How to Develop an Effective Background Check Policy [2022]

background check policy

Many employers conduct employment background checks on applicants to protect their customers, clients, and employees.

While pre-employment background checks are a critical component of most companies’ hiring processes, it is critical to have a background check policy in place and to regularly review and update it as the laws change.

Did you know that a survey found that 96% of employers reported conducting at least one type of background check on prospective candidates?

A well-written pre-employment screening policy can help you ensure that your background check process is uniform, comprehensive, and complies with all relevant laws. Companies must implement background check policies fairly to protect against potential liability.

Based on our experience conducting employment background checks for employers across the U.S., we’ve written this guide about background check policies and best practices when writing and implementing them.

Let’s get started.

What is a Background Check Policy?

A background check policy for general employers as well as hospitals and contractors provides guidelines for how an applicant’s background should be investigated during a company’s hiring process.

Some applicants tend to conceal background information or embellish their accomplishments to try to appear more suitable for different jobs for which they are applying.

A thorough background check can reveal crucial background information about applicants and allow employers to make informed hiring decisions.

Employers that fail to perform background checks can be at risk of negligent hiring liability when they hire unqualified employees.

A good background check policy helps employers and human resources professionals to determine the procedures used during background checks so that pre-employment screening will be both legal and effective.

An employee background check policy includes the framework for how employment background checks will be conducted during the hiring process in a way that complies with the Fair Credit Reporting Act (FCRA) and other relevant laws.

Why is it important to Have a Background Check Policy?

Having a well-written background check policy is important for the following reasons:

• Clear, Consistent Guidelines and Procedures

Having a background check policy can provide employers with consistent procedures and clear guidelines for how pre-employment screens should be conducted.

• Ensure Compliance With the Laws

Background check policies can help employers ensure compliance with all applicable federal and state laws when they conduct employment background checks and rely on the information revealed to make employment decisions.

• Provide Method for Role-Specific Background Checks

A good background screening policy can help employers ensure that applicants for positions requiring a greater degree of responsibility will include more comprehensive pre-employment checks while those who apply for entry-level jobs will still receive comprehensive general pre-employment screens.

• Consistent Procedures for Reference and Background Checks

Finally, a background check policy provides human resources professionals with consistent procedures to follow when they check references and background information for applicants and ongoing background checks for current employees.

What does a Background Check Policy Include?

A thorough background check policy will include several sections that are described below.

Statement of Purpose

You should include a statement of purpose in your background check policy that explains the purposes of conducting employment background checks, including gaining critical background information about candidates, ensuring that you make the right hiring decisions, verifying the claims made by applicants to ensure they are truthful, and screen candidates who have disqualifying criminal convictions.

The statement of purpose should be succinct and clear.

Scope of the Policy

Employers should also include a statement about the scope of the policy and which individuals will undergo background checks.

For example, a policy for pre-employment screens should apply to all applicants who go through a company’s hiring process. It might also apply to existing employees who are applying for transfers or promotions.

What a Background Check Might Include

Next, employers should include a list of what types of background check reports might be included in their pre-employment screenings.

It should then include information that the particular types of background check reports might vary depending on the positions for which the employer is hiring. Finally, it should detail what a basic background check will include.

The particular types of background checks that might be performed should comply with laws that restrict employers from conducting certain types of background screens. The policy should also recognize when employment background checks can be conducted.

In most cases, companies cannot conduct pre-employment background checks until they are prepared to extend an offer to an applicant. They also cannot conduct background checks without first providing notice that they intend to do so and securing the applicant’s signed authorization to perform the background check.

Responsibilities of Hiring Managers

Employers should next include a section that details the responsibilities of hiring managers or human resources professionals, including the following:

  • Inform candidates in writing that the company will conduct a background check in a standalone document.
  • Get the candidates’ signed permission before conducting background checks.
  • Choose a reputable third-party provider to conduct background checks that comply with the FCRA and other relevant laws and offer fast turnaround times.
  • Inform the candidates about the results of their background checks.
  • Follow the adverse action process when deciding not to hire someone based on the information revealed in a background check.
  • Individually assess criminal conviction information as it directly relates to the position for which the applicant has applied.
  • Conduct background checks on all applicants for a position who have made it past the interview stage without discriminating against anyone based on their protected characteristics.
  • Provide information to candidates about how to dispute or address any problematic information found in a background check.
  • Tell applicants that passing a background check does not necessarily guarantee employment unless they have already received conditional job offers.

Procedures

A background check policy should also include the procedures that human resources staff or hiring managers should follow, including discussing what a background check will include for different positions within the company. HR professionals should also be told to provide notice to applicants that the company intends to conduct pre-employment background checks.

After applicants have been interviewed, and the finalists have been selected, hiring managers should then get their written authorization to conduct the pre-employment screens. They should also explain how the process will work.

If an applicant refuses to give authorization for a background check, HR should inform them that they will no longer be considered for employment.

After the results are received, they should be discussed to determine whether or not to hire the applicant. If negative information is revealed, the employer must go through the adverse action process before making a final decision not to hire the applicant.

If the background check reveals criminal history information, the HR staff must individually assess it as it relates to the position before deciding not to hire the applicant.

Sample Background Check Policy

A general background check policy template is included below. However, you should review your background check policy with legal counsel before implementing it to ensure that it complies with federal, state, and local laws.

Background Check Policy Template

Any offer of employment at [Employer Name] is conditioned upon passing a pre-employment background check. All finalists for open positions and employees who apply for promotions will undergo comprehensive employment background checks.

An employment background check will include the following information:

  • Social Security number verification – Verifies an applicant’s Social Security number belongs to him or her and validates his or her previous addresses and date of birth
  • Employment verification – Verifies the applicant’s past employers, employment dates, and positions held
  • Education verification – Verifies the applicant’s claimed educational attainment, including institutions attended, attendance dates, and any diplomas, certificates, or degrees earned
  • Criminal history – Checks whether an applicant has any misdemeanor or felony convictions
  • References check – Calls to be made to any references listed by the applicant

For criminal convictions, HR professionals should consider the following:

  • The type of conviction and whether it relates to the job
  • The time elapsed since the conviction
  • How many convictions the applicant has
  • Whether hiring the applicant would create an unreasonable risk to other employees, customers, or the company

If applicable, the following additional background reports will be necessary for certain jobs:

  • Driving record checks – Will be performed for positions that require driving
  • Credit record – Only used where allowed by law and for jobs in industries requiring credit checks such as the financial services industry

Procedure

Finalists for positions are required to provide written authorization and return the form to the hiring manager or human resources. However, in states with laws that require employers to make a conditional offer before conducting a pre-employment screen, they should ask finalists to sign written authorization when the employer extends the conditional offer.

The background check will be ordered once human resources receive the signed authorization form. The background check will be performed by an employment background check service or by HR staff.

A designated HR professional will review the results and inform the hiring manager about them. In cases in which incomplete or negative background information is revealed, the HR director and management will assess the potential liabilities and risks as they relate to the requirements of the job and determine whether or not to hire the candidate.

If they determine they should decline the applicant, they must then adhere to the adverse action process under the FCRA before making the final decision.

The company will keep information from background checks in a separate file away from the employees’ personnel records for at least five years.

[Employer Name] has the right to modify or update this policy without notice at any time.

Best Practices for Developing a Background Check Policy

To help you ensure that you are following best practices when conducting background checks, we have detailed four background check policy best practices below.

1. Policy Applies Across the Company

Background check policies should be created and implemented company-wide, including for executives.

You should determine whether you only want to screen prospective candidates, existing employees, or both.

More companies are choosing to perform routine employment background checks on existing employees to ensure that they are aware of any issues that might arise after an employee has been hired.

Under recommendations from the Equal Employment Opportunity Commission (EEOC), background check policies should state that all prospective applicants will undergo background checks once a conditional offer of employment is made and that existing employees will undergo post-hire screens at set intervals.

This helps to ensure that applicants and employees are treated consistently and fairly.

A company-wide background check policy should be specific for different roles. For example, employers can choose different background check packages from iprospectcheck based on the specific tasks of the position for which a candidate is being considered.

2. Policy Applied Consistently

Pre-employment background checks must be consistently applied. If background checks are only conducted on certain applicants or employees but not others, the company might face discrimination lawsuits.

Establish guidelines for the types of background checks you will conduct for applicants at different employee levels. Make sure that you follow the same process for all applicants who are being considered for positions at the same level. Applicants for positions at the same level should receive the same types of background checks.

You should also make sure that you apply your criminal record background check policy and how convictions affect your hiring decisions consistently. Make sure to individually assess criminal convictions as they directly relate to the requirements of the job.

Consider the type of position for which the applicant is being considered and the nature of the conviction. Look at how much time has elapsed since the applicant was convicted. Give the applicant a chance to provide clarifying information before making a final decision not to hire him or her.

3. Employment Background Check Policy Complies With the Law

Your background check policy must comply with all applicable local, state, and federal laws. When you conduct a pre-employment background check, you must comply with the FCRA, Title VII of the Civil Rights Act of 1964, any ban-the-box laws, and other relevant state and local laws.

The policy should also include information about the timing of background checks. Employers are allowed to conduct employment background checks at any time after they secure consent from the candidates under federal law. However, states and localities with ban-the-box rules might prohibit conducting background checks until after an interview or after a contingent offer has been made.

However, even if your state or locality does not have a ban-the-box law, it still makes sense to only order background checks for finalists. That helps to reduce the costs of running background checks.

You must also obtain your applicants’ written consent before you can conduct background checks. If you decide not to hire an applicant based on information contained in a background check report, you must follow specific steps under the FCRA before making a final hiring decision.

If you will conduct routine background checks at regular intervals on existing employees, you might want to include a notification that employees will be subject to periodic screens throughout their terms of employment and get their written consent.

4. Background Check Policy Is Regularly Reviewed and Updated

Laws governing pre-employment background checks frequently change. This makes it important for you to regularly review your company’s pre-employment screening policy and update it to reflect changes as they occur.

Your policy should also be updated as the needs of your business change.

iprospectcheck: Your Trusted Partner for Fast, Accurate, Compliant Employment Background Checks

Having a consistent employment background check policy can help you to ensure that you comply with all relevant laws when you conduct employment background checks. This can help to minimize risk and potential liability.

Conducting employment background checks requires companies to have access to extensive resources and can take more time than they might have. It is best to work with a reliable third-party screening company like iprospectcheck.

We have broad access to reliable databases and use cutting-edge research methods to quickly complete employment background checks in a manner that complies with all relevant laws. We stay current with changes to the laws as they occur.

To learn about the employment background check services we offer, contact iprospectcheck today.

DISCLAIMER: The resources provided here are for educational purposes only and do not constitute legal advice. Consult your counsel if you have legal questions related to your specific practices and compliance with applicable laws.

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About the Author
Matthew J. Rodgers

Matthew J. Rodgers

Matthew J. Rodgers is a highly accomplished business executive with over 30 years of experience providing strategic vision and leadership to companies ranging from the fortune 500 to iprospectcheck, a company which he co-founded over a decade ago. Matthew is a valued consultant who is dedicated to helping companies create and implement efficient, cost effective and compliant employment screening programs. Matt has been a member of the Professional Background Screeners Association since 2009 . When not focused on iprospectcheck, he can be found spending time with his family, fly fishing, or occasionally running the wild rivers of the American west. A lifetime member of American Whitewater, Matt is passionate about protecting and restoring America’s whitewater rivers.