Employee Background Checks: What’s Legal and What Do They Check

June 16, 2020by accurateinvest
Woman job applicant having an interview with two female corporate experts at office of big company. Two young beautiful women, conducting a job interview reading the female candidate s CV.

Your top candidate just nailed her job interview. Her resume is impressive, education and employment history are exceptional, and personality and skills are the perfect fit for your company culture. She almost seems too good to be true — and she just might be.

Some applicants lie, embellish facts or hide their true histories to land the job. That’s why background checks are important for businesses looking to hire new employees.

According to a 2017 survey, 96% of employers conduct at least one type of background check. Failing to do so can be detrimental to your company. You want to confirm your potential workers are exactly who they say they are, and that any claims they’ve made about their education, work history and clean criminal record are verifiable.

There are many services that run background checks on potential employees, but what actually happens during the background check process? What information can you legally obtain, and what are a candidate’s rights if you find details that impact your employment decision?

Here’s what your business needs to know about running an employee background check.

What is included in a background check?

There are many types of reports you can select to verify your potential employees. Typically, employers start with employment background checks, which are relatively extensive.

Employment background checks include a person’s work history, education, credit history, driving record, criminal record, medical history, use of social media and drug screening.

If you find any red flags in your initial check, you can then decide whether you want to order more specific reports. The most common types of background checks, in addition to employment background checks, include:

  • Criminal background checks, which typically check for major criminal activity, like violent or sexual crimes, fraud, embezzlement or felony convictions.
  • Office of the Inspector General (OIG) background checks, which look for healthcare-related crime history in candidates applying for jobs in federally-funded healthcare programs.
  • E-Verify background checks, which verify the employee’s identity and employment eligibility.
  • Fingerprint background checks, which are mandatory for applicants at government-run institutions and check a person’s criminal history from authorized criminal justice agencies.
  • International background checks, which provide access to international criminal records, education and employment verification for employees who lived, worked or studied in another country.
  • Credit background checks, which are typically used for applicants at financial positions and review the worker’s credit report, including payment history, civil judgments, tax liens, bankruptcies, unpaid bills in collections and recent credit inquiries.
  • Professional licenses background checks, which simply verify that the applicant possesses a valid license.

The type of position for which you are hiring impacts the type of background checks you can and should run. For instance, government jobs or jobs that involve working with children may prompt deeper checks into a candidate’s criminal and financial background.

The type of position for which you are hiring impacts the type of background checks you can and should run.

What are the laws surrounding employment background checks?

Before running any background check on your potential employees, you’ll want to make sure you understand local employment laws to prevent any legal issues.

Employers are allowed to contact a candidate’s previous employers to confirm any information on their resume or application, including positions held, job responsibilities, and start and end dates. However, every state has its own laws and restrictions about what employers can and can’t ask about a candidate (such as their salary history), so you should familiarize yourself with any specific regulations within your jurisdiction.

Additionally, when screening someone for employment, the service you use must adhere to The Fair Credit Reporting Act (FCRA). Essentially, this means you must clearly disclose the fact that you are conducting a background check for employment purposes, comply with any candidate’s request to review the results of the investigation, and agree that you will not use any uncovered information to violate Equal Employment Opportunity laws.

What sources can I use for an employment background check?

While you can, and should, certainly conduct your own research on a job candidate through search engines and social media websites, this information alone is not a substitute for a proper background check.

A full-service background check company can be found through the National Association of Professional Background Screeners (NAPBS) website, to ensure a company is compliant with FCRA and BBB-accredited.

Beware of any free or do-it-yourself search services, as most do not fit the FCRA guidelines and are therefore likely illegal.


U.S. Chamber of Commerce, 2020

Accurate Investigation Services works hard to make its website accessible to all, including those with disabilities. If you are having difficulty accessing this website, please click here for PC and Mac click here

Copyright © 2020 Accurate Investigation Services | All Rights Reserved. | Privacy Policy