The Who, What, When, Why and How of Background Checks

What is a background check?
Background checks are conducted on both businesses and individuals. Among other things, business background checks can reveal the existence of DBA (“doing business as”) filings, lawsuits, UCC filings, liens, and bankruptcies. Similarly, pre-employment background checks are investigations into the backgrounds of job applicants intended to help employers assess the suitability and eligibility of candidates for specific positions.

Why conduct background checks?
Background checks can help businesses make more informed decisions about prospective business partners or employees. It’s wise to conduct a business background check before agreeing to a business transaction or entering into a partnership, for instance.
Employers conduct pre-employment background checks for various reasons. Certain jobs require a security clearance, so background checks can be government-mandated. Some employers conduct background checks simply to verify information provided by job applicants via resumes and applications.
Today, with workplace violence and corporate scandals on the rise, background checks are considered a prudent and necessary hiring practice. And since a company can be held liable for the actions of a new employee, especially if the employer failed to perform a reasonable background check, background checks can help employers avoid lawsuits, as well as hiring mistakes.
Who conducts background checks?
Over 96% of HR professionals report that their companies do background checks on new hires.*  Some employers conduct background checks in-house, but many more employ the services of a professional background checking company. A background check agency should be adept at finding complete, current and accurate information on job candidates, and should have the expertise necessary to help employers comply with all applicable laws.

*The Society for Human Resource Management Workplace Violence Survey

Do I need permission to perform a background check?
Before initiating background checks of job applicants through a background checking firm, you should review the Fair Credit Reporting Act (FCRA) and ensure that you and your background check company will be in compliance with the FCRA. Among other things, the FCRA requires that before a background check can be initiated, the job applicant must receive proper notification that a background check will be conducted, and must authorize the background check.

What information about the applicant is required in order to do a background check?
The company selected to conduct the background check must be provided with personal information about the applicant, including his or her full name and other names used; date of birth; Social Security number; place(s) of residence; and if verification services are requested, schools attended; past employers; licenses or credentials; etc. 

What’s covered in a background check?
Background checks can vary widely in scope and depth, however, most begin with an investigation of the Social Security number presented by the applicant and involve a criminal history investigation in counties of current or past residence. Some background checks also include a search of federal court records, and/or state or federal civil court records. Other commonly-requested background check services include verifications of education, employment, licenses or credentials. Some employers also instruct their background check agency to obtain copies of the applicant’s credit report or driver’s record.

Is there such a thing as a nationwide background check?
There is no national repository for criminal records, so no such thing as a nationwide criminal background check. Instead, a criminal background check must be conducted on a county-by-county basis. Some businesses have compiled databases of criminal records collected from different sources, and some background checks involve searches of such databases to complement searches of county records.

How long does it take to complete a background check?
Most background check companies strive to complete background checks within 2-3 days of initiation, however complications can arise, delaying delivery of final background check reports.

What if the results of the background check are problematic?
Employers must weigh findings from a background check, taking into consideration the nature and timing of any negative findings and their relevance to the job in question.

What are the rights of the person undergoing the background check?
Under the FCRA, a job applicant must first be properly notified that a background check will be conducted, and (s)he must authorize the background check. Also, the FCRA stipulates that certain information cannot be included in background check reports.
If an employer intends to deny an applicant employment based on information contained in a background check report, the employer must provide the applicant with a pre-adverse action notice, a copy of the background check report, and an explanation of rights under the Fair Credit Reporting Act.
If a company denies an applicant employment based on information contained in a background check report, it must provide an adverse action notice that includes the name and contact information of the company that conducted the background check, and notice that the applicant can dispute information contained in the background check report if (s)he deems it inaccurate or incomplete.
What should I do, as a job applicant, to prepare for a background check?
The best way to prepare for a background check is to be aware of the information that an employer or background check company might find. Review your credit report and dispute any erroneous information. Check your driving record, and ask previous employers for copies of your personnel files.  Finally, ensure that resume and job applications are accurate and truthful.