How to do background checks? A complete guide

Background checks can be a crucial component of the hiring process. These verifications serve as one way to verify the reliability and honesty of potential employees. By vetting candidates using a background check, organizations can uphold their commitment to a safe work environment, protect company assets, and manage their reputation. 

Not only do background checks verify your new hire meets qualifications for the job, but it might even protect you and your workers against criminal behavior.

Whether you're an HR professional, a talent acquisition partner, or a small business owner, this post will provide insights and information about how to conduct thorough and compliant background checks.

What is a background check?

A background check is part of the pre-employment process that involves employers verifying a job candidate's background. These checks review employment history, education, licenses, and criminal records. As part of the job application process, some organizations may refer to these as background screenings or employment screenings.

What are the benefits of running background checks?

Background checks are time-consuming, but they are essential. They allow organizations to confirm they’re hiring people with the necessary qualifications. In addition, this pre-employment step allows employers to identify red flags before hiring someone. Pre-employment background checks also make it possible to foster a safe work environment and prevent problems later on. 

Running background checks offers several key benefits for businesses:

• Verify education history

• Confirm dates of employment at previous employers
• Validate professional licenses, certifications, and credentials 
• Improve job satisfaction
• Create a safe work environment
• Save time
• Build a strong and reliable team
• Avoid fines and legal issues

Note that for some industries, such as education, financial, government, and healthcare, conducting an employee background check is a legal requirement.

How to do an employment background check 

Knowing how to do a background check enables companies to conduct the process effectively and legally. 

As part of this process, you’ll want to understand pertinent legislation and the importance of obtaining consent. You also want to choose the right vendor and ensure you’re handling personal information securely.

Understand the legislation

Before conducting background checks, employers must familiarize themselves with relevant legislation, including Fair Credit Reporting Act (FCRA) in the United States or the General Data Protection Regulation (GDPR) in Europe. Understanding these laws ensures compliance with legal requirements regarding the types of checks allowed, consent requirements, and how to appropriately collect and store the applicant's personal information securely.

Obtain consent from the applicant

Make sure to obtain consent from the applicant before initiating a background check. This request for consent should outline the types of checks to be conducted and how the information will be used. Obtaining consent demonstrates respect for the applicant's privacy rights and ensures compliance with legal regulations. As an employer, you must tell candidates that you could use the information from the background check to make hiring decisions. It’s required to provide this information in writing. 

If you decide not to hire someone because of information in the background check report, such as criminal history, take care to comply with the Fair Credit Reporting Act, ban-the-box policies, state laws, and mandates of the Equal Employment Opportunity Commission (EEOC). It’s also important to consult with counsel for legal advice regarding these decisions and consider creating a background check policy that outlines relevant processes and procedures.

Choose a background check company

Selecting a reputable background check company is crucial for obtaining accurate and reliable information. Factors to consider include the company's experience, compliance with legal standards, turnaround times, cost-effectiveness, and data security measures. Choosing the right provider helps ensure thorough screening, minimizes risks associated with hiring decisions, and streamlines your hiring process. Rippling’s partnership with Checkr, for instance, allows companies to conduct background checks with customizable qualification steps that assess candidates and verify credentials. 

Protect sensitive personal information

When collecting personal information for background checks, employers must handle it with care and ensure confidentiality and data protection. Only collect information that is relevant to the job and necessary for conducting the checks authorized by the applicant. Employers should also protect this information against unauthorized access, disclosure, or misuse, adhering to data protection regulations throughout the process.

Types of background checks

It's important to understand the various types of background checks and their contents so that you can anticipate what information each will provide. This knowledge helps you make informed hiring decisions that align with the specific requirements of your industry and the roles you are filling. Understanding these checks empowers teams to manage hiring processes effectively and responsibly.

Social security and identity verification

Social security and identity verifications ensure that the candidate's identity matches the information they provided and reduces the risks associated with identity theft. It also ensures that candidates meet legal requirements for employment eligibility.

Employment verification

This confirms past employment details and validates a candidate’s work history. Surprisingly, 36% of people admit to lying on their resume.  

Education verification

This ensures the authenticity of academic credentials, which is crucial for roles requiring specific educational qualifications. Details may include degrees earned, dates of attendance, and academic achievements. 

Criminal background checks

These include national, state, federal, and county checks. Depending on the type of check and local laws, criminal convictions, including felonies (e.g., armed robbery, child endangerment, arson, and murder) and sometimes minor misdemeanors (e.g., simple assault, reckless driving, shoplifting) will be part of the check. Pending court cases may also appear on a criminal record check.

Credit report 

These reports detail a candidate’s credit history, highlighting payment history, bankruptcies, and other financial behaviors (e.g., mortgages, loans, foreclosures, bankruptcies, collection accounts) relevant to positions with financial oversight. Credit checks for employment do not include an applicant’s credit score.

Driving record checks

These confirm license validity and driving history, essential for roles in which driving a motor vehicle is required as part of job duties.

Hiring employees internationally? 

The rules surrounding how to do a background check differ from country to country. Companies may find the different background check processes more complex than they thought. You need to understand what’s allowed under local labor laws, as well as what you’re allowed to check, how to do so, and how you’re obligated to handle and store sensitive data. 

As an example, background checks are mandatory in the UK but not in Brazil. Meanwhile in Argentina, employees are required to submit a medical examination (and may be denied employment if they refuse). In Australia, a Working with Children Check is mandatory for employees in industries where workers regularly interact with minors. Assuming one size fits all when conducting background checks internationally could get you in trouble.

Employment background checks: Considerations for employers 

Today, conducting thorough employment background checks is essential for employers to mitigate risks and ensure quality hires. From legal compliance to choosing the right screening methods, employers must consider multiple factors to navigate this part of the hiring process effectively.

Turnaround times

Employers should look for quick turnaround times on background checks to ensure they align with hiring timelines. Ask background check companies this important question: How long does a background check take? Delays in obtaining results can impact recruitment processes and may prolong vacancies, impacting productivity and business operations.

Confidentiality and data protection

It's crucial for employers to prioritize confidentiality and data protection when conducting background checks. Handling sensitive information securely not only maintains trust with candidates; it also ensures compliance with data privacy regulations such as GDPR or CCPA, safeguarding against potential legal repercussions.

Accuracy and up-to-date information

Employers rely on accurate and up-to-date information from background checks to make informed hiring decisions. Incorrect data can lead to misunderstandings and may result in the oversight of important details that could affect the suitability of a candidate for the role. Therefore, choosing reputable background check providers known for their thoroughness and reliability is essential.

Cost management

Employers should also consider cost management when selecting background check services. Balancing the need for thoroughness and compliance with budget constraints is crucial. Comparing costs among different providers and understanding the pricing structure (e.g., per check or subscription-based) can help employers make cost-effective decisions without compromising on quality or compliance.

Optimize hiring and recruitment workflows with Rippling

Rippling helps you manage your hiring, onboarding, and employee processes all in one place. Rippling’s integration with Checkr, a leader in background checks, uses artificial intelligence and machine learning to make hiring more inclusive and more efficient. 

Checkr allows organizations to run background checks directly within Rippling, saving time by eliminating manual background check tasks and duplicative systems. With seamless integration, it’s possible to order and view background checks all without leaving Rippling.

Checkr gives you:

• Built-in compliance with every hire
• Faster background checks: 84% of checks are ready in less than 15 minutes
• Background check reports with easy-to-understand language and customizable filtering
• A mobile-first, user-friendly candidate experience
• Automated follow-ups to guide candidates
• Multilingual candidate support

In the Checkr integration overview tab within Rippling, it’s simple to select a candidate and kick off a background check. From there, the candidate receives an invitation from Checkr to complete the required authorizations and disclosures, and Checkr completes the background check. Using the Rippling candidate profile page, it’s easy to follow along with status updates. 

Rippling simplifies everything about running your workforce. With a single system, you can cut the time you spend running background checks and get your new hires on board faster. 

Disclaimer: Rippling and its affiliates do not provide tax, accounting, or legal advice. This material has been prepared for informational purposes only, and is not intended to provide or be relied on for tax, accounting, or legal advice. You should consult your own tax, accounting, and legal advisors before engaging in any related activities or transactions.