Positions
As remote work grows more prevalent, the shift towards video interviews over in-person ones becomes increasingly common. An identity verification check can enhance security measures at the outset of the hiring process.
Delivery Times For Background Checks Vary
The duration of a background check hinges on the specific types of searches conducted. Some providers offer swift turnaround times, with basic checks completed almost instantly or within the same day.
Conversely, certain screenings, such as county criminal record checks in non-digitized counties or employer and education verifications, may take up to five days or longer to finalize.
The FCRA Requires Company Verification
Compliance with FCRA mandates necessitates the verification of a company’s legitimacy before initiating a background check. Typically, the company credentialing process with a background check provider spans one hour to one day.
Use Free Background Checks At Your Own Peril
While self-conducted background checks are plausible, they’re labor-intensive and entail inherent risks. Visiting each jurisdiction’s courthouse in person, completing record response forms, and awaiting responses are typical procedures.
However, this method risks losing candidates to other employers or receiving incorrect or incomplete results, potentially leading to misguided hiring decisions.
Similarly, screening candidates via social media may inadvertently expose hiring criteria bias, such as about religion or race, resulting in discriminatory hiring decisions.
You May Want to Conduct a Reference Check
Certain background check providers offer employment and education verification services and professional reference checks. Engaging in reference check interviews featuring comprehensive, open-ended questions can offer insights into a candidate’s character, alignment with company values, and potential fit within the organizational culture.
Consider Conducting Post-Hire Background Checks
Background checks should be viewed as something other than a one-time endeavor. Conducting post-hire background checks annually or more frequently in specific industries and roles is common practice. If pursued, ensure that your background check consent form incorporates an “evergreen clause” where state law permits.
5 Tips to Prepare for a Background Check
Preparing for background checks can be an overwhelming experience. Although it’s natural to feel anxious about the process, there are several strategies you can employ to ensure that the screening is conducted fairly and accurately.
Listed below are five helpful tips to help you prepare for pre-employment screenings:
- Inform yourself: It’s important to familiarize yourself with the type of background check requested by the hiring manager, as it may contain sensitive information.
- Check your credit report: Conducting a self-check on your credit report can be a precautionary measure to ensure accuracy, especially if your potential employer requires this information. If any inaccuracies are suspected, promptly contact the reporting agency to rectify the errors before potential employers access the report.
- Give your references a heads up: As a gesture of courtesy, always obtain consent before listing someone as a reference on your resume. During the interview process, remind them that they may receive communication via phone call or email from prospective employers.
If a Company Does a Background Check, Are You Hired?
It’s only sometimes the case. An employer can conduct a background check at any given point, whether during the application process or when you’re on the verge of receiving an offer.
However, approximately 87% of background checks occur during pre-employment, which means that once you have been hired, your employer is unlikely to perform another check.
Employers may provide you with a conditional offer that hinges on the outcome of your background check. This indicates their intention to verify that all information provided by you is accurate before proceeding further.
Frequently Asked Questions – Background Check for Employment
How Long Does It Take To Get a Pre-employment Background Check?
The timeframe for obtaining the outcome of a pre-employment background check varies based on the specific components you wish to incorporate, such as a credit assessment and investigation into criminal history. Obtaining the results may require anywhere from 48 hours to five days.
What Causes a Red Flag on a Background Check?
Here are some examples of potential red flags:
- Persistent gaps in employment history suggest difficulty in maintaining employment.
- Discovery of undisclosed previous criminal history raises concerns regarding candidate transparency.
- Verification for claimed college or university attendance needs to be present despite inclusion on the resume.
- Notable inconsistencies were detected in the candidate’s past employment records.
What Is Considered a Clean Background Check?
For a candidate’s background check to be deemed clean, it must not reveal any significant felony convictions or misdemeanors. It’s also acceptable to consider a background check satisfactory if the candidate admits to past criminal activity irrelevant to your industry or the specific job role.
How Do You Run a Background Check on an Employee?
Before initiating a background investigation on an employee, informing them about the process is essential. Subsequently, you can engage in a professional service or undertake independent research.
What Are Social Media Background Checks?
Examining a candidate’s public social media profiles is conducting a social media background check to gain insights into their beliefs and perspectives. A significant majority of employers, exceeding 70%, utilize social media to screen potential hires.
More than half of these employers are reluctant to hire candidates with no online presence or make unfavorable impressions based on their online activities.
How Much Does a Background Check Cost?
The price of conducting a background check varies widely, ranging from less than $10 to more than $100. The cost is determined by the specific type and level of detail required.
Criminal searches tend to be the most affordable option. Still, the expenses will escalate accordingly if additional services, such as credit checks, are desired or you choose to outsource the entire process.
Bottom Line – Background Check for Employment
Conducting an employment background check is a standard procedure when vetting candidates for numerous positions. If you have reached this stage of the hiring process and have been forthright with your prospective employer, there’s typically no need to worry about what employers seek in a background check.
It’s always prudent to take a proactive approach and address any inaccuracies or misconceptions. Even if you don’t expect encountering obstacles, knowing what steps to take will provide reassurance as you await the outcomes.
