What Is Background Checking?

Employers Need to Do Background Checks So They Know Who They're Hiring

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Background checking is the process of authenticating the information supplied to a potential employer by a job applicant in his or her resume, application, interviews, and references.

In most application processes, lying about their background and credentials will keep the employer from hiring the applicant. Finding out at a later date that the candidate lied about any aspect of their background usually means employment termination.

Why Employers do Background Checks

Background checking ensures the employer that the candidate has the background, education, and experience claimed. This makes the employer reasonably assured that the prospective employee can do the job they are hired to do.

Additionally, if it is determined at a later date through a background check, that an employee lied about credentials, qualifications, experience, education, and so forth, the employer may fire the employee. This assumes that the employee signed a statement attesting to the truth of his or her provided information as is the case on all job applications.

A lot of people have the idea that a background check is like you'd see in the movies, where someone goes through your trash and scours your Facebook page in order to dig up any little bit of dirt possible. But, that's not really how a professional background check is supposed to work.

It is a confirmation practice in which the employer ensures that the candidate-provided information is accurate. The employer hopes to find that it is—they've done a lot of work to reach the point of background checking a potential employee.

What Background Checks Do Employers Do?

Common background checks include the employer checking these aspects of a candidate's credentials.

Verification of education and academic credentials.

The company will check with the college or university from which you graduated to verify that you have the degree that you said you have. Sometimes people caution you not to give dates for degrees as that can be a proxy for age.

That's generally a good idea on your résumé, but not necessarily on a job application, which is what most companies use for the background check. They need the date to verify the degrees. Additionally, if you've changed your name since graduating, you'll need to provide your former name. Don't panic about this. It's super common, especially for women.

Verification of prior employment including position, longevity, salary, and job performance.

To verify this employment information sometimes employers do background checking back ten years or to the prospect's three prior positions. There are two types of reference checks. The first is simply an employment verification. This is either done through a phone call to your former company's HR department where they say, “Did John Doe work for you as a Senior Technical Analyst from 2012-2019?” and the HR person says “yes” or “no.” Some companies will volunteer more information and others will simply verify, most often on a form.

Other reference checkers prefer to verify your previous employment by looking at your W-2s or other tax records. That's the easy part, and as long as you've been truthful, all is well. (This last practice is increasingly discouraged so make certain that you know the laws of your federal, state, or international jurisdiction to make sure that you are legally compliant. For example, Rhode Island prohibits employers from asking for W-2s and other tax information.)

Discussions with business, professional, and personal references and verification of letters of recommendation.

The other half of the reference check is speaking with your former managers and (sometimes) coworkers. Many people believe that you have to give permission for someone to contact your boss. This is false. Many people also believe that your boss can't do anything other than verifying employment. This is also false. As long as everything the references say is true, they may speak about your work assuming their organization's policy allows them to provide information.

Drug screens and occasionally, physical exams.

Some jobs require drug screens and others require that the employee passes a physical exam. Employers need to ensure that they are fair and that they do not discriminate if they require drug screens which in an average office or plant work environment is not recommended. The need for physical exams should link directly to the nature and contents of the job. In most jobs, a physical examination should not be required.

Testing to confirm skills and knowledge.

Depending on the job, some employers require testing to confirm skills. An example is a customer service position that must handle customer service by email. A candidate may find he or she has to produce a sample email in response to a customer complaint.

Other jobs have required, for example, a senior manager to make a presentation about how she'd approach increasing sales. Applicants for an HR recruiter position might have to produce a recruiting improvement plan. The employer is ensuring that the candidate has the promised knowledge and skills prior to making a job offer.

Doing an online search on the candidate's name.

Employers frequently search online, especially at Google.com and LinkedIn.com to confirm an individual's claims about their jobs, performance, awards, and more. This isn't generally a part of an official background check and is usually carried out before an interview.

The recruiter or hiring manager simply performs a search on the internet for information about you. There's a lot of controversy over whether or not people should use the information they find out this way in their decision about hiring a job candidate. But, job searchers need to be aware that what they put online is accessible to any potential employer.

Criminal background checks for convictions.

Note, that this search is for convictions, not arrests. The Equal Opportunity Employment Commission (EEOC) says specifically, “Federal law does not prohibit employers from asking about your criminal history. But, federal EEO laws do prohibit employers from discriminating when they use criminal history information. Using criminal history information to make employment decisions may violate Title VII of the Civil Rights Act of 1964, as amended (Title VII)."

So, an official background check, done by a professional background checking firm, won't even show the prospective employer the charges against you unless they morphed into a conviction.

Especially for accounting and finance professionals, credit checks. 

If a job is involved in security or the handling of money a credit check is likely performed. You do have to sign a document allowing them to check your credit, so if that hasn't happened, you don't need to worry about the potential employer doing a credit check.

Additionally, the EEOC strongly cautions against the over-use of credit checks. "Federal law does not prevent employers from asking about your financial information. But, the federal EEO laws do prohibit employers from illegally discriminating when using financial information to make employment decisions.

"First, employers must not apply a financial requirement differently to different people based on their race, color, national origin, religion, sex, disability, age, or genetic information.  

"Second, an employer must not have a financial requirement if it does not help the employer to accurately identify responsible and reliable employees, and if, at the same time, the requirement significantly disadvantages people of a particular race, color, national origin, religion, or sex."

Background checking is usually conducted by Human Resources professionals, but occasionally, the manager or supervisor of the position being filled assists, especially with reference background checking. Occasionally, an outside firm is hired to do background checking for the employer.

The Bottom Line

Additionally, background checks of people who are candidates for the same job should be the same. A clear connection should exist between the background checks conducted and the requirements of the job or of basic employment. This is the guiding principle for all pre-employment background checking.

Please note that the information provided, while authoritative, is not guaranteed for accuracy and legality. The site is read by a world-wide audience and ​employment laws and regulations vary from state to state and country to country. Please seek legal assistance, or assistance from State, Federal, or International governmental resources, to make certain your legal interpretation and decisions are correct for your location. This information is for guidance, ideas, and assistance.

Article Sources

  1. Society for Human Resources Management. "Asking Job Applicants for W-2 Forms Is Risky Business." Accessed April 30, 2020.

  2. U.S. Equal Employment Opportunity Commission. "Pre-Employment Inquiries and Arrest & Conviction." Accessed April 30, 2020.

  3. Federal Trade Commission Consumer Information. "Background Checks." Accessed Apil 30, 2020.

  4. U.S. Equal Employment Opportunity Commission. "Pre-Employment Inquiries and Financial Information." Accessed April 30, 2020.