Ten Things Employers Should Know about Pre-employment Background Checks—A Crucial Part of the Hiring Process


Successful companies know that they are only as good as its people and that requires identifying and hiring the right people.  However, hiring someone that is unqualified, dishonest, unfit, or even dangerous can create a legal and financial nightmare.

Employers can utilize a variety of tools, solutions, and techniques to attract, recruit and hire outstanding employees.  However, after going through the hiring process, there is one more step most employer take – obtaining a background check to make sure there is no reason NOT to hire that person.  Even though a background check does not tell an employer who to hire, it is a critical  due diligence tool to help employers avoid hiring a lawsuit or disaster waiting to happen.  A background check provides employers facts and information about the applicant so hiring decisions are not just based on instinct or what an applicant tells you.  In addition, a background checks encourages honesty, provides a deterrence to applicants who fake their qualifications and promotes due diligence in hiring.

Here are ten key things employers should know about a background check:

  1. A check is done on a finalist either as part of a job offer or in some states, after a job offer. Depending upon what an employer requests, and barring unforeseen circumstances, such as a past employer who will not call back to confirm employment or county courts that are slow, a background report should take approximately three to four days.  So-called “Instant” reports should rise a “Red Flag” since they are based on inherently unreliable database information.
  2. Under a federal law called the Fair Credit Reporting Act (FCRA), the applicant must consent to the check and be given a stand alone disclosure form about the process. Failure to comply with  FCRA requirements has led to numerous and expensive class action law suits. There are also a number of states with their  own laws regulating background checks.
  3. A background check is performed by a background screening company, known as a Consumer Reporting Agency (CRA) under federal law.
  4. A background firm generally performs two types of inquiries First  a screening firm will verify information supplied by the applicant, such as past education, employment or professional licenses. Secondly a screening firm will obtain public records, such as criminal or driving records. Subject to various laws, a screening firm may obtain an employment credit report if relevant to a position, or conduct a social media check.  Keep in mind a private screening firm is not performing an FBI type check since a CRA can only access public records. In addition, although there are large criminal record databases assembled by private firms, there is no such thing as a “national criminal” search” for private employers. These databases can be helpful but are subject to missed or incorrect records, and any potential results need to be verified generally at the courthouse to confirm accuracy and identity.
  5. The background check is usually initiated in one of two ways. If an employer uses an Applicant Tacking System (ATS), it may be integrated with a screening firm so that an electronic notice is automatically sent to a finalist with the required legal forms and request for information needed from the applicant. In the alternative, an employer can generate an electronic message to an applicant that will start the process.  Both methods utilize electronic signatures.
  6. If a background screening report comes back with any information that causes an employer to not hire a person, even if there were other reasons, an applicant is entitled to a process called “Adverse Action.” The applicant has a right to a copy of the background report, a statement of their rights (prepared by a federal agency) and given the name of the screening firm to contact to question anything in the report. If the decision not to hire is made final, the applicant is entitled to a second and final letter.
  7. It is critical to understand that the use of criminal records in hiring is highly regulated.  The Equal Employment Opportunity Commission (EEOC) has made it clear that the automatic use of criminal records to not hire a former offender can be a form of discrimination.  An employer must take into account factors such as the nature and gravity of the crime, the nature of the job and age of the crime in order to determine if the criminal record presents an undue risk.  If an employer decides the past offense disqualifies someone for a job, the EEOC recommends giving an applicant one last chance through a process called an “Individualized Assessment,” where an applicant has the opportunity to explain more about the past offense or why the employer should still hire him or her.
  8. In addition, there are numerous state and local “Ban the Box” laws, prohibiting an employer from asking an applicant too early in the process if he or she has a criminal record. The goal is to give former offenders a fair chance to demonstrate they can perform the job before being eliminated on the basis of a past offence. In some states, these laws have morphed in Fair Chance hiring laws, that regulate the use of criminal records in hiring beyond the job application.
  9. Background screening is heavily regulated by legislation, litigation and regulation. It  is important to  select a screening firm that understands these complexities. Although a screening firm cannot provide legal advice, a screening firm should be able to operate using generally accepted industry practices to meet legal requirements.
  10. There are numerous screening firms in the United States. One way to select a service partner is to make sure the firm is accredited under a program run by the Professional Background Screeners Association (ThePBSA.org), the professional organization for the screening industry.  It is important to understand that as with any professional service, competency and not price should be the primary qualification. If an employer requires international background check, it is important to ensure the screening firm has the special expertise needed to handle all of the issue that arise in doing checks around the world.

Lester S. Rosen is an attorney at law  and Founder of Employment Screening Resources (ESR), a service offering of Clear Star and a national accredited screening firm. He is a consultant, writer, expert witness  and frequent presenter nationwide on pre-employment screening. He is the author of “The Safe Hiring Manual,” (3d Edition 2017/826 pages), the first comprehensive book on background screening.  He served as the chairperson of the steering committee that founded the Professional Background Screeners Association (PBSA),  served as its first co-chair and received the PBSA Lifetime Achievement Award in 2019.  He can be reached at lsr@esrcheck.com


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