A Complete Guide to Background Checks for Staffing Companies

staffing agency background checks

As a staffing company, you have the unique responsibility of recruiting, screening, and recommending short-term and long-term employees for positions within various companies.

While a candidate must do their part in presenting their qualifications and experience, running a background check on potential employees helps you determine the best candidate for the job. This results in successful placements and satisfied employers, giving you a positive reputation as a reliable staffing partner.

Founded by a staffing industry veteran, iprospectcheck has become one of the leading background check providers for staffing companies. iprospectcheck understands your background check needs.

This complete guide to background checks for staffing companies will help you learn everything you need to know regarding the process to help you save money and stay compliant.

Let’s start now.

What Kind of Background Checks do Staffing Companies Perform?

Background checks can verify and report a variety of information. As a staffing company, you work with many clients, each of which has their own needs, desires, and hiring procedures that must be met and followed.

It is important to know your client agreements, as they will generally include a section on what the required background check must contain to be hired at their company. Also, read your liability insurance policy. Many policies will only cover claims if the employees involved in the claim were background checked prior to their hiring.

Background checks for employment—what do they check?

An in-depth background check can protect companies from potentially dangerous, inexperienced, or unqualified candidates by searching and verifying an individual’s identity and reporting their:

However, background checks aren’t the only type of information that may be required during the screening process.

As a staffing agency, you’ll often find yourself needing to run other types of pre-employment tests as well, such as drug tests and required healthcare related services.

Choosing a background check company that offers a one-stop shop is invaluable, as you can get a candidate’s background check and applicable tests/healthcare services completed all in one place. This not only benefits you but makes for a better candidate experience as well.

How to Conduct a Staffing Industry Background Check

Experience, cost, speed, and accuracy are key elements to consider when deciding who will conduct your background checks.

If you go online and search “fast, free background checks,” there’s no doubt companies will advertise their seemingly too-good-to-be-true services. And while they may sound appealing, these services have a lot of downfalls, such as hidden fees and a lack of reliability, valuing speed over accuracy. They also often fail to comply with FCRA, state and local guidelines.

And while you may be able to do some digging yourself, requesting public records in states where they’re accessible, this is very time consuming and the cost of request fees can quickly add up.

Quality background checks lead to more hires, whereas slow, unresponsive background checking companies lead to missed opportunities.

So, how do you conduct a high quality, fast, cost-efficient background check without running into expensive legal issues or missing valuable information?

Ideal cost, speed, and accuracy are things you can get all in one place when you choose to hire a background check company like iprospectcheck that knows staffing and understands how important being responsive to your needs are.

How Do I Stay Compliant When Running a Background Check?

One of the most difficult aspects of running a background check is staying compliant. There are many rules and regulations regarding when a candidate’s background information can be accessed and how it can be used in determining employment. Along with federal guidelines, many states and cities also have their own rules for employers and staffing agencies to follow.

To ensure compliance during this process, you’ll need to carefully follow the Fair Credit Reporting Act regulations and other state laws, such as the Investigative Consumer Reporting Agency Act.

The Fair Credit Reporting Act

The Fair Credit Reporting Act, (FCRA) apply to all states, and must be followed to stay compliant. This includes,

  1. Informing a candidate of your intent to run a background check, prior to it being run.
  2. Getting the candidates authorization to do so.
  3. Informing a candidate of the company you’re partnering with to run this check.
  4. Following the federally required adverse action requirements when applicable.

What is Adverse Action and When do I Need to Take it?

Adverse action is taken when a potential employer decides to no longer move forward with a candidate due to information uncovered in a background check.

In such cases, these are specific steps you need to take to ensure compliance throughout this decision-making process.

  1. Provide applicant with a pre-adverse action letter explaining that you no longer wish to pursue their employment.
  2. Give the candidate a copy of their background check.
  3. Provide them a copy of the ”A summary of your rights under the FCRA” document.
  4. Give the applicant time to review their background check report and fix any potentially incorrect information with the background checking company.
  5. Review the candidate’s updated background report and decide if you would like to consider them for employment or still take adverse action.
  6. Send an official adverse action letter to the candidate if you still no longer wish to hire them for the position.
  7. Include another copy of the report.
  8. Include another copy of the ”A summary of your rights under the FCRA” document.

 Some states and local jurisdictions have additional requirements that iprospectcheck can help you understand and comply with.

If you choose not to hire someone based on this information, always follow the adverse action requirements to ensure you protect yourself from class action surprises.

Investigative Consumer Reporting Agency Act

If you’re running background checks in California, you also need to know about the Investigative Consumer Reporting Agency Act (ICRAA) that protects employees during background screening processes. These regulations are stricter than the FCRA regulations and supersede the FCRA when applicable.

According to the ICRAA, background checks may only reveal reports of convictions—whereas many other states allow information of arrests to be reported—and can only go back seven years from the date of disposition, release, or parole.

Moreover, under the ICRAA, the notification letter given to candidates prior to running a background check must include additional information regarding the nature and scope of the “investigation,” as well as a copy of a summary of the candidate’s rights in California.

The FCRA, ICRAA, and other state-specific background check regulations are in place to protect candidates during the hiring process. As a staffing company, lots of hiring equals lots of liability. Working with iprospectcheck will reduce that liability.

Why Should I Run Background Checks for Temporary Employees?

Companies work with staffing agencies to help them fill a variety of positions. However, most turn to these outside resources when they want to quickly fill a temporary job opening and don’t have the time or resources to recruit and screen candidates themselves.

Even though temporary employees may not be at a company for an extended assignment, it is still important to ensure you refer the best candidate to protect your reputation as a company. Therefore, you should conduct a background check on all potential placements, even if they are temporary.

Running a background check for temporary employees gives you additional information about a person that may have been misrepresented or not disclosed on their application, resume, or during their interview.

Studies show that a high percentage of individuals are dishonest on their job application and/or resume, often misrepresenting their past experience, education and qualifications.

iprospectcheck is The Leading Provider of Background Checks for Staffing Companies

iprospectcheck is your one-stop background screening partner of choice. With exceptional customer service, we will help you stay compliant while obtaining the pre-employment background checks, drug tests and healthcare services that you need to onboard effectively.

Contact us today to learn more about our affordable, fast, and accurate background check services.

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.

Know Before You Hire

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.