How To Run A Background Check For Potential Employees

Author Mike Marschke Date Feb 11 2019

How to run a background check? Running a background check on employees is an effective way to make sure that you are hiring a suitable individual to work for your business. You should confirm different aspects of a candidate’s background to verify the information provided during the application process. When thinking about how to run a background check, you must consider issues, like relevant laws, cost and whether you will use background check companies.

A background check that is not fit for purpose is almost as bad as having no background check. This is especially the case when dealing with criminal background checks. The companies you choose to run your background checks will have a great impact on the quality of the information you receive about your potential hire.

When you are thinking about how you should run a background check, the following tips will help you to hire the right candidate and keep you compliant with relevant laws.  

1. Create a background check policy

The background check process should be consistent throughout your business. You should document the workflow that provides details of the steps to be taken when requesting background checks. If you’re wondering how to run a background check, it must be done in a uniform manner to help protect your business against accusations of discrimination. You must demonstrate that you have applied the same standard of background checking to all applicants, irrespective of their gender, race, religion or other protected characteristic.

2. Seek legal advice before you run a background check

Before starting to run background checks, you should seek the advice of a labor lawyer. The labor lawyer you choose should be familiar with how to run a background check and the  regulations for your state. Laws around background checks and hiring practices vary according to different states. For example, some states have what is known as “ban the box” law, which places restrictions on when you can ask certain candidates about their criminal history.

3. Communicate with candidates about findings after you run a background check

It is possible that information in background checks may be inaccurate. To be seen to be acting fairly, you should give the candidate the chance to provide an explanation for detrimental information that has been reported in the background check report. If the candidate claims that the information is incorrect, they should provide evidence to support this claim.

4. Choose background check vendors that comply with the Fair Credit Reporting Act (FCRA)

The (FCRA) provides guidelines in relation to how to run a background check relating to credit information. You need to familiarize yourself with the candidate’s rights as stated by the FCRA. These rights include:

  • Telling the candidate when information in their file has been used in a disadvantageous way against them.
  • Allowing the candidate to be aware of what is in their file.
  • Giving the candidate the opportunity to address inaccurate or incomplete information.

5. Familiarize yourself with investigative consumer reports and reference checks as you prepare to run a background check

You carry out a reference check when you make contact with an individual, like a previous employer, to confirm details of the candidate’s employment. Investigative consumer reports are details generally provided by background check companies. If you receive information that has led to you turning down the candidate via a reference check, you are not obliged to tell the candidate. However, if the information was received through an investigative consumer report, you need to give the candidate a copy of the relevant report.

6. Pay attention to each background check

If you hire a high number of employees, it can be easy to view background checks as routine. However, this approach can be detrimental to your business, if a bad employee slips through the cracks. Your background check policy should include details about who is responsible for reviewing and verifying the results of background checks.

7. Select the right background check company

It can be challenging to choose the best background check company as there are a wide variety of available options. A suitable background check vendor should have the following features:

  • Access to all the information your company needs to hire the right people.
  • Compliance with the FCRA.
  • An online portal to request background checks and to review findings.
  • Accreditation from the National Association of Professional Background Screeners.
  • Electronic consent for applicants to give their authorization to the background check.
  • Clear and accurate reports.

Another important feature you should expect when selecting a background check company is whether it integrates with other aspects of your hiring process. For example, Checkr is a background check company that integrates seamlessly with Fountain.

A disjointed hiring process can cause headaches for you and your candidates.  

Get a free personalized demo of Fountain if you are considering choosing a hiring platform that integrates with your other hiring tools.

This demo will show you how your entire hiring process can be made easier and smoother when integrated with all the tools you need for a complete recruitment management experience.

The background check company you choose needs to provide modern features, such as automated tools and a mobile-friendly experience.

[Click here for the Modern Hiring Guide e-book to equip you to make the most of advances in technology to improve your hiring process.]

8. Get the candidate’s permission before you run a background check

You must ask for the candidate’s permission to do a background check if you plan to use a background check company or another outside agency.

9. Collect the right information when you conduct a background check

You will need the candidate to provide the following information before you can run a background check:

  • Full name.
  • Social Security number.
  • Date of birth.
  • Signed permission for school transcripts, credit reports and military records.

How to run a background check? Choose the right type

There are a range of different types of background checks that you can carry out. The types of checks you choose will be determined by the position the candidate has applied for. You should work with your Human Resources representative or a labor lawyer to confirm which checks are permitted by law.

The following are different types of background checks:

  • Criminal background checks

Embezzlement convictions or charges are just one kind of criminal issue you will want to check when hiring. Other criminal activities that may affect your hiring decisions include:

  • Violence
  • Sexual assault
  • Fraud

A criminal background check is made up of the following searches:

  • Domestic and international terrorist watch lists.
  • Sex offender registers.
  • Federal and state criminal records.
  • County criminal courts.

It is not a given that someone should be turned down for a job because they have been convicted of a criminal offence. The United States government offers incentives for employers to hire convicted felons through a tax credit program. This is called the Work Opportunity Tax Credit Program. According to the Internal Revenue Service, this tax incentive program not only applies to hiring ex-felons, but qualified veterans, those qualifying for public assistance and several other targeted individuals.

  • Employment background checks

Employment background checks may include the following searches:

  • Education.
  • Past work history.
  • Criminal record.
  • Driving record.
  • Credit history.
  • Use of social media.
  • Drug screening.

Employment background checks generally go back seven years. However, this differs according to different states and some states may permit searches to go back to 10 years.

  • E-Verify checks

This thorough check verifies a candidate’s identity and eligibility to work in the U.S.  In the E-Verify process, the information the employee provides on the I-9 form is compared with online information.

The federal government mandates the use of the E-Verify process for its contractors. Additionally, around 20 states require this process for particular private and public employers. However, the E-Verify process is optional for most employers.

  • Professional licensing verification

When job candidates need a license to perform their job, for example, physical therapists and doctors, it is important to verify that they have the necessary licensing. This type of background check will protect your business from any complaints of negligent hiring practices.

The process for professional licensing checks involve contacting the applicable industry organizations or related state boards to verify that a candidate holds the license he or she claims to hold and that it has not lapsed or expired. Other questions asked as part of this check, includes making sure that there are no violations or restrictions associated with that license.

  • Credit Check

Some companies may want to run a credit check on prospective employees. This generally takes the form of a credit report, and provides information about a prospective employee’s “credit-to-debt” ratio. This information provides an insight into an individual’s financial management skills and reliability when paying bills. If the job candidate will be handling money for your company, you may want to run a credit report on that person.

  • International checks

If you are based in the U.S. and are considering employing someone who has recently lived, studied or worked in a foreign country, you may want to conduct an international background check as well as a standard employment background check to obtain information that is unavailable in the U.S. The international background check covers the same types of information that a check in the U.S. would cover. These checks include:

  • Criminal background.
  • Employment history verification.
  • Education qualifications.

The standard information most countries need to run an international background check include:

This type of background check is related exclusively to the health care industry, and is required by the Social Security Act. The U.S. Department of Health and Human Services keeps a list of individuals who have been sanctioned for health care related crimes. This list is called the List of Excluded Individuals and Entities (LEIE).

The offenses that can result in adding someone to this list include:

  • Medicare or Medicaid fraud.
  • Other offenses connected to federal programs such as Medicaid, Medicare and the Children’s Health Insurance Program (CHIP).
  • Felony convictions involving controlled substances.
  • Patient neglect or abuse.
  • Other felony convictions for health care related theft, fraud or other financial impropriety.

Employers in the health care field often run this type of background check before hiring an employee. This check should also be run after the employee has been hired to make sure that the recent hire has not been added to the list after the original check.

A health care employer who neglects this type of background check and hires someone on this list could be subject to civil penalties.

The main considerations when you run a background check

Hiring the best employees is important for the protection of your business as well as your employees and clients.

With so many regulations relating to the way background checks are handled, you should make sure that your business complies with all requirements. You must take the ultimate responsibility for understanding and complying with background checking laws and regulations.

If you want to make sure that you are not violating any local, state or federal laws, you may want to work with a background check company who has a proven track record for complying with the necessary regulations.

Background check companies generally offer a range of services that you can choose from, depending on your company’s individual needs. Some background check companies can provide industry-specific background checks.

When thinking about whether you will run a background check yourself or use a background check company, you should visit the U.S. Equal Employment Opportunity Commission (EEOC) website for information about the fundamentals and to ensure that you are acting fairly and lawfully.

Every business has its own unique screening needs for prospective employees. With the variety of background checks available, you can pick and choose the types of checks that would be the most suitable for your company, within the confines of the law.

Background checks help you to choose the right candidates. Demonstrate to candidates that you are the right employer by providing them with a convenient and easy application process. Features like, individual job workflows and simple interview scheduling has ensured that Fountain is the hiring tool of choice for companies like, Deliveroo and PICKUP.

Request a demo to find out how Fountain can make you the employer of choice for the right candidates.


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About the Author

Director, Strategic Programs

Mike Marschke

Mike Marschke is Fountain's Director of Product who has a passion for innovation and optimizing talent acquisition strategies, enhancing candidate experiences, and driving organizational growth.