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Buyers Guide to Background Checks


1. Introduction 2. What you can find with pre-employment searches 3. Background limitations and check regulations 4. Choosing a background check service provider

Employees are your most valuable-and usually your most expensive business asset. According to one estimate, the cost of hiring the wrong employee is can be up to twice that persons annual salary! How does a business make sure that an employee is the right match?

Interviews, references, and referrals are priceless when it comes to hiring, but in some circumstances, theyre not enough. Businesses in specific industries, such as medicine, accounting, law, engineering, and other professional services might find a more extensive background check necessary to verify accreditations, professional licenses, and other qualifications with. Criminal background checks are mandatory for some jobs- for example, those in the trucking industry, or positions where the employee will have contact with children, the elderly, or the disabled persons. In these instances, businesses can perform an employment screening on potential new hires.

Most public records, such as bankruptcies, marriage records, age, and other information can be obtained for free, though they can be time consuming to track down. Credit checks, criminal histories, driving records, and other information can be tougher to come by, especially for the novice investigator. If you need specific information on a prospective employee, using an employment background screening service is often the easiest way to find it. Most employment screening companies have different service packages that provide different levels of information- you can limit your search by state, by county, or request verification of specific claims made by a prospective employee.

What you can find with pre-employment searches


Most pre-employment background check screenings are done to verify information that the prospective employee has already provided. A background search is usually the easiest and fastest way to determine whether or not an applicant has the requisite experience, education, and qualifications to join your business as an employee. For example, many employers use background checks to verify college degree information, professional certifications, eligibility to work in the U.S., and other information.

Employee background checks can cover some or all of the following areas:

Social Security number verification Criminal background checks Civil judgment reports Driving records Credit reports Education and degree verification Employment verification Workers compensation and unemployment claim history

A Social Security number and address search is the most basic method of verifying a persons identity. Though much of the above information is technically public record, it is often easier to hire an employment screening agency to find- criminal background checks in several different states or counties can be time consuming if you dont have experience performing them.

You will likely be required to notify the prospective employee if you plan on obtaining some of the above information. For example, the Federal Fair Credit Reporting Act requires any entity requesting a credit report on behalf of a party to notify the person whose report is requested. For practical purposes, employment background checks are also easier if you request certain information from the prospective employee, such as a social security number.

Background Limitations and Check Regulations


Background check and other pre-employment screenings are regulated by the Federal Fair Credit Reporting Act, which defines such consumer reports as any written, oral, or other communication of any information by a consumer reporting agency bearing on a consumers credit worthiness, credit standing, credit capacity, character, general reputation, personal characteristics, or mode of living.

In addition to the Federal law, there are state regulations that govern prospective employment screening and employment background checks. Both the third-party background check service and your business are required to follow all applicable regulations. Among other requirements, the FRCA mandates that you give a reason for requesting the report, affirm that the prospective employee has consented to the background check, and certify that you will only use the information for employment purposes.

Obtaining certain information requires the express consent of the subject of the background check beyond just notification. For example, the subject must affirmatively consent to the release of medical information. Some information cannot be obtained at all- for example, a consumer reporting agency may also only provide medical information if it is relevant to the job.

You also have specific responsibilities under the FCRA and state laws if you choose not to hire someone based on the information contained in the report. In most cases, you are required to give the employee a pre-adverse action disclosure form, along with a copy of the report, before you officially make your decision. Once you take the adverse action, (deciding not to hire a person) you will need to identify the source of the report (the background check agency) and provide a notice of the right to dispute the information it contains. There are specific procedures you must follow, whether your decision was based on information contained in a criminal background check or a credit report.

Youll also need to ensure that any reference information obtained does not violate state or federal employment laws. For example, you may not inquire about certain information from past employers. Its especially important to choose an employment screening firm that understands the applicable lawsif they dont comply, your business may be found responsible. Make sure you choose a company with a good reputation, and ask for references before you make a decision.

Choosing a background check service provider

Accuracy is a paramount concern when choosing a background check service. Companies with reputations for accurate reports can be found through referral, or through a pre-screened service that works with employment screening companies and other business service providers. Chances are, speed is also a factor- a good employment screening company should be able to turn around accurate information within a week or less, though you can allow more time for in-depth searches that also check references and professional qualifications. In addition to accuracy and speed, here are a few other factors to consider when choosing a background check service: Services Offered: Employment screening firms vary in the types of background checks they offer. Comprehensive services can provide a personal and criminal background check, verify professional and educational qualifications, and check employee references. If youre looking for specific information (for example, driving records) you probably wont need such an inclusive search. Choose a company that offers the specific services you need. Location and Service Area: Some services only offer state or local background checks, so consider the type of information you need. If you need nationwide or international information, make sure to consult a company that offers these services. User Interface: How do you send and receive information? Can you receive reports online? Is it easy to choose the report you need, if youre purchasing different reporting features for different employees? Ask the vendor rep about the procedure for using the service. Report Format: Will you be performing an employment background check on several potential employees at once? If so, youll probably receive data in a report format. Make sure that the report is easy to understand- you can ask the vendor rep how reports are traditionally formatted and even ask to see a sample. Customer Service/Support: Will you be assigned a dedicated representative, or will you need to call a helpdesk for support? Is online support available?