How to Run an Employee Background Check

Do you want to know a little bit more about a candidate than just work history? That’s where employee background checks come in. 

A background check looks into an employee’s criminal history, driving records, and if they are on a terror watch list or sex offender registry.  Doing a background check usually involves working with a background screening service and may include a credit check.

How to run a background check: step by step

Step 1: Create a consistent background check policy 

Before you run a background check, create a policy that explicitly outlines your background check process. You must treat all candidates fairly and be transparent about your requirements to avoid legal trouble. For example, you cannot conduct a credit check on particular candidates but not others.   

A background check policy should include three things:

1. What type of background checks are conducted and who they apply to
   
2. How the results are used in the decision-making process
   
3. When the background checks are conducted 
   

Step 2: Get legal advice to ensure your policy is compliant

Background checks uncover sensitive information, and in some states, employers aren’t legally allowed to retrieve specific information. Not to mention you have to abide by the Fair Credit Reporting Act (FCRA), Equal Employment Opportunity Commission (EEOC), and various state and local laws that make creating a compliant policy pretty complex. 

Here are four violations to be cautious of:

1. Disregarding consent forms: The FCRA requires employers to receive written consent from employees to run a background check. The form must be clear and concise and provided as an independent document. 
   
2. Non-compliance with adverse action: When information from a background check sparks a decision to reject an application or terminate an employee, the FCRA requires employers to follow a three-step process. First, the employer must issue a pre-adverse action notice, a copy of the background report, and a Summary of Rights to the individual. Then the employer must give the candidate five business days to respond before sending the adverse action notice. 
   
3. Violation of Ban-the-Box laws: Ban-the-Box laws vary by location but typically require that employers do not conduct background checks until after the first interview or after an offer for employment is on the table.
   
4. Violation of Title VII regulations: The EEOC prohibits employers from discriminating based on race, sex, color, religion, or national origin. If your policy results in unfair treatment of a minority group, you will be facing legal trouble. 
   

Talk to a lawyer and have them review your policy to ensure it does more good for your business than harm. 

Step 3: Choose a background check service that is FCRA compliant

There are many governing forces of background checks, and the FCRA is crystal clear on what is allowed regarding credit information. But as we mentioned, the FCRA isn’t the only guideline you have to follow. 

For example, some states allow you to use criminal and credit checks on all employees, but you can only conduct checks on specific employee types in others. 

Check out this list of highly recommended background check services.

Step 4: Understand what to expect

A basic background check includes:

• Criminal record history
  
• Social Security validation
  
• Address history check
  
• U.S. terror watch list check
  
• Sex offender registry check 
  

There are different types of background checks you can run to meet the needs of your industry and the positions you have, such as drug screening, credit checks, and education verification. If you require more information about a candidate than the basic background check provides, consider reinforcing it with additional screening. 

Step 5: Communicate with your candidate

All candidates have rights under the FCRA. The rights include that you must notify them of your intent to conduct a background check and receive their permission. If the results spark a decision not to hire the candidate, you must allow them to review the background check report and correct mistakes. They can then file a dispute with the background screening company to resolve misinformation.