What Does an Employment Background Check Show?

Introduction

An employment background check is a staple in the hiring process, offering a snapshot of a candidate’s history that extends beyond the resume. Essentially, it’s a way for employers to vet potential hires by confirming the accuracy of the information provided and identifying any potential red flags before making a hiring decision. The primary objective is to ensure that candidates meet the required qualifications and are a safe, trustworthy addition to the workplace.

Legally, these checks are guided by federal and state laws, with the Fair Credit Reporting Act (FCRA) being the key regulation. The FCRA sets the standards for how these checks can be conducted and ensures that candidates are treated fairly. Under its guidelines, employers must get written consent from the job seeker before proceeding with a background check, and they must also notify the candidate if any adverse hiring decisions are based on the check’s findings. Moreover, state laws can add extra layers of regulation, such as restricting the types of information that can be reviewed or requiring additional disclosure requirements. These legal frameworks are designed to protect candidates from discrimination and ensure their privacy is respected during the hiring process. For more detailed guidance, employers often refer to resources like the Federal Trade Commission’s guidelines on employment background checks.

EXPERT INSIGHT: In my nearly two decades in HR, both I and the organizations I’ve been part of have greatly benefited from implementing comprehensive background check practices. These checks have provided essential direction in our hiring processes, ensuring we remain vigilant in avoiding discrimination while affording individuals the opportunities they need for personal growth and change. Additionally, background checks have served as early indicators of developmental needs or potential resignations, enabling us and business leaders to take proactive measures in employee engagement. Curious about the insights a background check might reveal? Dive into this article for more details. – Emile Garcia, SHRM-SCP, CHRP, CHRBP

What Types of Background Checks Exist and What Do They Reveal?

Background checks come in various forms, each offering a different slice of a candidate’s history. Here’s a breakdown of the different types and what they typically reveal.

1.  Identity Verification

Identity verification involves cross-checking the candidate’s personal information against secure databases. This includes verifying details like name, date of birth, and Social Security number. Employers use databases such as the Social Security Administration and credit bureaus to confirm who you really are. It’s about ensuring the candidate is who they claim to be and isn’t using a false identity to gain employment.

2. Criminal Records Check

Criminal records checks are designed to surface any past legal issues. They can show misdemeanors, felonies, pending charges, and sometimes even arrests, depending on the state. Information is usually pulled from national, state, and county databases, along with registries like the sex offender registry. The depth of this check can vary based on the employer’s requirements and legal stipulations in different regions.

3. Employment Verification

Employment history verification seeks to confirm positions held, duration of employment, and the nature of the job. Employers typically contact previous employers directly or use third-party services to ensure the candidate’s reported work history matches official records. It’s about validating experience rather than delving into the details of job performance.

4. Education Verification

Education verification checks the accuracy of educational qualifications claimed by a candidate. This can include confirmation of degrees, diplomas, and certifications from universities or trade schools. Employers or background check companies contact educational institutions directly to cross-check details. This step prevents falsified credentials from slipping through the cracks.

5. Credit Check

Credit checks reveal the financial responsibility of a candidate. They typically report outstanding debts, credit limits, and payment histories. The use of credit checks is restricted in some states, based on the job applied for, reflecting concerns about privacy and relevance. For roles handling finances, this step can indicate how a candidate manages personal financial obligations.

6. Professional License Verification

This process ensures that candidates hold necessary licenses required for certain professions, like medical or engineering licenses. Employers verify licenses directly through issuing bodies, checking for validity, expiration, and any disciplinary actions on record. It’s crucial for roles where public safety and compliance with regulatory standards are involved.

7. Motor Vehicle Records

A check of motor vehicle records can uncover a candidate’s driving history, including accidents, violations, and DUI offenses. The Department of Motor Vehicles (DMV) usually provides this information. This type of check is essential for positions that involve driving company or personal vehicles, helping mitigate risks associated with unsafe driving.

8. Drug Testing

Drug testing screens for the presence of illegal substances in a candidate’s system. Common methods include urine, hair, or blood tests. Legal considerations must be observed, including the applicant’s consent and adherence to state and federal guidelines. Regular drug testing promotes a safe and productive workplace, especially in safety-sensitive industries.

What Information is Off-Limits to Employers?

When it comes to background checks, it’s not a free-for-all. Employers must navigate a landscape of privacy laws that restrict certain types of information from their reach. Here’s a breakdown of what’s typically off-limits:

School Transcripts

Academic transcripts offer a detailed look into an individual’s educational performance, but these are generally protected under privacy laws like the Family Educational Rights and Privacy Act (FERPA). Employers can verify degrees and attendance but can’t access grades or coursework without consent.

Military Records

Service members’ records contain extensive personal details that are protected under the Privacy Act. While some information, like discharge status, might be available to employers with consent, sensitive details such as evaluations and disciplinary actions are not up for grabs.

Medical Records

Health-related information is strictly safeguarded by laws like the Health Insurance Portability and Accountability Act (HIPAA). Employers can’t request details about a candidate’s medical history or present conditions without explicit permission. Only job-related medical exams, conducted post-offer and ensuring workplace safety, can be considered.

By adhering to these boundaries, employers safeguard candidate privacy and maintain compliance with various legislative rules, ensuring a fair and respectful hiring process.

How Does the Background Check Process Work?

Establishing a Background Check Policy: Start by drafting a clear, enforceable background check policy. This should outline what will be checked, how often, and who is responsible. Consider the specific needs of your industry and any legal constraints.

Obtaining Candidate Consent: Before conducting any checks, secure written consent from candidates. This is not just a good practice—it’s a legal requirement under the Fair Credit Reporting Act (FCRA). Make this part of your standard hiring process to ensure candidates are fully informed and compliant with privacy regulations.

Conducting the Checks: Once you have consent, proceed with the checks. This might involve verifying identity through social security numbers, checking criminal and financial history, and confirming education and past employment. Utilize reputable background check services to ensure accuracy and compliance.

Evaluating Results (Adjudication): After collecting the information, it’s time to evaluate the results. Define clear criteria for what is acceptable and what might be a red flag. This step involves cross-referencing the findings with your company’s policies and the requirements of the job role.

Adverse Action Process: If you decide not to hire based on the results, follow the proper adverse action process. This includes notifying the candidate, providing them with a copy of the report, and giving them a chance to dispute any inaccuracies. Adhere strictly to legal mandates to protect both the employer and candidate rights.

How Can You Prepare for an Employment Background Check?

Review Your Own Records

The first step in preparation is to review your records. Take a moment to audit your personal information. This includes ensuring that your identity details—such as your name, Social Security number, and address history—are up to date and accurate across various platforms and documents. Misalignments in this simple information can raise red flags unnecessarily.

Check Your Credit Reports

Next, dive into your credit reports. Obtain reports from the three major credit bureaus—Equifax, Experian, and TransUnion—to verify their accuracy. Pay close attention to any discrepancies or outdated information. Correcting these errors before a background check avoids unwarranted misunderstandings about your financial responsibility. Utilize your right to obtain one free credit report per year from each bureau through AnnualCreditReport.com.

Audit Your Online Presence

In today’s digital age, your online presence can speak volumes. Search your name online to see what a potential employer might find. Adjust your social media profiles to keep inappropriate or controversial content private—or better yet, remove it entirely. Consider creating a professional online presence, such as a LinkedIn profile, to ensure the narrative is in your control.

Understand What Past Employers Might Say

It’s beneficial to understand what past employers may relay about you. Reflect on your work history and consider any potential issues that could be raised. Reach out to former supervisors or colleagues to gain insight into their perspectives and, if necessary, set the record straight. You might not have control over what they say, but knowing what to expect can help you prepare a response to any challenging topics that may arise during discussions with potential employers.

What Legal Considerations and Compliance Issues Should You Be Aware Of?

When diving into the world of employment background checks, legal compliance is a cornerstone. Here’s a quick rundown on what you need to know:

FCRA Requirements

The Fair Credit Reporting Act sets the stage. If you’re using a third party for your background checks, you’ve got to follow FCRA regulations. This means being upfront—getting written permission from your job candidates before you start snooping. If something pops on a report and you decide it impacts the hiring decision, you must inform the candidate. They get a chance to see the report and dispute any errors. It’s all about transparency.

State and Local Laws

Federal rules are where compliance starts, but don’t forget about state-specific quirks. Some states have their own rules on what can be checked and when. For instance, “ban the box” laws mean you can’t ask about criminal history right off the bat. You need to be aware of what each state permits and restricts to steer clear of legal pitfalls.

EEOC Guidelines

The Equal Employment Opportunity Commission takes a keen interest in how background checks are used, especially concerning discrimination. Any checks that disproportionately affect certain groups can land you in hot water. That’s why it’s crucial to consider EEOC guidelines, ensuring your process is fair across the board. The key is relevance—tie everything you’re checking straight back to the job’s needs.

Stay sharp and keep compliance on your radar to protect both your organization and potential hires.

Why are Background Checks Beneficial for Employers?

Background checks are more than just a formality; they’re a safeguard for the modern workplace. They help ensure a safer work environment, which directly impacts employee satisfaction and morale. By identifying potential red flags such as a history of violence or theft, employers can mitigate risks that might otherwise compromise the wellbeing of their teams.

These checks also validate candidate qualifications, confirming that applicants have the credentials and experience they claim. This verification can prevent costly hiring mistakes and ensure the new hires truly fit the job requirements. Moreover, by screening for past employment issues or inconsistencies, employers can reduce turnover rates, saving time and money in the long run.

The bottom line? Background checks are a strategic investment. They lower hiring risks and associated costs, allowing businesses to operate more smoothly and securely.

How Do You Choose a Background Check Provider?

Choosing a background check provider isn’t just about picking the first name that pops up in a search. It requires a careful examination of several attributes and the potential benefits of working with professionals.

Factors to Consider

First off, reliability is key. You need a provider that offers accurate and up-to-date information. This means they should have access to extensive databases and a proven track record of thorough checks. Beyond accuracy, check for compliance with legal requirements, like the Fair Credit Reporting Act (FCRA) and state-specific laws. Providers should not only follow these guidelines but also help you navigate through the complex web of legal obligations.

Consider the scope of services offered. Some roles may require just a basic identity verification, while others might need more comprehensive checks, including criminal records, education, and motor vehicle records. A versatile provider that can scale their services to your needs is invaluable.

Customer support can’t be overlooked. A provider should offer easy access to help when you need it, whether that’s through a direct line to a knowledgeable support team or clear, easy-to-understand resources and guidance. Finally, cost matters. While it’s tempting to go for the cheapest option, it’s crucial to weigh cost against the reliability and breadth of services provided.

Benefits of Professional Services

There are definite advantages to using a dedicated service instead of trying to DIY. Professional services bring expertise and efficiency, saving you significant time and effort. They are well-versed in the latest trends, risks, and compliance issues, ensuring that your checks are both comprehensive and lawful.

Moreover, using a dedicated provider can enhance your credibility and reassure candidates. It shows them that you’re committed to a fair, thorough hiring process. Additionally, professional services often offer technological integrations that streamline the process, making it easier to handle the administrative side of things.

In short, picking a background check provider isn’t a task to be taken lightly. With the right choice, you can mitigate risks, comply with the law, and make more informed hiring decisions.

Frequently Asked Questions

What is the Cost of a Background Check?

The price of background checks varies, depending on the depth and complexity required. Basic checks might set you back $20, while more comprehensive ones can range upwards of $100. Employers often weigh the cost against the potential risk of a bad hire.

How Long Does a Background Check Take?

On average, most checks take between two to five business days. However, this can stretch to a week or more if searching through extensive records or facing delays from data sources.

Will Background Checks Affect My Credit Score?

No, background checks conducted by employers do not affect your credit score. They invoke what’s called a “soft inquiry,” which leaves no trace on your credit history.

Can an Employer Hold a Misdemeanor Against Me?

Employers can consider misdemeanors, yet the relevance often hinges on the job. A customer-facing role might scrutinize theft or fraud charges more than other offenses.

How Far Back Do Background Checks Go?

Typically, checks go back seven years, but this can vary based on the state law and nature of the check. Some roles, especially those in finance or government, might require a more thorough digging up to ten years or more.

What background check do most employers use?

Most employers use a standard background check that includes verification of identity, employment history, education credentials, and a criminal record check. Many employers also review credit reports, particularly for positions involving financial responsibilities.

Why would someone not show up on a background check?

An individual might not show up on a background check due to incomplete or inaccurate data. This can occur if personal information like names or social security numbers are wrong, records have not been updated, or the check is not thorough.

How far do most employment background checks go?

Most employment background checks go back seven to ten years. However, this can vary by state and the types of checks being conducted. Some positions may require more extensive background checks that cover a longer period.

What is the highest level of background check?

The highest level of background check is typically a comprehensive security clearance check. This is often conducted by government agencies and can include interviews, extensive reviews of personal history, financial status, and personal interviews with acquaintances.

Why is screening important in hiring?

Screening is crucial in hiring to ensure that candidates are qualified, trustworthy, and suitable for the role. It helps employers verify the information provided by applicants and minimize risks related to making poor hiring decisions that could lead to financial or reputational damage.

What does background verification mean?

Background verification is the process of confirming the authenticity and accuracy of a candidate’s provided information, such as identity, criminal record, employment history, education, and other credentials. This helps employers determine the suitability of a candidate for the position.

Can an employment background check affect my credit score?

No, employment background checks do not affect your credit score. Employers who check credit reports receive a soft inquiry which is not visible to other creditors and does not impact your credit rating.

What information cannot be included in a background check?

Background checks typically must comply with federal and state laws, such as the Fair Credit Reporting Act (FCRA). They cannot include arrest records more than seven years old, bankruptcies more than ten years old, and any details not sanctioned for review by the law unless for specific regulated positions.

Do background checks show disciplinary actions from previous employers?

Background checks generally do not reveal disciplinary actions directly. Such information may come to light indirectly if the employer checks references or if an applicant discloses such details during the hiring process.

How long does it take to complete a background check?

The duration for completing a background check can vary widely but typically takes between three to five business days. Complex checks, especially those involving multiple jurisdictions or international records, may take longer to finalize.

Conclusion

In today’s competitive job market, employment background checks are more than a formality—they’re a critical component of the hiring process. As we’ve explored, these checks provide a wealth of information, from verifying identity and employment history to uncovering potential red flags in criminal records. By conducting thorough and compliant background checks, employers can make informed hiring decisions that not only protect their organization but also foster a safe and qualified workplace.

However, it’s essential to strike a balance between due diligence and respect for candidate privacy. Employers must navigate the complexities of legal requirements and ethical considerations, ensuring that their practices align with the Fair Credit Reporting Act, state laws, and EEOC guidelines. In doing so, they safeguard candidate rights while still leveraging the detailed insights necessary for effective risk management.

Ultimately, the goal is clear: create a workplace built on trust, competence, and mutual respect. Comprehensive background checks are a powerful tool in achieving this, but they must be wielded thoughtfully and judiciously.