Background Check

What is a background check?

A background check (also called a background screening) is when an employer or third-party service scrutinizes a job candidate’s background. The specific areas of inquiry are based on the background check policy of the prospective employer. They vary based on the job role, industry regulations and applicable laws.

When the employer has advanced a job candidate through initial screening and interview(s), they have evaluated the candidate based on information provided by the candidate themself (on their application and/or resume) and their performance during the interview and other interactions.

Background screenings, along with reference checks, allow the hiring team to gather information regarding a candidate from people or institutions other than the applicant.

During the reference check, the employer or third party background check service may contact the candidate’s former employers, managers, and educational institutions. The check may include employment history, education (including the validity of claimed degrees, licenses and certifications), criminal records, credit history, motor vehicle history and drivers license records.

Employers conduct background checks to verify that an applicant:

  • Is qualified for the position
  • Was truthful on his/her application, resume and during the interview
  • Isn’t concealing serious wrongdoing including theft, fraud, harassment, violence, or negligence
  • Does the employer have to obtain the candidate’s consent to perform a background check?

Employers must provide the applicant with a formal written disclosure and obtain the applicant’s consent before conducting the check. The disclosure and consent form must be a separate document and can’t be included in the application. The employer must disclose that the information may be used to influence the hiring decision.

If the employer is using a third-party service, after the employer obtains consent from the applicant, they must inform the background check company that they notified the candidate and obtained their consent. They employer must also verify that they complied with the FCRA anti-discrimination provisions, discussed below.

What laws regulate background checks?

The Fair Credit Reporting Act (FCRA) applies when employers hire a third-party service agency to conduct consumer credit reports and other investigative reports. The Federal Trade Commission (FTC) enforces the FCRA.

When a third party service performs background checks, they may obtain information termed as “investigative reporting.” An investigative consumer report may contain subjective judgment regarding the job candidate.

How does the FTC define a “report”?

It’s important to know that a report doesn’t need to be in written form. A report could refer to information obtained in a short phone call which is communicated orally to the hiring manager in another short phone call.

An FCRA consumer report is “Any written, oral or other communication of any information by a consumer-reporting agency bearing on a consumer’s credit worthiness, credit standing, credit capacity, character, general reputation, personal characteristics or mode of living. In the employment context, this definition may, for example, include credit reports, criminal history reports, driving records and other background check reports created by a third party, such as drug tests.” Society for Human Resource Management

If you are asking a company to provide an “investigative report” – a report based on personal interviews concerning a person’s character, general reputation, personal characteristics, and lifestyle – you must also tell the applicant or employee of his or her right to a description of the nature and scope of the investigation. EEOC

Background screenings:

  • Protect employees from violence or harassment
  • Protect customers from theft or harassment
  • Protect the business from fraud, theft, a tarnished reputation or legal liability

Background checks are an important part of an employer’s due diligence when evaluating job applicants. Thorough background checks protect the business, the employees, the customers and the public at large.

See also

Additional resources

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