How to Conduct Employee Background Checks

Not only is it important for business owners to understand the resources at their disposal to hire the right candidates, but they also need to know how to use them. Background checks for employment help employers narrow down the candidate pool to the most worthy individuals. Read further to learn more about background checks, why they’re important, what they entail and how to conduct them.
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What is a background check?

A background check is an evaluation method that employers use to determine the validity of the information a job candidate provides in their application. It highlights any potential red flags with a candidate before further consideration for a job position.

According to a 2019 study, 86% of employers conducted background checks on full-time employees and 67% on part-time workers. These checks included a criminal background check and social security number trace. Almost 60% conducted checks only during the hiring process, while 11–12% did so as required by law or for other reasons. Some companies wait until the conditional job offer phase to run the check, and depending on the type and depth of the check, waiting time and costs are two of the challenges employers face during the process.

Benefits of running business background checks

Employers conduct background checks to ensure that they choose the best candidates to contribute to their business. They also need to make sure they’re protecting their business from individuals who may display fraudulent or reckless behavior in the workplace.

Apart from mitigating the impact of a disastrous hire, state and federal regulatory compliance is a major benefit. This depends on the industry and type of position, but you can use the background checks to show you did your due diligence. Proper record-keeping is required, and it’s incumbent on you to show that your company is compliant with regulatory standards so it doesn’t lose its credentials or reputation.

Finally, background checks improve workplace safety. In 2018, workplace fraud was at 21%, double what it was in 2002. Workplace accidents and violence were also reduced by the process.

What you need to run a background check for employment

The basic information you require is the candidate’s full name, social security number and date of birth. You might need permission to get the potential employee’s credit report and other records, such as school transcripts, and you could also ask for social media handles so you can check the candidate’s online presence.

What does a background check consist of?

Here are several factors a background check shows:

Social security verification

By verifying the validity of a candidate’s Social Security Number (SSN), you determine if they are being truthful about their identity and whether they have the right to work in the country. You may access social security records through the Department of Homeland Security or the Social Security Administration.

Criminal record

You may need to research evidence of a criminal record to make sure the candidates haven’t previously participated in fraudulent activities or currently have warrants out for their arrest.

Drug testing

Drug testing may be a necessary component of a background check to prevent a lack of productivity in the workplace and increased employee turnover rates.

Credit check

A credit check allows you to verify trivial information about a candidate, such as their name, address and contact details. Credit checks may also help you determine how responsible they are with money. This is important, especially if they apply for a position in finance or a role that requires money-handling.

Employment history

Background checks also verify employment history. Something as simple as an internet search can confirm or deny the validity of a company and a candidate’s qualifications.

Motor vehicle record

If a candidate will be expected to drive a vehicle as a part of their job, it may be necessary to review motor vehicle records to check for bad driving habits, speeding tickets or DUIs.

How to conduct a background check

Some businesses choose to outsource background checks for employment to a professional service, but you can also conduct one yourself. Here’s a guided list of steps to help you run a background check for a job candidate.

1. Tell the candidate you will be conducting a background check

To remain in compliance with the Fair Credit Reporting Act (FCRA), you need to make sure to send an email to each candidate outlining the areas you will be checking. Also, provide an attached document for them to sign electronically that confirms their consent to proceed with the background check.

2. Review state laws about background check regulations

Before you begin conducting a background check, be sure to check your state’s specific laws and regulations regarding what information employers can check and what information constitutes dismissal for a candidate within your state. You can usually find this information on your state’s department of public safety website.

3. Contact candidate references

Make sure to ask candidates for two to three references to verify their qualifications for the job at hand. Email each reference to set up a phone call to discuss the candidate. Prepare a list of questions to ask to confirm or deny their skill sets and work ethic. You may even decide to meet their references in person or via video chat to verify their identity.

4. Use a background check website to review records

You can hire a professional background-checking service to find evidence of criminal backgrounds and other civil records, but you can also do the research yourself by enlisting the help of an online background check website. You may need to pay a fee to access public records.

5. Ask the candidate to take a drug test

If the job you offer requires employees to drive a commercial vehicle, care for children or work in a potentially dangerous environment, a drug test may be necessary to determine the safety of your other employees and customers. Send candidates to a doctor’s office for a drug test or have a certified professional collect a sample during appointments in the office.

6. Review the results to determine a candidate’s validity

After you gain access to background check documents, review them to determine if your candidate is worthy of working at your company. If you don’t feel comfortable based on the information you uncover, proceed with other candidates who may better represent your company.

Frequently asked questions about background checks for employment


How long does it take to get a pre-employment background check?

The amount of time it takes to receive the results of a preemployment background check depends on how many items you want to include, such as a credit check and criminal background check. For this reason, it could take between 48 hours and five days to get results.

What causes a red flag on a background check?

Here are some examples of potential red flags:

  • Consistent gaps in employment could point to an inability to keep a job.
  • There’s evidence of previous criminal history that a candidate didn’t tell you about.
  • There’s a lack of proof that they attended a college or university despite listing it on their resume.
  • There are discrepancies in their previous employment history.

What is considered a clean background check?

A candidate’s background check is clean when it doesn’t have any major felonies, convictions or misdemeanors. You might also consider their background check to be clean if the candidate confirms previous criminal activity, but it isn’t relevant to your industry or the job role.

How do you run a background check on an employee?

Before you begin a background check on an employee, notify them. From there, you may decide to use a professional service or do your own research.

What are social media background checks?

Conducting a social media background check involves reviewing a candidate’s publicly available social media pages to get a better understanding of the candidate. Over 70% of employers are using social media as a screening tool, and over half either won’t hire candidates they can’t find online or based on what they do find online.

How much does a background check cost?

The cost of background checks ranges from under $10 to hundreds, depending on the types and depth. Criminal searches are the least expensive, but if you want to add credit checks or outsource the process, the cost will increase.

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