- Know the Law
- Calculating Costs
- Purchasing Tips
- Comparison Checklist
- Glossary of Terms
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Overview of Background Checks
Background checks have changed a lot in just the past couple years, thanks to the increasing computerization of vital records, as well as to challenges associated with a difficult economy. Let's take a look at some of these trends.
- Dishonesty in Applications and Resumes
The recession of 2008 resulted in many more unemployed people taking longer and longer to secure jobs. As the challenge to find work increased, so did the temptation to stretch the truth on job applications and resumes. Over the past five years, employers in all industries have reported a marked increase in the number of cases where job applicants were less than truthful.
- Increased Relocation Across State Lines
People don't stay in one place as much as they used to. Between traveling for work, school, and employment, people are moving across state lines more than ever before. Background checks become more challenging to perform as more applicants change locations.
- More International Employees
The labor force isn't just fluid within the United States. Many people are working both domestically and abroad. As such, collecting information from outside the U.S. can be difficult and time-consuming.
- Stricter Privacy Laws
In the United States, Europe, and elsewhere, new laws have been enacted restricting the amount of data that can be maintained on someone; as well as legislating who has access to that data and what it can be used for. Three states prohibit using credit-report information for making hiring decisions. Similarly, the federal government prohibits credit-reporting agencies from going back more than seven years to obtain a credit history on an individual.
- Checking Social Networking Sites
It has become a common practice for employers to review Facebook pages and other social networking sites to prescreen candidates for employment. However, some states are curbing this practice. In Maryland, Illinois, and California, for example, it's illegal to ask job candidates for passwords to their online accounts.
- Integrating Background Checks with Other HR Systems
Many background check providers use the service as one element of a larger human resources (HR) system. For example, many trucking companies purchase not only an initial background screening on drivers, but also one that checks every month for traffic violations-whether these infractions occurred on the job or off. Some HR systems automatically flag data in a report that is beyond a threshold set by the company, thereby eliminating the need to scrutinize screening reports on candidates who fail to meet minimum qualifications.
- E-Verification of Employment Eligibility
Perhaps the simplest type of background check is to determine whether an applicant is qualified for employment in a particular state. Many states have set up electronic verification (e-verify) systems so that employers can quickly check the accuracy of a Social Security number, as well as whether or not the candidate can be legally employed.
- Better Data, Lower Prices
No trend is more obvious in background checks than that of higher-quality information at a lower cost. The availability of computerized records has made background screening services ultra-competitive. More of the process is automated than ever before, and prices for basic checks have plummeted. The security of the entire process is better than ever, and turnaround times have dropped from a few days to a few minutes for basic checks. For these reasons, it costs less than ever-and takes less time-for a business to protect itself from fraud and misrepresentation. The question is no longer: "Do I really need a background check," but "Why wouldn't I use this simple, low-cost method to avoid problems down the road?"
The following services may be included in a background check-from simply verification of an address, to conducting detailed interviews with relatives and former co-workers-as well as information on how long it typically takes to get results.
- People Search (instant)
Using readily available records to verify home addresses, phone numbers, email addresses, and other basic information.
- Credit Report (instant)
There are three major credit-reporting agencies in the United States: Experian, Equifax, and TransUnion. But they aren't the only ones. There are several other credit bureaus and thousands of firms that provide credit reports, which typically provide information on bank accounts, credit cards, loans, and address histories; as well as other names people have used in order to secure credit.
- Criminal Records (1 day)
Searches of a federal database of criminal convictions have become fairly fast and routine.
- Employment Records (1-3 days)
Verifying the employer, employer's address, duration of employment, positions held, and sometimes additional data such as pay rate.
- Motor-Vehicle Records (2 days)
Verifying records kept by motor-vehicle bureaus, including drivers'-license and vehicle-ownership records and moving violations.
- Drug Screening (pre-employment, random; 1-3 days)
Screening for controlled or prohibited substances is often done as part of a pre-employment screening process, and then periodically performed on employees on a random basis. State laws vary on when drug screening can be used and what it can cover.
- Civil Court Records (3-5 days)
A check on whether the applicant is the subject of a lawsuit or has instigated lawsuits against others in the past.
- State Court Records (3 days)
Includes a variety of records kept by state courts.
- County Court Records (3 days)
Many records are kept at the county level in the U.S., and they don't always percolate up into state or federal records checks. These include such things as marriage and divorce records, adoption records, and violations of county laws or regulations.
- Offender Lists (3 days)
Registries of those convicted of various crimes. Many states maintain sex-offender and drunk-driver registries, and lists detailing other kinds of offenders.
- Legal Proceedings (3-5 days)
This is a check to see if the candidate is involved in any current legal proceedings that are making their way through court and have not yet been ruled upon. Cases in progress don't show up in databases of county, state, and federal court decisions.
- School Records (1-3 days)
Screening usually involves verifying the dates of attendance and graduation, and degrees earned (if any). Screening may include grades, test scores, attendance records, disciplinary actions, awards, or other information related to an applicant's scholastic history.
- Professional Training Completion (1-3 days)
Verification that the candidate is entitled to use the professional training certificates and designations he or she claims. Also can be used to verify that the candidate has completed the required continuing education to maintain a particular professional designation.
- Reference Checks (3-5 days)
The process of contacting the references provided by the applicant and verifying the information on the application. Reference checks often involve soliciting assessments on the applicant's performance.
- Media Searches (2 days)
In-depth searches of periodicals, radio transcripts, television transcripts, photos, and other media in an attempt to identify every instance of a candidate getting media coverage.
- Conducting Interviews (time varies)
Beyond reference verification, screeners may have a need to conduct personal interviews with individuals known to the applicant. These interviews could be as quick as an email or as formal as a legal deposition.
- Personality Assessments (time varies)
There are a number of personality tests that employers use to see if an applicant is a good fit for an organization. Tests such as Myers-Briggs claim to be able to determine whether an employee is a risk-taker or cautious, an introvert or extrovert, among other traits. These tests can be rather elaborate-including so-called 360-degree assessments that ask what co-workers, customers, suppliers, and others who interact with an organization think about the applicant.
- Psychological Assessments (time varies)
Psychological assessments of a candidate's fitness for a position can range from a simple IQ test to an evaluation by a trained psychiatrist.
- Aptitude Assessments (time varies)
Tests to determine if a candidate meets various specific criteria for employment or advancement. These tests usually relate specifically to the job description, such as an ability to lift a maximum amount of weight for postal-carrier candidates.
Know the Law
The rules governing background checks are not only established by each country's national government, but also by subdivisions, such as states, counties, and cities. For example, some jurisdictions prohibit basing decisions on records of arrest rather than records of convictions. Many large organizations also have their own internal rules for what may or may not be included in screenings.
Most background check providers are thoroughly familiar with the screening laws in the territories in which they operate. It's when you try to do your own screenings in-house that you need to be very careful about complying with the laws in your jurisdiction.
The U.S. federal law governing background screening in the United States is the Fair Credit Reporting Act (FCRA). The act comprises many rules for credit-reporting bureaus, such as how far they're allowed to go back in order to check on and report on an applicant's credit history. But even if you're using a credit-reporting agency to do your screening, you must follow a few important rules when initiating credit checks:
- Employers have to obtain the written consent of applicants and existing employees before viewing their credit reports.
- Employers must provide applicants and employees a summary of their rights under the FCRA before taking an adverse action against them based on a credit report.
- Applicants have the right to obtain a copy of their credit reports and dispute erroneous or incomplete information with the credit-reporting agency after they've been rejected based on negative information in a report.
Background Checks Step-By-Step
- Select a background check provider and open an account.
- Choose the package of screening services you desire.
- Verify that you have consent from the candidate.
- Input data about the candidate (or have the applicant input the data).
- Authorize the background check firm to conduct the screening.
- Analyze the results of the screening.
- Notify the candidate of your decision.
- Provide documentation required by law.
- Basic Screening (1 day) $20-$55
- Social Security number verification
- Social Security address verification
- National criminal database search
- State sex-offender registry search
- Advanced Screening (1-3 days) $55-$150
- Federal court records search
- State court records search
- County court records search
- State Department of Motor Vehicles search
- Drug testing ($30-$100 per test)
- Custom Screening Services (time and pricing varies)
- FBI fingerprint check (2-5 weeks)
- Presenting results to candidates
- Continual monitoring ($10/month/employee)
- Auditing current compliance
- Use a Vendor. Yes, you can do background checks yourself, but do you have the staff to research state laws and make sure you're in continual compliance? Given the brisk competition and low prices for background screening services these days, you're better off putting a third party between you and the ultimate decision. If there's a lawsuit, it's the background screening firm-not you- that bears the greatest liability.
- No Hit, No Fee. Some background check services are so confident that they'll unearth something amiss that the report is free if it doesn't turn up anything negative. They call it "no hit, no fee." Be sure to ask if your vendor offers such a guarantee.
- Check Social Networks. Several states have ruled that employers cannot require applicants to reveal their social networking passwords-but you're free to see what you can dig up without one. You might be amazed by what you'll find. A 2012 survey of 300 employers showed that over 90% reviewed an applicant's social networking activities before extending a job offer, and an astonishing 69% said that they've rejected a candidate as a result of that search. Ask your vendor for a price that includes social networks in the screening package.
Some of the key factors you should take into consideration when comparing vendors are listed below.
Glossary of Terms
- Adverse Action Letters: The Fair Credit Reporting Act (FCRA) requires that candidates receive advance notice, called a "pre-adverse action letter," if a credit, housing, or hiring decision might be based on information from a background check. The FCRA also requires an "adverse action letter" when a candidate has been declined based on a background screening. An adverse action letter must identify the company that provided the background report, as well as a way to contact the provider.
- Conditional Job Offer: A job offer extended on the condition that an employee passes a background check. This allows companies to hire before receiving screening results.
- Equal Employment Opportunity Commission (EEOC). A division of the United States government executive branch, the EEOC sets rules and regulations for what you're allowed to investigate when doing background screenings on employees, candidates for employment, or contractors.
- E-Verify: A Web-based program operated by the Social Security Administration to assist employers in determining whether an employee is eligible to work in the U.S. and whether the employee's Social Security number is valid.
- Fair Credit Reporting Act (FCRA). A U.S. federal law governing credit-reporting practices, including what you're not allowed to screen for when conducting background checks related to lending, housing, or other contracts. Enforced by the Federal Trade Commission.
- Human Resource Management System (HRMS). Also called a human resource information system (HRIS), this is a broad collection of software and practices for managing the process of hiring and evaluating employees and potential candidates.
- National Association of Professional Background Screeners (NAPBS). A trade group that establishes standards for background screening practices and offers training programs and certification programs.
- No Hit, No Fee: A practice among some screening services to provide a background report without charge if it doesn't unearth anything amiss about the candidate.
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