Back to Blog

A Guide to the Background Check Process

PSI Team | Industry Expertise

From building up your staff to promoting current employees, the background check process is extremely useful when filling positions in your company. However, it can also be pretty complicated. With all the information, regulations, and necessary steps involved in the process, it’s easy to become lost in the details. Fortunately, you don’t have to manage your organization’s background checks alone. To help you implement a compliant and effective screening system, here’s our guide to the background check process.

FCRA Compliance

A lot of valuable and sensitive information goes into the screening process. As a result, there are several standards and regulations in place that ensure a fair procedure for every individual who consents to a background check. Employers must comply with the Fair Credit Reporting Act (FCRA), which stands to promote accuracy, fairness, and privacy in the background check process. The Federal Trade Commission (FTC) enforces the FCRA, and together they make sure employers follow a fair and equal process for every employee or job candidate they screen. In addition to these federal regulations, there are also plenty of state and local laws they might have to follow, as well as certain industry-specific standards. These regulations serve as a guide to the background check process, helping protect employee rights throughout the entire procedure.

Obtaining Employee Consent

Before the actual background check can begin, employees must consent to the process. Without written permission from the employee or candidate, employers can’t conduct a background check. During this initial step, employers must also inform the employee or candidate that the information contained in this background check might influence their final decision about the employment offer. If the employee doesn’t give this consent—and you’ve made a reasonable, legal request—you’re allowed to take them out of the running for that position. If an employee does consent to the background check, they’ll provide their personal identification information such as their name, date of birth, and social security number.

What Goes into the Report?

Once you or a hired third-party employment verification service obtain the employee’s consent and personal information, the actual background check process begins. The background consists of several different reports. This combination of reports may differ depending on the type of job you screen for—for example, a job involving finances might check credit history, while a chauffeur service will likely look at driving records. The following are a few of the reports that might show up in the screening:

Social Security Number Trace and Validation

By tracing the employee or candidate’s social security number, a background check service can validate much of the individual’s personal information. This information can include any names and aliases, month and year of birth, and address history. A candidate’s address history also tells background check companies which jurisdictions to search when checking criminal records.

Education and Employment Verification

One of the major reasons companies perform background checks is to ensure job candidates tell the truth on their applications. Employers want to ensure that their candidates’ credentials are legitimate and that they’re truly qualified for the job. This part of the report may also check any professional certifications a candidate might have, such as a medical or law license, to ensure that they’re valid and in good standing. The same goes for any university degrees listed on an application. A huge part of any background check is simply checking for inconsistencies. If a candidate lies on their resume, it’s usually a major red flag for employers.

Social Media Profiles

Social media searches, including a search of online profiles, may be requested as part of the screening process. With elements such as online privacy laws and locked accounts, it’s hard to know what exactly a background check can find in a potential employee’s social media history. However, much of what we post online is public, which means a background screening company can pull it up, and employers can view it. Rather than going to a third-party screening service, recruiters or managers often perform this part of the search on their own, which can increase risk, if the HR personnel conducting the search are not savvy to the laws associated with the use of social media in the screening process.

Criminal Record

When most people think of a background check, they immediately think of criminal records. There are different variations of criminal background checks. For example, a company might have to look at several jurisdictions, databases, and watch lists. Companies might perform a criminal background check at the county, state, or federal level, or search them all. However, because employers can’t take negative action based solely on an arrest record, these checks usually only provide information on past convictions. Like most parts of the background check process, the industry influences the results of the screening. Some fields treat certain crimes as a cause for the candidate’s automatic dismissal. This usually occurs when the crime is relevant to the specific job. For example, a taxi service may turn down an applicant whose criminal record includes a DUI conviction.

Credit History

While credit reports aren’t necessary for all background check processes, they often show up in jobs related to finances, transactions, and other money management positions. A credit check will show whether a potential employee has serious or unpaid debts. It also reveals whether or not someone has filed for bankruptcy. Similar to looking for inconsistencies in a job application, checking a candidate’s credit history is another way to learn more about their ability to manage finances. If someone has accrued a significant amount of debt or filed for multiple bankruptcies, they may not be financially responsible enough for the position.

Adverse Action

Once you receive the background report, you must decide whether or not the candidate is still eligible for this position. If you reject their application because of ANY information in their background report—known as an adverse action—you must follow the steps laid out by the FCRA and FTC. Before rejecting the application, you must provide the rejected employee or candidate with a notice that includes a copy of the background check as well as a copy of “A Summary of Your Rights Under the Fair Credit Reporting Act.” These documents serve as an opportunity for the candidate to review the report and look for mistakes or explain any negative information.

You must also give the candidate an adverse action notice. This includes the contact information for the background check company that provided the report, a statement explaining that said company didn’t make the employment decision and notice that the candidate can dispute inaccurate information on the report. This notice also reminds the applicant that they can request a free report from the company within 60 days of receiving the adverse action notice.

If you follow all the right steps and handle the information correctly, the background check process becomes a simpler, more effective part of your hiring procedure. PSI Background Screening is here to help make that happen for your business. By hiring a third-party background check company, you can ensure your screening process remains compliant and legal for every employee you bring into your company.

Background Check Process