According to the Professional Background Screening Association, more than 96% of employers use some kind of pre-employment background screening. These can be simple, like reference checks or licensing reviews, or they can be reports on criminal background, credit, and employment verification.
In this guide, you will get expert insight into the type of background checks employers use, the legal parameters for background checks, and best practices for your organization.
What Background Checks Do Most Employers Use?
While there are overarching federal, state, and local regulations that govern background checks, the type of employee online background check you conduct also depends on the specific role and the industry you are in.
Here are some of the most common background investigations employers conduct when considering a potential hire.
- Criminal Background Check: This is the most frequently used type of background check. It reveals whether a candidate has any criminal convictions, charges, or legal infractions. Positions that require a high level of trust, such as those in finance or security, often require a thorough criminal background check.
- Employment Verification: This check verifies previous employment details, including job titles, employment dates, and why an individual left. It’s especially important for roles where specific experience is required.
- Education Verification: Employers often need to verify the educational qualifications a candidate claims to have. This check confirms the institutions attended, degrees obtained, and dates of attendance.
- Reference Checks: Conducting reference checks helps to go beyond static reports and understand how colleagues and co-workers view a potential hire’s capabilities.
- Credit Check: Particularly relevant for positions in financial services or roles that involve handling money, a credit check can provide insight into a candidate’s financial responsibility.
- Motor Vehicle Records Check: For roles involving driving, such as delivery drivers or anyone who uses a vehicle for work, an MVR check is essential. It reviews a candidate’s driving history, including any accidents, traffic violations, and license status.
- Drug Screening: Many employers require drug screenings to ensure that candidates are not using illegal substances. This is especially common in industries where safety is a top priority, such as manufacturing or transportation.
- Drug & Alcohol Verification: Certain industries have additional safety verification requirements, such as the Federal Motor Carrier Safety Administration (FMCSA) and the Federal Aviation Administration (FAA).
While some positions may only require a basic background check, you may want a combination of several checks. For example, executive positions might undergo a more comprehensive screening process, including criminal, financial, and more, to ensure there are no potential conflicts or risks that could harm your company’s reputation.
What Matters Most in a Background Check?
When conducting a background check, certain aspects should be prioritized to ensure a comprehensive evaluation of the candidate:
Relevance to the Role
The background check should be directly related to the role's responsibilities. For instance, a financial position may prioritize credit history, while a role involving driving would focus on motor vehicle records.
Accuracy and Completeness
Ensure that the information you receive is accurate and complete. Inaccurate data can lead to unjust decisions, while incomplete information can leave out critical red flags. The company you choose to provide your employee background checks online must prioritize accuracy. Making decisions based on bad information can put you at legal risk.
Timeliness
Background checks should be conducted promptly. In a competitive job market where there is a shortage of qualified talent, delays can cost you candidates. Using an employee online background check can accelerate your hiring process.
Legal Requirements
There are a wide variety of laws that you must comply with when conducting background screenings. Violations of credit reporting laws can result in fines of up to $1,000 per violation. Civil penalties for misuse of information about criminal backgrounds have led to judgments exceeding several hundred thousand dollars.
Failing to undergo the proper screening can also create legal liability. For example, Citigroup was fined $1.25 million for hiring people with criminal backgrounds without checking records first.
Federal, State, and Local Employment Laws Impacting Background Checks
You should seek guidance from your labor attorney in conjunction with your human resources leaders to ensure compliance with the complex federal, state, and local employment laws.
Federal Laws
- Equal Employment Opportunity Commission (EEOC): Prohibits employment discrminiation practices, including in the use of background checks.
- Fair Credit Reporting Act (FCRA): Provides regulations for employers on how they can use background reports, such as criminal background checks, in making employment decisions.
- Title VII of the Civil Rights Act: Forbids employment discrimination based on race, color, religion, sex, or national origin.
The Fair Chance Act prevents federal agencies and contractors from asking about criminal histories on job applications. While background checks can be used to uncover criminal histories, there are specific guidelines for use.
State Laws
37 states have so-called ban-the-box laws, which prohibit the collection of criminal histories on job applications and how criminal backgrounds are used in hiring. A sample of other state laws includes:
California
- California Consumer Privacy Act (CCPA): Gives California residents more control over the personal information that businesses collect about them, including information used in background checks.
- Investigative Consumer Reporting Agencies Act (ICRAA): Regulates the use of investigative consumer reports, including criminal background checks, by employers in California.
Colorado
- Colorado Chance to Compete Act: Prohibits Colorado employers from asking about or considering a job applicant's criminal history until after an initial employment application.
Florida
- Florida Fair Employment Laws (FEPL): Prohibits employment discrimination in Florida, which can impact the use of background checks.
Illinois
- Illinois Human Rights Act: Prohibits discrimination in employment, including discrimination related to the use of background checks.
- Employee Background Check Act: Regulates how employers can obtain and use criminal background checks.
Massachusetts
- Massachusetts Criminal Offender Record Information (CORI) Law: Limits the types of criminal records employers can access and consider.
Michigan
- Elliott-Larsen Civil Rights Act: Prohibits employment discrimination in Michigan, which can affect the consideration of background information.
New York
- New York State Human Rights Law: Prohibits discrimination of employees in New York, including in the use of background checks.
- Article 23-A: Limits the ability of New York employers to deny employment based on an applicant's criminal record.
Texas
- Texas Business and Commerce Code: Regulates the use of consumer reports, including criminal background checks, by employers in Texas.
Washington
- Washington Fair Credit Reporting Act: Regulates how employers can use consumer reports in employment decisions.
How to Choose an Employee Background Check Online Service
What is the most reliable background check site?
The best background check for employers will come from a service that meets your needs, so you will want to evaluate your choices. Here are some of the key considerations:
Services Offered
Look for a comprehensive range of background checks, including criminal history, employment verification, education verification, and more. A versatile service can cater to the different roles within your organization.
Compliance with Laws The best background check for employers will comply with all possible regulations. Look for services that are transparent about their compliance practices and have a proven track record of adhering to legal requirements.
Request Sample Reports
Ask for an employer background check sample to make sure it is clear and easy to read. Sample reports enable you to assess the quality and clarity of the information provided. They can help you evaluate the thoroughness of the checks and whether they meet your needs.
Turnaround Time You do not want to lose high-quality prospects because you cannot get your background investigation done promptly. Working with a company that enables employee background checks online can accelerate the process.
Reputation Research the reputation of the service by reading customer reviews and testimonials. A service with positive feedback from other employers is more likely to be reliable and effective.
Cost Quality trumps cost, but you do need to consider whether the service offers good value for money. When comparing, check prices and services to find a balance between affordability and quality.
Best Practices for an Employee Online Background Check
Besides ensuring you meet all applicable laws, there are several best practices you should put in place when you are conducting employee background checks.
Have Clear Policies
Establish clear and consistent policies regarding background checks to prevent discrimination and ensure that all candidates are treated fairly. You need to define which roles require which types of checks and ensure that these policies are applied uniformly across the organization.
A uniform approach following clear guidelines will help limit your liability and promote a fair process.
Privacy and Confidentiality
Your candidates privacy and confidentiality needs to be respected. Background checks involve handling sensitive information, and you need to ensure that data is stored securely and only accessible to those involved in the hiring process.
You should also be transparent with candidates about the checks being conducted and how their information will be used.
Addressing Findings
Not all findings in a background check will necessarily disqualify a candidate, so it is important to assess each situation individually. For example, a minor criminal offense from many years ago might not be relevant to the role in question.
Employers should also give candidates the opportunity to explain any negative findings. This practice, known as individualized assessment, may be legally required in some jurisdictions. In many locations, if you uncover information in a background check that has an adverse effect on a hiring decision, you are required to provide that information to the individual.
Training of Hiring Managers
Hiring managers should be trained on how to interpret the results of background checks and how to use this information in the hiring process—and when they should not. They should understand the importance of relevance in any findings to the role and be trained to look for potential bias.
Training helps prevent unfair discrimination and ensures that background checks are used properly. It is a good idea to document your training process in case of legal disputes, aligning training with your practices and policies.
Ethical Considerations
Ethics should be at the forefront of conducting background checks. This includes respecting the candidate’s privacy, ensuring that checks are relevant to the job, and avoiding discrimination.
Ethical considerations also extend to how you handle the findings. For instance, rejecting a candidate based solely on a past mistake without considering their rehabilitation or time since the incident can be seen as unethical—and illegal in some circumstances.
Regular Reviews
You should regularly review your hiring policies and background check data to ensure they align with your goals. You do not want to unfairly discriminate against any group, especially legally protected individuals. This review should include your labor attorney to provide you with an independent viewpoint.
Frequently Asked Questions—FAQs
Are background checks online legit?
Yes, online background check services are legitimate and widely used by employers. However, it’s important to choose a service that understands and complies with legal standards. Be wary of free or suspiciously cheap services, as they may not provide accurate or comprehensive information.
Are online background checks confidential?
Reputable background check services are designed to protect the confidentiality of the information they handle. You also need to keep information private and handle data securely to prevent unauthorized access.
Do I need permission to run a background check on a job applicant?
Yes. The Fair Credit Reporting Act and other laws related to privacy require employers to get written consent from the candidate before conducting a background check. Failure to do so can result in legal consequences.
How far back do background checks go?
The look-back period for background checks varies by state and type of check. Generally, criminal checks go back 7–10 years, but others—such as education or employment verification—can be comprehensive across an applicant’s entire history.
What is the most accurate background check website?
The most accurate service may vary depending on your needs and how much you are willing to pay. However, you can trust Command Credit for background investigations and employee background checks online at an affordable price.
Looking for the best background checks for employers? Contact Command Credit today to get started today.