What is Employee Background Check?

By Danni White - Published on September 4, 2020
Employee Background Check Guide

Many recruiters and employers check on job candidates before hiring them. But have you ever wondered why and what’s the criteria to conduct a simple employee background check?

What is an employee background check?

Reviewing a job candidate’s criminal, personal, social, financial, and employment records are known as an employee background check.

Most of the companies use third-party recruiters to hire candidates. If they do so, they are restricted by FCRA rules to check someone’s background.

Importance of employee background checks

A background check is important as every new person hired or added to the workforce presents a business risk, despite offering an opportunity for productivity. Most of the employers conduct background checks, pre-employment to keep the business operations smooth, productive and profitable.

How do you conduct an employee background check?

Here are some steps you can follow to conduct a proper and legal employee background check:

  • Adhere to a consistent policy

    This document helps every recruiter to know what should happen next in the background check process. Haphazard background checks on some employees could also create legal issues for the company.

  • Get legal advice

    Sometimes, background checks consist of sensitive and private information of a candidate. Unearthing that could lead to unwanted legal issues. That is why it is better to seek advice from a lawyer.

  • Inquire with the candidates as well

    It is possible that the information one can get from a background check can be incorrect or half true. Give the candidates a chance to explain themselves upon finding anything fishy. You might have a skilled candidate on the list that could have been excluded due to human error.

  • Only use FCRA compliant background check services

    FCRA, also known as the Fair Credit Reporting Act, has laid out rules that you can follow as a protocol before checking someone’s background. All the rules regard the credit information that recruiters fetch from the credit agencies.

  • Do not take the background check process lightly

    Critical and sensitive information shows up when you check someone’s background. Not handling critical information well could lead to legal issues. Therefore, the information should be obtained and handled well.

    Do not ask for character verification while fetching other information

    Do not waste your time building an investigate consumer report. Do not ask questions or start taking others’ opinions on a person’s attitude, personality, behavior, and social life.

    If you are ought to build an investigate consumer report, you must notify the candidate, as per the federal law. It is best to seek legal advice from your lawyer.

(Also Read: How Technology is Changing the Background Screening Process)

What to include in an employee background check?

Here are some of the things that an employer check for:

  • Driving records

    As long as you have the candidate’s permission, you can run a driving check to see if the applicant has a safe driving history or not. The results derived from a driving check record includes:

    • DUI’s
    • Traffic fines, convictions and law violations
    • Driving record points
    • Traffic accidents
    • Status of current driver’s license
    • Vehicle registration

    Does the applicant have a vehicle? If yes, it is better to run a vehicle registration check using the car’s registration number and the applicant’s social security number.

  • Credit records

    A credit check digs into the applicant’s credit history. A credit history report is prepared by the 3 largest credit agencies: Equifax, TransUnion, and Experian. These reports can be derived for free, once in a year.

    However, in some states, it is now illegal to hire someone based on his credit history report. It can only be used as proof of financial stability.

  • Criminal records

    Checking criminal records is the most important aspect of an employee background check. It is carried out when an organization needs to know about any prior criminal activity of the applicant. It is only carried out to see if the candidate poses a threat to the office’s environment or the staff.

  • Social security number

    Tracing the social security number proves that the information that the candidate has provided is truthful.

  • Education records

    An education record check is necessary to see if the candidate is graduated or not. It is primarily used to deny or confirm the candidate’s application for the post.

  • Court records

    Public records, also known as court records, are documents that are mostly confidential. However, some states allow these court records to be checked by employers.

  • Worker’s compensation

    Worker’s compensation is a form of insurance that an employee gets in the course of employment. It can be in the form of medical benefits.

  • Bankruptcy

    It is a legal process that involves seeking relief from the court when one cannot repay the debts. A typical background check includes a bankruptcy check to ensure that the applicant is financially stable.

  • Character references

    Character references are often included in investigate consumer reports. In this check, the recruiter inquires about the person’s attitude, social behavior, and personality.

    • Medical records
    • Medical records contain your medical history and the care you might have received across time from a medical facility.
    • Property ownership

    Most of the employers do not check the assets but where necessary, a property ownership record check puts forward all the properties under the name of the applicant.

  • Military records

    Did your employee use to serve the military? Military personnel records contain information about training, duty assignments, enlistments, appointments, qualifications and performance.

  • State licensing records

    You can also go for a state licensing record check for the applicant. However, the state requires permission from the applicant before passing on any documents.

  • Drug screening records

    Industries like aviation require alcohol and driving test records. These types of test records conclude if the person is suitable for the job or not.

  •  Past employers

    One of the most important background checks includes confirming the candidate’s prior workplace and experience. This allows recruiters to look back at the applicant’s insights and work history.

  • Personal references

    This background check includes open-ended questioning to understand how the employee would work and fit in the environment.

  • Incarceration records

    Incarceration records are usually included in the criminal records. If your applicant was a law offender in the past, you would easily know through this check.

  • Sex offender registry check

    Performing this check helps to reduce the chances of hiring potential sexual offenders at your workplace.

What can you not include in the background check?

  • Bankruptcy reports of 10 years before
  • Civil judgments and suits of 7 years before
  • Paid taxes liens of 7 years before
  • Collection accounts of 7 years before
  • Other types of negative information (except criminal convictions) of 7 years before

Who is responsible for conducting background checks?

Many third-party organizations specialize in employee screening. However, they check using broad categories. If you want a character reference in detail, you might want to hire a private investigator. Big corporations work with third-party agencies to run background checks on their candidates.


Finding a trustworthy and honest employee is not an easy task. However, performing a background check before confirming a job post could bring positivity to your company.

Danni White | Danni White is the CEO of DW Creative Consulting Agency, a digital marketing firm specializing in elevating the visibility of small-to-midsize businesses and nonprofits. She is the author of 17 books and hosts the #Hashtags and Habits Podcast, which merges digital marketing, entrepreneurship, and personal growth.

Danni White | Danni White is the CEO of DW Creative Consulting Agency, a digital marketing firm specializing in elevating the visibility of small-to-midsize busi...


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