Background Checks for Employment

Illustration of detectives examining a computer, representing employment background checks.
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Surveys show that up to 94% of employers require employees to undergo some type of background check—sometimes including a credit check—during the hiring process.

Why do employers want this information? It could be for several reasons. For instance, if government security clearances are required for the job you are interviewing for, an employment background check may be required. For positions involving accounting or financial responsibilities, credit reports can provide insight into how financially dependable you are.

Before you agree to allow an employer to run a background check during the hiring process, find out what kind of information they can discover—and what your rights are.

Key Takeaways

  • Many employers conduct background checks during the interview and hiring process.
  • Employers must get your written permission before conducting a background check.
  • Depending on state law, a background check may include checking your criminal history, employment record, education, credit history, driving record, and online social media use. 

What Is a Background Check?

A background check is a review of a person's commercial, criminal, and (occasionally) financial records. Typically, an employer will contract with an outside vendor who specializes in background checks. The background check company will review your records to determine if you are who you say you are and whether there are any red flags in your personal or professional history. 

Depending on restrictions imposed by state law, these records might include your criminal history, employment record, education, credit history, driving record, and online social media use. 

When Employers Conduct Background Checks

Background Checks During the Hiring Process

Many employers conduct background and reference checks during the hiring process before offering a candidate the job. However, in some cases, a job offer may be contingent upon the results of the background check. That means the offer could be withdrawn if the organization finds negative information.

Which Employees Are Checked

Most organizations (90%) that background check prospective employees check all full-time employees, 83% check all part-time employees, 59% check contractors and temporary workers, and 44% check volunteers and other unpaid workers.

How Long a Background Check Takes

It typically takes 24–72 hours to conduct a background check, but it can take longer depending on the scope of the investigation and on whether additional research is needed.

Why Employers Conduct Background Checks

There are many reasons why background checks are commonly used in hiring. The employer may want to make sure you are telling the truth. It's estimated that over 30% of resumes can contain false or tweaked information, so employers want to ensure that you can do what you claim. Once they hire you, an employer may tout your qualifications to clients. If it is revealed that these qualifications are false, it will reflect poorly on the employer.

The employer may perform a background check to find out whether you actually graduated from the college you said you did or to confirm that you worked at your previous employer(s) during the time stated on your resume or job application.

These checks can also be used to protect employers from liability issues. If employees behave poorly, employers can sometimes be held responsible for negligence or for failing to do the research required.

For example, if a bus company hires someone with a poor driving record, they can be held responsible if the driver gets into a crash; the expectation is that a bus company should check the driving records of any candidate before hiring.

Employers Must Ask Before Doing a Background Check

Before running a background or credit check from a background check company, employers must request and receive written permission from you. If anything in the reports leads to the company deciding against hiring you, they are required to inform you and give you a copy of the report. These rules are regulated by the Federal Trade Commission (FTC) and are meant to protect you.

Having access to the report can be helpful. For instance, if something that turns up in your background check is incorrect, having that information will allow you to get in touch with the necessary organizations and agencies to correct the error.

While some information on your background check may be of legitimate concern to employers, these checks cannot be used as an excuse to discriminate. 

Employers must request background checks of all applicants equally. For example, it would be illegal to check the criminal records of male job candidates but not of females.

Employers cannot use background information to discriminate. Contact the Equal Employment Opportunity Commission (EEOC) if you suspect a background check was used in a discriminatory way. It is discrimination to make a hiring decision based on race, national origin, sex, religion, disability, genetic information, and age (for candidates 40 or older).

Information Included in a Background Check

What's included in an employee background check? The Fair Credit Reporting Act (FCRA) sets the standards for screening for employment. The FCRA defines a background check as a consumer report. 

Before an employer can get a consumer report or run a credit check using a background check company on you for employment purposes, they must notify you in writing and get your written authorization. In some states, there are limits on what employers can check.

Employment History Verification

Your employment history includes all the companies you have worked for, your job titles, the dates of your employment, and the salary earned at each of your jobs.

An employment history verification is conducted by an employer to confirm that the employment information included on your resume and/or job application is accurate.

Education Verification

Your educational history includes the schools you attended, including high school, college, and any professional accreditations. Employers may also check the dates you attended each institution.

Credit Checks

It's becoming more common for companies to run credit checks on job applicants and on employees being considered for promotion. Find out what information companies are allowed to check, how to handle a credit check, and how it might impact hiring.

What's in your credit report, and why is it relevant to employment? The information available from your credit report can hamper your job search and can be grounds for knocking you out of contention for a job. Bad credit can be a big issue, especially when it comes to jobs in which money and financial information are involved.

What Other Information Will Employers Seek?

Employment background checks are being conducted by employers more frequently than in the past. There are several reasons for this, including concerns over negligent hiring lawsuits. However, background checks don’t provide all the information many employers seek. If you’re interviewing for a new job, you can expect to encounter some of these requests for information:

Criminal Records and Background Checks

Laws on checking criminal history vary depending on your state of residence. Some states don't allow questions about arrests or convictions beyond a certain point in the past. Others only allow consideration of criminal history for certain positions.

Drug and Alcohol Tests

There are several types of drugs and alcohol tests that candidates for employment may be asked to take. Hiring can be contingent upon passing pre-employment drug tests and screenings. Review information on the types of tests used to screen for drug use, what shows up in the tests, and how employment drug screening can impact hiring decisions.

Eligibility To Work in the U.S. 

When hired for a new job, employees are required to prove that they are legally entitled to work in the United States. Employers are required to verify the identity and eligibility to work of all new employees. An Employment Eligibility Verification form (Form I-9) must be completed and kept on file by the employer.

References

One of the questions job seekers frequently ask is, What can an employer say about former employees? Some job seekers presume that companies can only legally release dates of employment, salary, and job title. However, that's not the case.

While most companies will refrain from badmouthing a former employee to a prospective employer, they are legally allowed to do so. Be aware of what a former employer might say before you begin the job interview process.

Frequently Asked Questions (FAQs)

Do employers have to notify applicants about the results of a background check?

If you are turned down for a job or a promotion because of the findings of a background check, the Federal Trade Commission requires that you be notified. You must be told the name, address, and phone number of the background reporting company, that you have the right to dispute information on your report, and that you have the right to get an additional free report from the background reporting company. 


What’s the best way to prepare for a background check?

The best way to prepare for a background check is to know what the report is going to say about you. You can get a free copy of your credit report and check your driving record with the state department of motor vehicles. If you have a criminal record, check state law to learn what information can be disclosed. Be sure the employment and educational history you shared with the employer are accurate. Some employers conduct drug screening, so be aware of that if that could be an issue for you.




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