What is a background check for employment?
A background check is a pre-screening tool employers can use to verify a candidate’s qualifications and uncover relevant information about their legal history, employment records, education, credit and more before further consideration for a job position. It can reveal discrepancies or information relevant to a candidate’s qualifications or suitability for a role, such as inconsistencies in a resume, falsified credentials or certain legal history.
Surveys suggest a large majority of employers conduct at least one type of background check during hiring, although exact percentages vary by source. Some employers also rescreen current employees annually, or before job promotions. Background checks can be effective when applied in compliance with legal requirements and employer policy.
“Background checks help verify candidate qualifications and reduce risk. Confirming a candidate’s history and credentials can help protect your workplace, your customers and the integrity of your business.”
—Daniel Smith, J.D.
Benefits of running business background checks
Employers conduct background or pre-screening checks to help verify they choose the right candidate for the position. They also aim to minimize the risk of workplace misconduct or violations of company policy.
State and federal regulatory compliance is another benefit for business owners. Depending on the industry and role, certain background checks may be legally required. For example, fingerprinting and legal history checks may be needed for healthcare workers, childcare providers, financial professionals or anyone handling sensitive data.
Performing these checks demonstrates that your company exercised due diligence in the hiring process. Laws determine what kind of background checks your business can conduct to protect applicants and employees from discrimination. It’s important to consistently treat all applicants fairly to promote equitable hiring practices.
Types of background checks for employment
Employers can use several types of background checks to screen candidates, such as:
Social Security verification
Social Security number (SSN) verification helps confirm identity and detect inconsistencies, but does not establish work authorization, which must be verified through Form I-9 (and E-Verify, if used). Be sure to comply with applicable privacy laws when collecting and verifying Social Security numbers. To verify SSNs for current or former employees for wage reporting purposes, you can use the Social Security Administration website.
Legal background check report
A legal background check is one of the most common new-hire screening tools for verifying a candidate’s prior legal record. A criminal history report may include arrests, convictions and sentences, where records are available. Coverage can vary by jurisdiction and source.
Drug testing
Drug testing may be used to address safety and performance concerns in certain roles and industries. This testing is typically done at a local clinic, and the results are typically reviewed by a Medical Review Officer (MRO) before being reported to the employer.
Credit check
A credit check can provide information about an applicant’s financial history. Employers should use it only where legally permitted and relevant to the job.
Employment history background checks
Employers may contact previous employers directly or use third-party verification services to confirm employment history. Some past employers may only provide basic information, such as the position and date of employment, so respecting their limitations by not insisting on additional details is important.
Education or license verification
Depending on the job requirements, you may need to verify completion of an educational program or course. For roles in fields such as healthcare, finance, construction or law, employers may need to confirm that a candidate holds a valid, active license before allowing them to perform job duties on behalf of the employer.
Verifying candidates hold the required legal credentials helps protect your business, especially if the employee misrepresents themselves as licensed or qualified. Knowing the requirements of each role in your business and verifying that your employees are qualified is important.
Motor vehicle record
If a candidate will drive a vehicle as part of their job, it may be necessary to review motor vehicle records. Motor vehicle records provide relevant safety history and can be helpful in preventing risk arising from preventable incidents. Consulting legal counsel about how driving history affects hiring and liability is important.
How to conduct a background check for employment
Some businesses choose to outsource background checks for employment to a professional service, but you can also conduct one yourself. This is a list of steps you can take to help you perform candidate background checks for employment:
1. Review laws around background checks
Before you begin conducting a background check for employment, review federal, state and local laws and regulations governing background checks and employment screening. Relevant laws can be found through federal agencies (e.g., EEOC, FTC) and state labor or regulatory agencies, depending on the jurisdiction.
2. Set clear company policies regarding background checks
Conducting all background checks in a fair, impartial and professional manner is important. Developing clear policies detailing your vetting process can help avoid prejudice or bias and help protect your company from legal issues.
3. Notify candidates
To remain compliant with the Fair Credit Reporting Act (FCRA), employers are required to provide advance disclosure and authorization when conducting background checks. Many employers include this notification in the application or onboarding process and confirm the candidate’s consent with a separate signed permission form.
4. Contact references
To conduct a reference check, ask candidates for two to three references to verify their qualifications for the job. Contact each reference to set up a time to discuss the candidate. Prepare a list of questions to assess the candidates’ suitability for the position. When contacting references, focus on information relevant to the role and respect the candidate’s privacy and confidentiality.
5. Use an accredited background check service
You can hire a professional background-checking service to conduct a background check on your behalf, or you can do the research yourself by enlisting the help of an online background check website. If using third-party reports for employment decisions, employers must use FCRA-compliant consumer reporting agencies rather than general consumer websites.
The cost of a background check can vary, depending on the type and depth of the check. Legal searches are often the least expensive option, but adding credit checks or outsourcing the process may increase costs.
6. Ask the candidate to take a drug test if applicable
If the role involves safety-sensitive duties such as driving, caring for children, operating heavy machinery or working in a regulated industry, consider requiring a drug test as a job-related, consistently applied screening measure. Use certified testing providers, obtain the candidate’s informed consent, follow applicable laws and obligations and verify that results are handled confidentially and sent only to authorized personnel.
7. Review results to assess candidates
Upon obtaining the results from background checks, screenings and assessments, evaluate whether the information aligns with your hiring criteria. If you receive a result that differs from your expectations, consider how the information is relevant to the role or proceed with other candidates who may be more suitable.
