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Everything You Need to Know About Background Checks and Pre-Employment Screening



11 Dec 2015

Background Checks and Pre-Employment Screening

When applying for a job in the past, a prospective new employer may have told you that they were going to run a background check as part of the process. Many businesses use background checks as a form of pre-employment screening to find out about an individual's criminal, financial, and employment history.

Background checks aren't just a part of the pre-employment screening process; they are also a part of the screening process if you're volunteering, purchasing a firearm, or signing a rental agreement. You can even run a self background check to make sure that your information is factual. This is a good precautionary step to take before starting a job search or looking for property to rent.

There are many different types of background checks which we cover in the guide below.


What Type of Information Is Available via Background Checks?

Background checks can include everything from criminal history to consumer reports and many other points of data. The type of information that is requested depends on the reason why the background check is conducted.

Common types of information requested during employment screening can include:

  • Criminal records
  • Sex offender records
  • Incarceration records
  • Legal working status
  • Social Security Number (SSN)
  • Driving records (if driving is a part of the job)
  • Education records
  • Prior employment records
  • Workers' compensation records
  • Credit reports and bankruptcy records
  • Court records
  • Drug test records
  • Personal references
  • Military records
  • State licensing records

Depending on the type of job that you are applying for, the pre-employment screening process can vary greatly. Individuals applying for jobs working with children, elderly, or disabled must pass a criminal background check.

Strict screening is performed on those applying for jobs that could pose a threat to security. These include law enforcement, airport and airline-related, and national security jobs. Also, people who work in shipping ports will have to pass a more extensive background check.

Types of Background Checks

Employment Background Checks

Nearly 72% of employers run background checks on new and existing employees. It is not legal to run a background check without an applicant's permission. Therefore, job applicants must consent to a background check as part of the application process. 

Background checks include a wide variety of information such as past and present addresses, criminal records, credentials, driving record, social security verification, employment history, creditworthiness, sex offender registry, or terrorist watchlists. Some services verify credentials and education. 

Employers may also order background checks on existing employees. While it is illegal, in some areas, to decline to hire someone based on a background check, employers can come up with alternative reasons. Because background information may be outdated or incorrect, the individual deserves the right to dispute the results.

Criminal Background Checks

A background check reveals any criminal activity up to a certain period. This type of check is especially important for jobs that require trustworthiness. There are levels of checks, depending on the position and how much the employer wants to pay. Typical background checks may include a search of the following:

  • National criminal databases
  • Sex offender registries
  • County criminal courts
  • Domestic and global watch lists
  • Federal and state criminal records

To ease the burden of getting a job with a criminal record, the government gives a tax break to employers willing to hire people with a criminal past.

Universal Background Checks

A Universal background check is required any time someone buys a firearm from a licensed dealer, importer, or manufacturer. The seller must run a search through the National Instant Background Check System (NICS) to determine the potential owner's eligibility. A person may not pass the check if he has a felony offense, certain criminal convictions and misdemeanors, is a fugitive, has an open arrest warrant, is an illegal alien, or has a disqualifying mental health issue.

The Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF) oversees universal background checks which are conducted by the FBI.

OIG Background Checks

Healthcare-related facilities run OIG background checks to ensure the safety of those in their care. Any individual that appears on a list of excluded individuals and entities (LEIE) will be unable to secure a position in a federally-funded healthcare program. The LEIE, or sanctions list, is compiled and maintained by the Office of Inspector General (OIG) at the U.S. Department of Health & Human Services. Employers may also conduct OIG checks on existing employees. Employers who fail to run an OIG check may face civil action in case of a safety or liability issue.

The OIG adds people and organizations to the LEIE if there is a conviction for any of the following criminal offenses:

  • Medicare or Medicaid fraud
  • Other offenses related to Medicare, Medicaid, State Children's Health
  • Insurance Program (SCHIP), or other state healthcare programs
  • Patient abuse or neglect
  • Felony convictions for other healthcare-related fraud, theft, or other financial misconduct
  • Felony convictions related to controlled substances

The following offenses may or may not add individuals or entities to the sanctions list:

  • Misdemeanor convictions related to healthcare fraud other than Medicare or state health programs; fraud in a non-state program funded by a federal, state, or local government agency
  • Misdemeanor convictions involving controlled substances
  • Suspension, revocation, or surrender of a license due to professional performance, competence, or financial integrity
  • Submission of false claims to a federal healthcare program
  • Participating in unlawful kickback arrangements
  • Defaulting on a health education loan or scholarship obligations
  • Controlling an excluded entity as an owner, officer, or managing employee

E-Verify Background Checks

E-verify is an optional background check for most employers. An employer performs the background check to ensure an individual's eligibility to work in the United States. Similar to the federally mandated I-9 form, E-verify checks a person's citizenship. Unlike the I-9, E-verify requires a valid Social Security number and current photo ID.

Fingerprint Background Checks

Also known as an Identity History Summary, a fingerprint background check uses a person's fingerprints to check for criminal history. It is mandatory for government-operated entities like airports, public schools, hospitals, law enforcement agencies, and fire departments. Some professional licensing agencies require a fingerprint background check, including jobs in real estate, insurance, medical care, pharmacies, finance, and casinos.

International Background Checks

Employers that intend to hire foreigners or those that have worked in foreign countries often run international background checks. This search is in addition to domestic searches and includes work history, criminal records, and education verification.

Credit Background Checks

A credit background check shows a person's credit-to-debt ratio as well as a history of managed credit and how the person pays bills. Employers, landlords and financial institutions may require a credit report to show responsibility and the ability to handle finances. Items on a credit report include:

  • Payment history
  • Civil judgments
  • Tax liens
  • Bankruptcies
  • Unpaid bills in collections
  • Recent credit inquiries

Personal Background Checks

Unlike a background check used by an employer or other entity, a personal background check is one that a person orders on his own behalf. Running a personal background check is an excellent way to check for outdated or inaccurate information so it can be corrected or removed.

Professional Licenses Background Checks

Also known as an education verification check, a professional license background check verifies that a person holds a valid license in the industry. Employers take this important step to ensure that the person is educated, knowledgeable, and qualified to prevent any civil or liability claims. Industries that require a professional license background check include:

  • Education, including professors, teachers, and administrators
  • Home contractors, including builders, plumbers, and electricians
  • The financial services industry, including financial planning, banking, accounting, real estate, and insurance

Why Would Someone Run a Background Check on Me?

The most common reason someone would run a background check on you is when you are applying for a job. The extra steps in the screening process that are part of the background check give employers greater peace of mind when hiring new employees. Background checks can prevent employers from hiring employees who are not qualified or could cause problems in the workplace. Under federal law, and in some states, background checks are required for a person to be eligible for certain jobs.

The Fair Credit Reporting Act (FCRA) clearly defines the type of information accessed in a background check during pre-employment screening. An employer that is using a third-party company to conduct a background check must disclose the search to the applicant.

A job applicant must consent to access to certain information (education, military and medical records).

Landlords may also request a background check to screen tenants. These background checks include credit, criminal, and employment history.

For the purchase of firearms and explosives, the federal government has created the National Instant Criminal Background Check System (NICS). Buyers must fill out a form that initiates the background check process. It is usually a quick process; however, the FBI may take up to three days to process a NICS request. Once three days have passed, the buyer can purchase the firearm or explosive - even if there are no results received. Background checks and the sale of guns is controversial as no background check is federally required if the transaction is through a private seller (which is frequently referred to as the "gun show loophole").

How Long Does It Take for a Background Check to Process?

Depending on the amount of information that is requested a background check can take longer to process. In most cases a pre-employment background check will take anywhere from three days to one week. Some background checks can be instantaneous, but these often provide results that are incorrect or information that is incomplete.

What Is the Quickest Way to Get a Background Check?

The quickest way to get a background check is not the best way. It is best to request employment background checks from a FCRA compliant employment screening company, such as GoodHire. There are many different companies that offer pre-employment background checks. Reputable background screening companies will take you through the process of requesting a background check step-by-step to make sure that you as an employer are following regulations.

How Accurate Is the Information in a Background Check?

Instantaneous or free background checks are not reliable. A reliable background check from an FCRA-compliant screening service can cost from $20-100 for one report depending on the amount of information requested. Some background check companies offer discounts for multiple background reports.

Can I Get a Free Background Check?

Free background checks usually provide incomplete or inaccurate information. The searches are not comprehensive and require you to look in several different places for pertinent information.

However, there is a free service that offers self background checks so that you can make sure that the information that shows up in your background report is correct.

Is There a Way to Do a Self Background Check?

The Department of Homeland Security and the U.S. Citizenship and Immigration Services (USCIS) offers Self Check through E-Verify, a free background check service. This tool helps you ensure that your background report will not prevent you from a potential job opportunity.

Under the FCRA, every person is also entitled to one free credit report every year. It is imperative to review your yearly credit report and credit score regularly. Changes in your credit report or score could mean that your identity has been stolen.

Where Does the Information in a Background Check Come From?

Public records offer some of the information. They include arrest records and convictions, the sex offender registry, court records, and bankruptcies.

A criminal rap sheet is not a public record and requires permission to access. Consumer reports, medical records, military service, and most educational records are all confidential.

Background checks can also provide information taken via social media. Employers will often check a candidate's social media as a first step in the screening process. It's important to note that employers investigating a candidate's social media accounts do not fall under the FCRA. Be careful what you put online and avoid uploading information that could hurt your chances with a future employer.

What to Do When a Background Check Has Incorrect Information?

Luckily, the FCRA protects us from incorrect information. Employers who choose not to hire because of something on someone's background report must first tell the potential employee why and provide them with the report. The job applicant then has the opportunity to dispute the information included in the background check.

If there is an issue in the consumer reports, you must file a complaint with the consumer reporting agency that has the incorrect information. The consumer reporting agency will investigate and correct any inaccuracies.

How Far Back Can a Background Check Go?

The FCRA states that an employer should not request arrest records that are over seven years old from the date of the pre-employment screening. Vice versa, consumer reporting agencies should not report this information.

Background reports also cannot include expunged criminal records.

Can a Company Not Hire a Person Because of a Background Check?

Yes, but the FRCA closely regulates this. For example, bankruptcies, workers’ compensation, and injuries cannot be held against you when applying for a job. An employer also has to tell you that they are not hiring you because of something they found in your background check. The employer must provide you with the report, the reason, and allow you to dispute it if the information is incorrect or should not have been included.

Some employers will simply say that it wasn't due to the background report, but because there were more talented candidates, which exempts them from sharing the background report with you and allows them to bypass the regulations set forth in the FCRA.

Is There Anything I Should Do Before a Pre-Employment Background Check?

Run a background check on yourself! You can use a government tool, like Self Check, or use a paid background check service. GoodHire offers a self background report option that will allow you to add context to to past records and find and fix problems or mistakes in your report.

Additional steps you can take include:

    • Ask for a credit report to make sure there are no inaccuracies and that your credit is in a good state.
    • Request to see court records (if you've ever been involved in a lawsuit) and driving records (if the job includes driving) to make sure that they are accurate and don't include information that is over seven years old.
    • Snoop on yourself via Google. Run a search on your name and make sure that nothing shows up that could hurt your chance of receiving a job offer.
    • Let former colleagues and neighbors know that they may be contacted for a personal reference.
    • Know your rights as protected under the FCRA.

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