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December 4, 2019 BestCompaniesAZ

Pre-Employment Background Checks: What Employers Should Know

Originally published July 2014. Updated December 2019.

Part three of an HR: Focus on Hiring series of articles.

Performing background checks on potential new hires should already be part of your hiring process. According to a survey by HR.com and the National Association of Professional Background Screeners, 96% of employers run at least one type of preemployment background check prior to hiring. The advantages of attaining this information far outweigh the cost that is paid to obtain it. Though the pros of these checks are plentiful, a few of the most significant reasons are:

  • Trustworthiness: Applicants who are dishonest about something on their resume may carryover that lack of integrity to the workplace.
  • Credentials: Applicants that overemphasize or blatantly lie about their education may not have the proper credentials, training or certifications to perform the duties of the job.
  • Liability: Applicants with criminal records containing varying degrees of violence can be a liability in certain professions, especially those dealing with children. If another employee or individual gets hurt, the company could be held liable.
  • Money: Applicants who will be handling cash should have good credit records (or good explanations for tarnished ones). Applicants in dire straits for money will be more likely to take from the corporate cookie jar. As well, if an applicant cannot manage their own finances, how well will they be able to control those of the company?
  • Substance Abuse: Applicants who are substance abusers are obviously a risk. Policies should be in place regarding the adherence to prescreening substance abuse procedures.

Legal Compliance When Performing Preemployment Background Checks

Whether you are currently performing background checks or in need of implementing such methods, be sure you are fully informed on your rights within the law. Each state has different laws with respect to searches for personal information. Look into the regulations in your state or consult a lawyer before starting this process. Many states have placed limitations on credit checking and the EEOC has taken an interest in determining any discrimination related to these pre-employment searches. In certain states as well, you are not allowed to ask up front for an applicant’s criminal record. If these “Ban the Box” laws apply in your state, be sure to take that request for information off of your initial employment application. Properly analyze each position and determine the types of checks necessary for potential candidates.

For more information on the legal implications of background checks, see a recent article posted on SHRM here.

Steps to a Preemployment Background Check

1. Obtain a Disclosure Form from the Applicant

Once you have determined your process, first thing’s first, you must obtain a disclosure form from the applicant, allowing you to perform the desired searches. If you deny an applicant based on the information found in their background check, you must let them know this, allowing them to obtain a copy of the check you received and refute any information that may be wrongly included.

2. Find a Background Search Company

Second, find a background search company. The website Finder Mind lists the background search companies in their top 5, providing Better Business Bureau ratings and a short summary of each company. These search companies are People Finders, US Search, Intelius, Info Cubic and Identity PI. Verity Screening Solutions is also a great tool for small to medium-size organizations as they have fairly quick turnarounds and low fees.

If your organization is not in a financial situation to be able to afford preemployment background checks, do a little research on your own. You will be surprised to find what information you can find out about a candidate by an online search or by calling a few references or previous employers. Many states even have criminal records published online, though a word of caution accompanies that suggestion. When doing an online search, make sure you are looking at information for the right person. No matter how unique the name, you would be surprised how many times someone’s bad record is mistaken for another person of the same name.

The bottom line is that background checks are worthwhile to perform. The time, effort and money spent could potentially save your organization from hiring an employee that is untrustworthy or a possible liability.

Side bar: when background check companies are calling your corporation for information on previous employees, keep it short and sweet. Dates and titles need be the only thing verified. Trashing an ex-employee could land you on the wrong end of a lawsuit.

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