Finding just the right person to fill a position in your company can be a difficult feat. There are resumes to review, the interview—maybe even a few of them—and then if that goes well, there’s the employee background check.
Though it may be more daunting for them than for you, this complete guide on how to run a background check for employment will help ease any anxieties you have about the background check process.
While we can’t guarantee you’ll like what you see on your potential employee’s report, after reading this article, you’ll know how to run compliant background checks on future job candidates.
What is a Background Check?
A background check is a way to learn detailed information about a potential employee’s history.
While you may be able to gain some insight from the applicant’s resume, and they may even divulge some personal information during their interview, a professional background check goes into detail about the candidate’s background. It gives you information regarding their past, which will help you make an informed decision when it comes down to the hiring decision.
While it’s illegal to discriminate based on someone’s race, color, national origin, sex, religion, or disability—and there are certain questions regarding medical conditions and age you should always avoid—conducting a background screening is completely legal.
A thorough pre-employment background check will provide you with valuable information you may otherwise never know — and you can use it to make an informed decision about who you hire, so long as your decision isn’t based on one the those protected categories.
More than just gathering information about a potential employee for the sake of knowing them better, a background screening is also a way to protect your company. As an interviewee, it’s easy to sing your own praises during a job interview. Background checks make sure all the praises are truthful and that the person you are hiring is who they say they are.
What Does a Background Check Show? 11 Most Common Background Checks
When you hear the words “background check,” you probably think of checking someone’s criminal record. And while this is an aspect of background checks, background screenings cover a variety of categories and provide various types of information relevant to a person’s history.
Depending on the type of employee background check you conduct, a screening can include information about a person’s educational background, work history and financial history. Along with a candidate’s criminal record that includes any arrests or convictions, the screening can also include their driving record and tell you if they are a registered sex offender.
1. Employment Verification
While a job candidate will likely disclose their past work experience on their resume and job application, conducting a background check that includes employment verification allows you to be sure they have the experience they claim to have. This includes checking their past job titles, timeframe of employment, salaries, and more. It’s important that you are hiring the best person for the position, and false experience just won’t do the trick.
2. Credit Checks
While credit checks do in fact check credit, they also cover a lot of personal information including present and past addresses and social security number, as well as any present or past debts, payments, and late payments. Doing a background check that includes a credit check helps you feel confident the person you’re hiring is truthful and responsible.
3. Criminal Records
This one is pretty straight forward: you’ll want to do a criminal background check to ensure the individual you are hiring won’t be a danger to your company or to other employees. It is important to consider the type of offense that was committed, as well as the time that has passed since the incident.
However, it is important to note that under the Equal Employment Opportunity Commission (EEOC), there are certain guidelines as to whether an employer can choose not to hire someone based on arrests or convictions found during their background check.
Because an arrest doesn’t mean the said person was actually found guilty of committing the act, there are no grounds to deny employment, unless further investigation shows clear wrongdoing. Even more, if a person does have convictions that appear on their background check, the EEOC guidelines recommend extra consideration be taken to ensure the convictions are accurate before denying employment based on these findings.
4. Universal Background Check
A universal background check is different than a pre-employment background check. This refers to the type of background check that is performed when someone purchases a gun from a licensed dealer, manufacturer, or importer. The seller is required to complete a universal background check on the buyer through the National Instant Background Check System to check whether the person is eligible to buy a firearm.
There are several reasons why someone might not pass a universal background check to purchase a gun, including felony convictions, misdemeanor or felony domestic violence convictions, open arrest warrants, undocumented status, fugitive from justice status, and others. The Federal Bureau of Investigation conducts NICS background checks, and the U.S. Bureau of Alcohol, Tobacco, and Firearms oversees the process.
5. Office of Inspector General (OIG) Background Checks
The U.S. Department of Health & Human Services Office of Inspector General keeps a list of people and businesses that have been excluded from working in health care due to committing certain types of health care crimes. These people are not allowed to work in health care programs that receive funding from the federal government.
If you are in the health care field, completing an OIG background check before hiring an applicant or entity should be a routine part of your hiring process. This check is free and can be conducted by searching the OIG’s database using the applicant’s name.
If any results are returned, you can check them against your applicant’s date of birth and address. The reason for his or her inclusion on the excluded list will be given, and you can confirm that he or she is the right person by checking his or her Social Security number.
The following types of crimes will result in someone being added to the excluded parties list:
- Medicaid or Medicare fraud
- Other convictions related to Medicaid, Medicare, or other state health programs
- Felony convictions for financial misconduct, theft, and fraud
- Abuse or neglect of patients
- Felony controlled substance convictions
The OIG may add people to the list at its discretion or decline to add them for the following offenses:
- Misdemeanor health care fraud convictions unrelated to governmental programs
- Misdemeanor convictions for fraud in a program receiving local, state, or federal funding
- Misdemeanor controlled substance convictions
- License revocation, surrender, or suspension because of financial integrity, professional competence, or professional performance issues
- Filing false claims with a federal health care program
- Providing illegal kickbacks
- Being a managing employee, officer, or owner of an excluded entity
- Defaulting on health scholarship or educational loan obligations
Employers that hire people on the excluded list and who have failed to conduct the OIG background check could face penalties and fines. Employers could also be placed at risk of liability in negligent hiring lawsuits.
6. System for Award Management (SAM) Checks
The System for Award Management (SAM) is a system that allows government agencies and government contractors to search for the size, entity status, ability, location, and other information about businesses with which they are considering doing business.
Federal contractors might perform a SAM check to make sure a potential subcontractor has the ability to perform work before signing a contract and is not on the SAM exclusion list.
What is a SAM exclusion?
SAM exclusion records identify those parties excluded from receiving federal contracts, certain subcontracts, and from certain types of federal financial and non-financial assistance and benefits. These are also commonly known as “suspensions” and “debarments”.
7. Federal and State Fingerprint-Based Checks
The FBI maintains the Automated Fingerprint Identification System (AFIS), which includes more than 35 million fingerprint sets. Individual states may also allow certain types of employers to perform fingerprint-based background checks.
Fingerprint-based checks are frequently conducted as a part of the pre-employment background checking process and are mandatory for such employers as law enforcement agencies, fire departments, hospitals, airports, and public schools.
Fingerprint-based checks are also required for certain types of professional licenses, including licenses for attorneys, realtors, physicians, brokers, pharmacists, and casino workers.
When an employer conducts a federal fingerprint-based check, the applicant’s fingerprint card will be compared with the fingerprint sets in the AFIS system to check for criminal history information from criminal justice agencies. Any potential aliases used by an applicant will also be included.
Applicants for employment who are required to submit fingerprints will go to an authorized agency or organization to have their fingerprints inked or scanned and submitted. Individuals who want to see what their identity histories contain can pay a fee of $18 and send a fingerprint card to the FBI.
A fingerprint identity history summary for an individual might include the following types of information:
- Criminal history
- Military service
- Federal employment
When an employer conducts a state fingerprint-based background check, any results will be for that state only. The information that might be returned for a positive match includes state criminal conviction and arrest records.
While E-Verify is technically not a background check, it is a system enrolled employers can use to verify the eligibility and identity of an employee. This check is performed online and compares information supplied on the I-9 form with government records. E-Verify can help employers confirm whether an employee has valid authorization to work in the U.S.
E-Verify is required for certain types of private and public employers in 22 states, and its use is mandatory for certain federal contractors. However, its use is voluntary for most employers.
There are a few key differences between E-Verify and the I-9 form. Form I-9 is required for all employers, but E-Verify is voluntary for most. E-Verify requires a Social Security number and a valid photo ID, but Form I-9 does not. Employers are required to use Form I-9 to verify certain employment authorizations that are expired but may not use E-Verify to re-verify expired authorizations.
9. International Background Checks
If you are considering an applicant who has studied, worked, or lived overseas, you might want to request an international background check as a part of your pre-employment background screening process.
An international pre-employment background check allows you to get international information about an applicant’s foreign employment, education, and criminal history. With iprospectcheck, you can choose which of these types of international information you need for a candidate or request checks of all three.
The documents that might be required to perform an international check will depend on the country. If you need an international background check for an applicant, iprospectcheck can explain what you will need to submit.
10. Education Verification and Credentials Check
You can also verify the educational background and professional credentials of applicants. With an education verification, you can confirm whether the applicant has received the diplomas, degrees, and certificates your positions require.
An education verification will allow you to see every educational institution the applicant attended, his or her attendance dates, and any diplomas, degrees, or certificates that were awarded.
For positions requiring professional licenses, you can also request a professional license and credentials check. This type of check will reveal whether the person has the required licensure and if his or her license is current, valid, and in good standing.
Verifying that your applicants have the education and licenses that you need can allow you to confirm that they are qualified for your positions and are trustworthy. This can help to protect your business from negligent hiring lawsuits.
Numerous industries require professional licenses to show that people holding them have the knowledge, experience, credentials, and ethics required to perform their jobs. Some examples of positions that require these types of licenses include the following:
- Certified Public Accountants (CPAs)
- Financial planners
- Massage therapists
CRAs will typically contact the state licensing board to verify the applicant holds the license and that it is in good standing. A credentials check will also show whether there are any restrictions on the license or if disciplinary sanctions have been issued against the holder.
11. Sex Offender Registry Check
Sex offender registry checks might be important to include in your business’s pre-employment screening process. However, it illegal to include sex offender registry information in background check reports in some jurisdictions, depending on the types of jobs for which employers are hiring.
While you can check the sex offender registry in your state, it will not include information about sex offender registries in other states. The Department of Justice maintains a list of all of the sex offender registry websites in the U.S., including state sex offender registries, U.S. territory sex offender registries, and tribal sex offender registries. However, performing an individual search of each website would entail a time-consuming process for employers.
A sex offender registry check performed by iprospectcheck will reveal whether an applicant appears on the sex offender registry of any state, tribal authority, or U.S. territory.
The following types of businesses are required to perform sex offender registry checks on applicants and volunteers before hiring them in most states:
- Childcare facilities
- Health care facilities with direct patient care
- Agencies for the developmentally disabled
- Nursing homes
- In-home care agencies
- Government agencies
- Elder care agencies
If an applicant is a registered sex offender, you will receive his or her name, type of offense, date of offense, the severity of the offense, aliases, and other key details.
When you receive this type of information on an applicant, you should complete a risk assessment of the offense as it relates to your open position and document it. You might also want to talk to your attorney about the laws in your state about considering information about sex offenders when making employment decisions.
Why would an employer need to know all of this information about a potential employee?
Knowing all of these details will help ease any uncertainties you have about a job candidate and help you determine if the person of interest is truly a good fit for your company.
While a background check is definitely not the only factor you should consider when deciding whether or not to hire someone, it does help paint a full picture and give you a broad understanding of the person’s experiences, successes, and stability.
What Can Disqualify You on a Background Check?
There are multiple ways an applicant can be disqualified for a job based on a pre-employment background check. Some of these include having a criminal record, claiming more education than you have, having a poor driving record or credit record, falsifying your employment history, and failing a drug test. Each of these red flag issues is detailed below.
Having a Criminal Record
The National Conference of State Legislators reports that an estimated 77 million Americans have reportable criminal records for employment background checks.
Whether or not an applicant might be disqualified for employment based on a criminal record will depend on multiple factors, including the particular job for which he or she has applied, regulations that apply to the industry, and others. In some cases, denying employment to someone based on his or her criminal record might be considered to be unlawful discrimination.
Fluffing Educational History
Some applicants try to fluff their resumes by claiming educational qualifications they have not received. However, doing this is never a good idea. When an employer requests an education verification as a part of its pre-employment background check, the employer will be able to confirm the applicant’s degrees, diplomas, certificates, educational institutions attended, and the dates of attendance.
Having Poor Credit
Some industries check the credit records of applicants. For example, applicants may have their credit records checked to obtain federal security clearances or work for financial institutions. Some states restrict the ability of employers to rely on credit history information when making employment decisions, however.
If an employer is allowed or required to request a credit check on an applicant and spots problems, the employer might have concerns about the applicant’s financial responsibility and integrity.
Having a Poor Driving Record
For applicants applying for jobs in which they will have to drive a company vehicle or a commercial truck, driving records checks are commonly requested. This type of check helps employers to ensure that their applicants have the required driver’s licenses for the positions and are insurable through their commercial insurance companies.
An applicant for a position for which driving will be required may be disqualified for the job based on a poor driving record. Without this type of check, the employer might face insurance and legal consequences if the applicant is hired and causes an accident while on the job.
Falsifying Past Employment Information
Most employers request employment verification to confirm that their applicants have held the positions they have claimed and their employment dates at each employer. When an employer discovers that an applicant has falsified past employment information on his or her resume, the candidate will be unlikely to be hired for the job.
Failing a Pre-employment Drug Test
Employers can face significant liability risks when their employees use illegal drugs. If an employer requests pre-employment drug testing and finds that the applicant has used an illicit substance, the employer can use that information to make an adverse hiring decision.
How to Run an Employee Background Check
Now that you know what a background check is and why they are so important to the pre-employment process, you may be wondering, what do I need to run a background check?
Before you run an employee background check, here are a few things you should know:
If you decide to go the more convenient route and choose a background check company like iprospectcheck to run an employee background screening for you, there are vital steps you need to take to ensure you follow all legal regulations, especially if you use the results of a background check as a reason not to hire someone.
Third party companies that run background checks must comply with the Fair Credit Reporting Act (FCRA), which protects the personal information of the applicant who is going through the screening.
The Fair Credit Reporting Act (FCRA) and Background Checks: What You Need to Know
Passed by Congress in 1970, the Fair Credit Reporting Act is meant to protect consumers with the privacy of their information that is held by consumer reporting agencies. This law is regulated and enforced by the Federal Trade Commission.
While this law was initially meant to protect financial information, its scope has been expanded significantly to include information on pre-employment background checks that consumer reporting agencies (CRAs) like background check companies report and how employers must handle the screening process.
To ensure compliance with the FCRA, you’ll need to do the following:
- Provide notice to the applicant that the employer will be completing a background check.
- Get the consent of the candidate to complete the background check.
- Provide the applicant with a copy of the “Summary of Consumer Rights under the FCRA”
- Provide the application with the name, address, and telephone number of the agency producing the report.
Under the FCRA, job candidates must be informed that they will undergo background checks, and they must provide authorization before a check is performed by an employer.
After a report is received, prospective employees have a right to review the reports and correct anything inaccurate. They also have the right to be informed when problematic information in background reports is used to make adverse hiring decisions. Finally, they also have the right to appeal an employer’s decision if they believe that it was unfair.
Under the FCRA, employers can only use information from a pre-employment background check to ensure that the applicant is a fit for the job. The written disclosure must be given to an applicant that he or she will undergo a background check, and written consent must be obtained before it can be completed. The candidates also must be told about their rights under the FCRA to review a copy of their background reports and to correct any inaccurate information.
If you decide to deny an applicant a job due to what is found on their background check, you must follow the Adverse Action Notification process. This process includes sending a letter to the applicant explaining what information was found that denied them the position, as well as informing them of where they can get a copy of this report.
Always include a copy of the most current and updated form titled, “Summary of Your Rights Under the Fair Credit Reporting Act”. Taking these steps ensures you are following the FCRA regulations.
If you decide to run a pre-employment background check yourself, without the help of a third-party company, be ready to do some digging… and most likely not get all the answers you need. While you may be able to sift through public records and search online databases, you won’t have access to all of the information available and may even be charged for extended searches.
But be careful:
You’ll want to ensure you don’t break any laws by making employment decisions based on one of the protected categories. Remember, it’s illegal to conduct a pre-employment background screening on someone because of their race, color, national origin, sex, religion, or disability.
While you may want to know, asking someone about their medical or financial history during an interview can get you in some big trouble—even if they’ve shared the information publicly on social media.
At iprospectcheck, we comply with the FCRA to ensure that our clients receive accurate, up-to-date, and FCRA-compliant information.
How Long Does a Background Check Take?
If you are urgently hiring for a position, you may feel anxious to get a job candidate’s background check completed as soon as possible. Companies like iprospectcheck have the software and the talent to return background checks very quickly, with packages that can get you your desired information in less than one business day on average. Other methods, such as DIY background checks, may take much longer to complete.
How Far Back Does a Background Check for Employment Go?
Employers and consumer reporting agencies in every state must comply with the FCRA when they conduct background checks.
Some states also have laws about reportable information and how long it can appear on background checks. Under the FCRA, criminal history information from more than seven years ago is restricted from being reported and used to disqualify applicants. Depending on your state, there might also be other laws that apply. The FCRA’s limitations do not apply to salaried positions paying $75,000 or more.
While it is possible to find criminal history information for an applicant that dates back for more than seven years, you should avoid making hiring decisions based on that type of information. There are other types of information on the pre-employment background checks that iprospectcheck provides for which the time restrictions do not apply.
For example, the FCRA does not limit how long employment verification information, education information, or credentials information can be reported.
How Much Does A Background Check for Employment Cost?
How you conduct a background check will affect how much it costs. Most states have central repositories for criminal records and allow employers to submit signed authorizations from applicants to secure the information for a fee.
However, this type of information is not complete and will not include other pertinent details about an applicant’s education, work history, or credentials.
Trying to search an employee’s history online is not a good approach. The information that you find might be inaccurate and not up-to-date.
While you may find some free background check companies offering their services during a quick Google search, free isn’t always as great as it seems.
Free background check services aren’t comprehensive or accurate. But more importantly, free background check services often fail to meet the legal requirements, like those set by the FCRA we mentioned earlier.
The best alternative is to work with a qualified background check provider like iprospectcheck. We offer several different packages to meet the needs of our clients as well as add-on reports.
For businesses that need from 25 to 50 pre-employment background checks per year, our prices are as follows:
- $19.95 – Per report cost for a basic report that includes identity verification, a national criminal database search, and a national sex offender registry search
- $39.95 – Per report cost for a standard report that includes all of the information from the basic report as well as a search of the global terrorist watchlist and a seven-year county criminal records search
- $69.95 – Per report cost for a premium report that includes everything on the basic and standard reports as well as education verification and employment verification
These prices do not include set-up fees or third-party fees that might be incurred. If your company anticipates needing employment background reports at a high volume, you can contact us for a quote.
What Is the Best Background Check Service for Employers?
When employers are searching for a reputable third-party pre-employment background check provider, they should consider the following factors:
- Does the CRA comply with the FCRA and state and local laws?
- Does the CRA provide comprehensive and accurate background check reports?
- How well does the CRA’s technology integrate with your company’s software and systems?
- What technological resources does the CRA offer?
- How quickly does the CRA return background check reports?
- Does the CRA have experience with your industry?
- How does the CRA protect confidential and private data?
- Does the CRA offer tailored solutions?
What company do employers use for background checks? Many have opted to use iprospectcheck.
At iprospectcheck, we are fully FCRA-compliant and stay current with all applicable regulations and laws. We have experience completing employment background checks for companies in every state across a broad range of industries, and we feature fast turnaround times of as little as a few hours.
The information we provide is comprehensive and accurate, and we have broad access to advanced technological resources and databases to quickly find the information you need. Our pricing is affordable and flexible, and we offer tailored solutions to meet our clients’ needs.
Finally, we do not offshore our pre-employment background check services and strive to protect the sensitive information of our customers.
iprospectcheck: Your Background Screening Partner of Choice
Doing pre-employment background checks on potential employees is a valuable step in ensuring you are hiring the right candidate for the job. Background checks provide important information about a potential employee’s criminal record, financial history, work and educational background, and more.
Are you ready to start running FCRA-compliant background screenings on your potential employees? When you partner with iprospectcheck, you can be confident you are receiving the most information at the best price.
Contact us today to learn more about our background check packages and to get a free consultation. And be sure to share this article with colleagues so they can learn how to conduct compliant and efficient pre-employment background checks.
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.