What Do Employers Look for in a Background Check?

Conducting background checks is a common practice among businesses to find in-depth information about an applicant. Employers usually perform checks before making a formal employment offer to a candidate.

A typical background check may include identity, past addresses, criminal records, credit status, etc. However, what employers look for in a background check depends on the job type. For example, employers may exclude credit inquiries when hiring for non-financially sensitive positions.

In this guide, you will learn about what employers look for in a background check and some important points for each information category. Let’s start.

Understanding Background Checks

A background check is a procedure a person or business employs to verify a person's identity. It's also a chance to validate the accuracy of someone's criminal records, education and employment history, and other past activities.

Employers usually do background checks in their hiring process, usually after a conditional job offer. 

In general, a background check may reveal information on the following:

• Applicant's identity;
• Employment history;
• Credit history;
• Criminal record;
• Driving record, and 
• Education history, among others.

The Equal Employment Opportunity Commission (EEOC) provides the restrictions and regulations for background checks. One of the prohibitions is discrimination based on race, disability, or citizenship.

No laws prohibit background checks in other countries, such as the Philippines. However, the government has a Data Privacy Act that specifies the limits on pre-employment background checks.

Germany also allows background checks, but employers must adhere to strict implementation of the data protection law. Applicants should know the background check policies of the company and be entitled to revoke consent at any time.

There are a lot of different reasons why employers conduct background checks. Understanding these reasons can help you prepare for future job applications. 

6 Things Employers Are Looking for in a Background Check

Background checks, for employers, aim to find information not found in one's resumé. It could also be something not said during the interview process.

Employers must follow the Fair Credit Reporting Act's (FCRA) rules when performing checks. It includes precise procedures for getting a person's consent before digging into their background.

The content of a background check also varies depending on the roles and responsibilities it's intended for. Here are six things employers look for in background checks:

Identity Verification

Employers can confirm your identity by looking up your name, aliases, and past addresses. This investigation ensures legal compliance, as employers may receive a fine for hiring unauthorized people to work in the US.

An employer must also practice due diligence in verifying identity to ensure the applicant is not stealing someone's identity and license.

Education Verification

Potential employers might check your academic credentials for professions requiring: 

• Licenses
• Certifications
• Advanced degrees

They may also contact your educational institution to confirm your credentials. Employers can request you to submit an official transcript of your academic record.

Employers will verify the validity of your resumé's education section using online resources provided by most universities.

Criminal Record

Statistics show that 70 to 100 million Americans have a criminal record. The EEOC prohibits discrimination against a person with a criminal record, though it may depend on the conviction. 

Employers can reject an applicant depending on the seriousness of a prior offense and the job's nature.

For example, an employer might not want to hire a candidate with a history of identity theft or embezzlement. The candidate might use their position to conduct crimes that involve financial accounts and sensitive personal information.

Employers who didn't exercise due diligence while filling a position might risk being sued for negligent hiring.

Financial History

An employer in finance-related industries might look up your credit history to assess your knowledge and responsibility with money.

Some employers believe that by assessing a person's financial management, they can gauge how they're responsible in their professional lives.

It's also important to remember that there are places where credit assessments for employment purposes are prohibited. These states enacted laws banning credit checks for employment:

• California
• Colorado
• Connecticut
• Delaware
• Hawaii
• Illinois
• Maryland
• Nevada
• Oregon
• Vermont
• Washington 

Cities like Chicago and New York also enacted the same law. Employers and applicants should check their local and state laws before conducting or agreeing to a financial history check.

Social Media

Social media activity can affect an employer's choice to reject a job applicant. 

While looking for work, it's advisable to do the following: 

• Keep your social media clean
• Set your accounts to private 
• Avoid posting anything you wouldn't want potential employers to see

Some employers terminate hired employees even due to offensive language, hate speech, and other harmful content.

Driving Records

Employers may request information about your driving history from your state's Department of Motor Vehicles (DMV) after you have signed a release form.

An employer will verify your driver's license and driving records to ensure you don't have driving-related charges. 

State laws govern DMV. Different reports may be recorded depending on where you live or work.

Employers use different ways to screen candidates, such as referrals and recommendations. However, conducting background checks gives them a thorough understanding of one's identity.

Find out how companies can conduct background checks in the next section.

Different Ways Companies Conduct Background Checks

Background checks must comply with the existing state regulations and industry standards to ensure that individual rights are protected for concerned parties.

At the federal level, the Fair Credit Reporting Act rules over the approved processes of conducting background checks. State and local laws may exist, but they cannot overrule or weaken the provisions of the FCRA.

Generally, lawful and compliant background checks adhere to the following steps:

1. Disclosure - Employers should disclose pre-employment screening to applicants as a requirement of an employment offer.
2. Consent - The candidate must give written permission and receive notification from the agency performing the check. This notification should include a copy of the candidate’s rights under the FCRA.
3. Investigation - This step involves collecting and compiling reliable information.
4. Review - The employer will receive a report for review. The report should show either of the following:

• Clear - a sign that there's nothing wrong found, and
• Consider - indicates that the checkers found a concerning record.

In case of an unfavorable decision, employers should send written pre-adverse notice to the applicant. The candidate also has the right to receive a copy of the report with enough time to point out inaccuracies or misunderstandings.

Employers can decide how to conduct background checks as long as they comply with the regulations. Here are the two different ways companies conduct background checks:

In-house Background Checks

Although it's common to outsource the process, some employers may have a human resource staff assigned to examine an applicant's background.

Employers may also conduct screenings where they independently review your social media, academic background, and employment history. It differs from a background check due to its informality and exclusion of criminal records.

In this setup, a prospective employer can inform you after it conducts a screening or an in-house background check.

Third-party Background Checks

There are third-party background check services employers can reach out to research potential employees. 

An employer must send a written notice to the applicants to ask for consent if they choose to hire a third-party service. The request for information should be explicit on what it is looking for and its purpose.

Hiring a third-party service for employee background checks saves a lot of time and resources. However, employers should rely on accredited credit reporting agencies to ensure accurate reports and accountability in case of inaccuracies.

The Importance of Conducting a Background Check

Background checks can assist the hiring manager in making an informed choice when choosing the best applicant. This way, the risk is reduced in hiring someone who later proves unsuitable and unqualified.

In some situations, careless hiring results in litigation filings that harm business irreparably.

To sum up, carefully performed background checks are important because of these points:

• Hiring decisions are made simpler and more convenient for employees with a complete background check.
• Background checks on job applicants eliminate candidates who are a potential threat to the workplace. This prevents the chance of future workplace violence.
• Through your in-house compliance experts and third-party background check provider, your business can create a solution to satisfy the following: 

1. Your industry standards; and
2. State and federal regulatory requirements.

• A legal principle known as "negligent hiring" holds employers accountable for the damage to their workers. This is if they don't take reasonable care while making recruiting decisions.

Hiring managers can gather information about a candidate's background through their resume and what they shared during the interview. However, the information must still be verified with a thorough background check.

Also, businesses looking for a highly qualified expert for a specific task must ensure that candidates are truthful about their credentials. 

Wrapping Up

An employer may learn more through background checks than interviews and the traditional resume review, given that the information collected is accurate.

As an applicant, if a background check report shows inaccurate information, you can dispute it. You can file a dispute with the consumer reporting agency in compliance with the FCRA.

It is also worthwhile to do a background check on yourself to fix any possible inaccuracies and misunderstandings before they come up.