How to Conduct Employee Background Checks

Use background checks legally.

While it’s easy to understand the benefits of a background check, you need to know when and how background checks cannot be used. According to the U.S. Equal Employment Opportunity Commission, employers may not use medical and genetic information to make employment decisions. Thus, any background information you obtain cannot include medical or genetic information. If it does, you will risk the appearance of discrimination.

Similarly, employers cannot use background checks or information obtained through a background check to deny equal employment opportunities to anyone on a protected basis. 

That means you cannot use a background check to discover someone’s protected class and then make an employment decision based on that information. Protected classes involve race, religion, skin color, sexual orientation, gender identity, age (over 40), ancestry, ability status, ethnicity, sex, pregnancy or parenthood status, military or veteran status, or HIV/AIDS status.

As long as you do not use the background information of a candidate or employee for discriminatory purposes, you should be using background checks pursuant to state and federal laws.

What to do before you conduct a background check.

Before you ever conduct a background check, there are some steps you need to take, including:

1. Certify the company that is conducting the background checks.
2. Comply with Fair Credit Reporting Act (FCRA) requirements.
3. Tell the job candidate you will be using their information for a background check.
4. Get the individual’s written permission to do a background check.
5. Provide the nature and scope of any investigative report to the applicant.

It’s essential that you consistently complete background checks. Although you do not have to do a background check on every job applicant, you should conduct one of every candidate that gets to a certain stage of your hiring process. Since background checks can be expensive and timely, you might opt to do them only on people to whom you have extended an offer.

Types of background checks.

There are various types of background checks that you might use in your organization. In fact, you might use some types for certain positions and other types for different positions. Your decision regarding which background checks to use should be consistent across your organization.

Criminal background checks.

Various states, cities, and counties store criminal records differently. This can make it difficult to conduct a thorough criminal background check. In fact, a central repository with criminal records from all areas of the country does not exist.

The best way to do a criminal search should include three different components:

1. A nationwide criminal database or multi-jurisdictional database search
2. A Social Security trace or skip trace
3. County-level criminal searches for locations where the individual has lived

Most background screening companies offer national criminal database searches—however, the quality of these varies by provider. You should never rely on this type of search alone.

A Social Security trace or skip trace is an inexpensive way to find out if the information provided by the candidate is accurate. This may reveal information about past employment, where they have lived, and other essential details about their lives.

However, the most accurate information you’ll find about criminal histories is at the county level. County-level records can typically be searched through public access archives. The trick is that you need to know which counties to search. That’s why it’s important to get an accurate record of where the individual has lived for the last seven to 10 years.

Many companies do not shy away from hiring someone with a criminal record. However, you should have clear policies regarding violent crimes, financial crimes, and other histories where your organization might draw the line.

Educational background checks.

Educational and training history can be complex to verify. In some situations, you may be able to make a call to the higher education institution and verify a degree. However, with the growing number of online degree mills, you must be wary of diplomas.

Some degree mills will allow individuals to select graduation dates, grades, subjects, and other details of their fake education. Simply looking at a transcript may not reveal an actual educational history. Investigate the validity of the school, as well as the education that the candidate received.

Credit checks

There are specific laws, including the FCRA, that dictate how and when a credit check may be used when hiring job candidates and making employment decisions. The goal is to avoid discrimination, but allow employers to have security that their employees are responsible and will not commit fraud of any kind.

A credit report will show more than a full credit history. It will also include payment histories, civil judgments, tax liens, bankruptcies, unpaid bills, and recent credit inquiries. Credit checks are especially important for jobs that have access to financial assets.

Driving record check.

If your job candidate will be driving as part of their employment, then you should conduct a driving background check. You can do this by obtaining a motor vehicle report, which will confirm license validity and reveal driving history, including DUIs/OVIs, suspensions, and moving violations.

Other types of background checks you might use.

There are other background checks that you might use for potential job candidates or employees, including:

• Civil court checks – County and federal court searches can determine if an individual has a non-criminal court history. This would include small claims, restraining orders, bankruptcies, and other issues. This may be important for anyone handling finances or with management responsibilities.
• Drug screening – Drug testing is part of the background check for many employers. However, there are some new laws regarding using test results involving marijuana in some states. Be aware of how you can use positive test results and avoid discrimination if the individual uses marijuana on their own time.
• International background checks – This can provide information about international criminal records, education credentials, and an employment history outside of the United States.