What to Look For in Employee Background Checks


“You are only as strong as your weakest member” is a valid quote that emphasizes the importance of each team member in a company. To ensure the success and growth of your business, you should hire suitable candidates with credible backgrounds. With the high number of false certifications and stolen identities on the rise, employers should consider employee background checks to help verify candidate information.

Using one of the best FCRA-compliant background check sites, you will obtain reliable information on a potential employee. In a background check report, you will find information on their criminal record, history of employment, address history, and credential verification. It’s important for employers to consider these factors to ensure the safety of their working environment.

To help you make the right steps when doing a pre or post-employment background check, we will cover the following topics in this article:

  • Steps to take before doing background checks
  • How to do an online employee background check
  • What information is in a background check
  • FAQs

Steps to Take Before Doing Background Checks

Since you’ll be accessing sensitive information on potential employees, you need to follow the right procedures. Before diving into their past, you should follow these steps to ensure fairness and consistency:

Consult Legal Representatives

When conducting criminal background reports, you might be accessing sensitive information. It is illegal in some states to access certain information about someone’s background. Don’t assume that any background check is legal and permitted until you have consulted a lawyer. This will ensure that your company doesn’t infringe any laws.

A professional lawyer will advise you on how to conduct your employment criminal background checks and how to set up a policy.

Set Up a Policy That Is Consistent

All potential employees and employees should be treated fairly when it comes to a background check. To avoid gray areas and to ensure all members understand what the background check entails, your company should have a consistent policy. All candidates who come for a job interview should get a copy of your background check policy as well as an explanation of its purpose.

Each position within the company can have its own set of requirements. This means that all candidates won’t be required to pass every employment screening check. Employers might need drivers to have a clean driving record, whereas office employees won’t be assessed in the same way. All of these inconsistencies need to be addressed in your background check policy to ensure that the requirements are clear and fair.

It is unfair for employers to do a pre-employment background check on certain candidates with specific backgrounds and not on others. Make sure that you state clearly why the background check is done and how it will affect the hiring process. When companies follow their own background check policies fairly, there will be no run-ins with the law.

Don’t Assume That the Report Is 100% Correct

Employers might lose great candidates for open positions if they don’t give them an opportunity to clear up misunderstandings. Not all background screening reports are 100% correct. Before making a decision based on the report, give the candidate an opportunity to review the information on the report and correct any mistakes.

To avoid such misunderstandings completely, employers should scout the best employee background checks websites and services.

When Should You Conduct a Background Check?

Because employee background investigations come at a cost, employers should conduct them at the right time and for the right reasons. Background checks should only be conducted on candidates that are shortlisted or in the final rounds of the hiring process. It’s also conducted on current employees who are applying for a promotion within the same company.

Employment screening shouldn’t be conducted to disqualify candidates. In some states, it is prohibited for companies to do a background check without an offer in hand. Consult a lawyer to make sure that you comply with all local laws.

Use FCRA Compliant Services

The Fair Credit Reporting Act (FCRA) governs all background checks regarding a candidate’s financial history in a fair and consistent way. In order for a company to access the credit history of a potential candidate, it should abide by the rules and regulations set up by the FCRA. These laws can differ from state to state.

Negative Outcome

When a company conducts a criminal background check for employment, the report might have a negative outcome. It’s important for the hiring managers and HR department to keep the company’s interests at heart when considering the seriousness of a negative background screening report. While at the same time, be considerate towards the candidate.

Will a candidate with a DUI conviction from 8 years ago be considered for a driver’s position versus a candidate with a DUI conviction from 1 year ago? Setting up a policy regarding negative outcomes will help hiring managers follow consistent criteria when ruling out candidates.

Steps on Conducting an Online Background Check for Employment

Your company follows standard operating procedures for other processes, you should do the same when conducting an online background check. Here are the recommended steps that should be followed:

Step 1 – Notify the Candidate

All candidates should be notified that there will be a background screening. This gives them some time to rectify any inaccurate information that they might have added to their resumes, as well as review their social media profiles and any outstanding fines. Candidates will also be able to prepare themselves for any follow-up questions that might come after a negative outcome.

Not only is it to the benefit of the candidate, but also to the company. In many cases, companies should get written consent from candidates that they have permission to perform a background check. You’ll need written consent to initiate online background screening. If a candidate refuses to sign the consent form, they won’t be considered for the job available.

Step 2 – Notify the Candidate of Any Third-Party Employment

Employers don’t need consent to conduct their own employee background checks like phoning references and checking social media platforms. If the employer is using a third-party employment screening company, however, they need written consent and they have to notify the candidate.

There are numerous background checks for employers available online. It’s advised that companies choose third-party employment screening services that are registered with the CRA (Consumer Reporting Agency) and are FCRA compliant.

Step 3 – Pre-Adverse Action Disclosure

A pre-adverse action disclosure is a letter that informs the candidate that adverse action might be taken against them upon negative screening outcomes. This letter should be accompanied by a full report of the Human Resources background check. Also enclosed should be a copy of their rights under the FCRA.

This will give the candidate the opportunity to gather evidence and provide proof of inaccurate information. It ensures fairness throughout the hiring process.

Step 4 – Adverse Action Notice

Employers can’t deny employment or further consideration after a negative outcome has been reported. This is why the pre-adverse action disclosure is given beforehand to give the candidate time to dispute. After a candidate’s dispute, the employer has the ability to review new results and other information before deciding whether to take action.

According to the CFPB (Consumer Financial Protection Bureau) and FTC (Federal Trade Commission), the action notice should only be given after the candidate has decided to dispute or withdraw.

Step 5 – Dispose of Sensitive Documents

Pre-employment background screening results should be securely disposed of. Either by incineration or shredding of hard copies or irretrievably erasing the digital copies.

What’s Included in a Background Check for Potential Employment? 

To ensure the potential employee’s information is credible and that they can be trusted, employers can request a few common searches. The following information is included in a background check report from a third-party background screening service:

Identity Verification

In order to confirm the validity of someone’s identity, a background employment check can verify their Social Security Number (SSN). By going through the Social Security Administration and Department of Homeland Security records the background screening service can confirm whether or not the SSN is valid.

To avoid employing someone who might have committed identity theft, it’s important to double-check their names, surnames, and identification with the state.

Credit History

Especially for candidates applying for positions within a financial department, it’s important to have background information on their credit history. A valid credit report can be conducted through credit bureaus. These credit reports contain information on debt owed, credit scores, and their standing with financial institutions.

If the position requires someone to handle money and gives access to company accounts, then excessive spending and debt can indicate irresponsibility.

Employment History Check

An employment history check will validate the candidate’s working history. Employers can phone references stated on the candidate’s resume, but even those can be false. Verifying workplaces is important for establishing a clear professional outlook on the candidate. It can help employers figure out whether they have the relevant employment experience needed for the current position and whether they are trustworthy.

Driver’s History

Employers can request an MVR (motor vehicle report) which holds all the information on the candidate’s driving history. This includes any accidents and their license status. Especially if the employee needs to drive during work or transport passengers, it’s important to request an MVR. Roles like truck drivers, delivery drivers, company vehicle operators, and commercial drivers all need a driver’s history screening.

Understanding a candidate’s driving history will help your company hire a person that meets the Department of Transportation’s standards and requirements.

Criminal Records

Criminal records may only give information on criminal offenses at the state, federal, and county levels. Offenses like dismissed cases, misdemeanor convictions, acquitted charges, current pending charges, and felony convictions may be included in a criminal history report.

Additional information can be requested from employment screening resources online, especially for specific positions. When employees need to work with children, employers can request a sex offender registry check to ensure the employee isn’t a sex offender or predator.

Other information from background checks for employers can include information on education, travel history, and homeownership history.

Background check sites can be used as a simple Social Security number verification tool or something more thorough. Depending on the area’s restrictions, it can’t be used for some in-depth information like medical records, criminal records older than a certain period, bankruptcy older than 10 years, school and military records, and paid tax liens.

Why Are Background Checks Important for Employers?

A recent study has proven that 27% of companies have lost $50,000 per incorrect hire. To improve the quality of the hired candidates, companies are making pre-employment background screenings a permanent practice. It provides safety and security, especially in financial departments.

Hiring the right candidates, who are honest about their backgrounds, also allows for greater employee retention and a more productive working environment.

Wrap Up

The success of a business depends to a great extent on the company’s employees. Making sure that every person on the team has a credible background is important for the company’s future. Doing an employee background check will give you, as an employer, peace of mind, because you will know that you have hired honest and suitable candidates for the right positions.

Taking into account that hiring the wrong candidate can cost a company time and money, it’s worth investing in quality employee background checks before hiring.


What to do when the candidate insists that the information contained in the background report is not accurate?

Candidates can’t be denied employment based only on a report. They should be given a pre-adverse action disclosure that allows them the opportunity to dispute any inaccurate information. They can dispute negative information through a credit reporting agency and provide proof of incorrect information. Without any proof or dispute, adverse action cannot be taken.

Does a job applicant have to consent to a background check?

Although employers can’t force applicants to undergo a background check, applicants should consent to one before it can be conducted. If you refuse consent, then you might not be considered for the position.

Should I run an employment background check before making a job offer?

Many background screening companies require an offer on hand before conducting a background check on a potential employee. Job offers can be conditional stating that the applicants should first undergo employee background checks.

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