Why Background Checks Matter
Background checks serve important purposes:
- Verify candidate claims
- Protect workplace safety
- Meet regulatory requirements
- Reduce liability exposure
- Make informed hiring decisions
But they must be conducted legally, ethically, and fairly.
Types of Background Checks
Criminal History
- County, state, and federal records
- Sex offender registries
- Ongoing monitoring (for certain roles)
Employment Verification
- Previous employers and dates
- Titles and responsibilities
- Eligibility for rehire
Education Verification
- Degrees and certifications
- Institutions attended
- Dates of attendance
Credit Checks
- Credit history and score
- Bankruptcies and liens
- Payment history
Note: Credit checks require special consent and are restricted in many jurisdictions.
Professional License Verification
- Current license status
- Disciplinary actions
- Expiration dates
Driving Records
- License validity
- Violations and accidents
- Endorsements
Drug Screening
- Pre-employment testing
- Random testing (if applicable)
- Various panel options
Social Media Screening
- Public posts
- Professional reputation
- Potential red flags
Caution: Social media screening has significant legal risks.
Legal Requirements
Fair Credit Reporting Act (FCRA)
The FCRA governs consumer reports, including background checks:
Before the Check:
- Provide clear written disclosure (standalone document)
- Obtain written authorization from candidate
- Include "Summary of Rights"
If Taking Adverse Action:
- Pre-adverse action notice: Provide copy of report and rights summary
- Waiting period: Give candidate reasonable time to respond (typically 5 days)
- Final adverse action notice: If proceeding, explain the decision and rights
State and Local Laws
Many jurisdictions have additional requirements:
Ban the Box Laws:
- Delay criminal history questions
- Varies by jurisdiction
- May apply to applications, interviews, or both
Salary History Bans:
- Cannot ask about previous compensation
- Growing list of states and cities
Credit Check Restrictions:
- Many states limit when credit checks can be used
- Generally allowed only for financially sensitive roles
Industry-Specific Requirements
Some industries have mandated checks:
- Financial services (FINRA)
- Healthcare (CMS requirements)
- Education (state requirements)
- Transportation (DOT)
Best Practices
1. Have a Written Policy
Document:
- What checks you conduct for which roles
- How decisions are made
- Who reviews results
- How disputes are handled
2. Be Consistent
Apply your policy uniformly:
- Same checks for same role types
- Same decision criteria
- Same adverse action process
Inconsistency creates legal exposure.
3. Consider Job Relevance
Not every issue is relevant to every job:
- Driving record matters for delivery drivers
- Credit history may matter for financial roles
- Old, minor offenses may not matter at all
4. Use the EEOC Guidance
The EEOC recommends individualized assessment:
- Nature and gravity of offense
- Time since offense
- Nature of the job
Blanket bans on criminal history can create disparate impact.
5. Allow for Explanation
Before making decisions:
- Let candidates explain circumstances
- Consider rehabilitation evidence
- Review court documents, not just charges
6. Protect Candidate Data
Background check data is sensitive:
- Limit access to those who need it
- Secure storage and transmission
- Proper retention and destruction
- Comply with data privacy laws
The Background Check Process
Step 1: Notification and Consent
- Provide standalone disclosure
- Obtain written authorization
- Explain what will be checked
Step 2: Order the Check
- Use reputable screening provider
- Specify scope based on role
- Request timely completion
Step 3: Review Results
- Look for job-relevant issues
- Consider context and recency
- Involve appropriate decision-makers
Step 4: If No Issues
- Proceed with hiring
- Maintain records appropriately
Step 5: If Issues Arise
Pre-adverse action:
- Send copy of report
- Include summary of rights
- Allow time to respond
Review response (if any):
- Consider additional context
- Make final decision
Final adverse action (if proceeding):
- Send final notice
- Explain decision
- Include rights information
Common Mistakes
1. Skipping Disclosure
Disclosure must be standalone, not buried in the application.
2. Moving Too Fast
Don't skip the pre-adverse action notice or waiting period.
3. Blanket Policies
Automatic disqualification for any criminal record is problematic.
4. Inconsistent Application
Different standards for different candidates invites litigation.
5. Investigating Too Deeply
Requesting more information than necessary can create problems.
Selecting a Screening Provider
Consider:
- FCRA compliance: Essential
- Accuracy: Errors create problems
- Turnaround time: Balance speed and thoroughness
- Coverage: Geographic and type capabilities
- Integration: Works with your ATS
- Support: Help when issues arise
- Cost: Understand the full pricing
When Candidates Dispute Results
Candidates have the right to dispute inaccurate information:
- Take disputes seriously
- Have the provider reinvestigate
- Don't make decisions during dispute resolution
- Document the process
AcquireTM integrates with leading background check providers to streamline your screening process. See how.
