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In Brief

Background Check Basics

Share these tips for conducting background checks with others in your organization

By Diann Daniel

November 01, 2006 — CSO —

Background checks mitigate risks in the hiring of workers. Yet doing them effectively can be difficult. Laws relating to background checks and criminal records vary by state, and no comprehensive source of national information exists. And while the number of background check vendors has grown in recent years, many are ill-equipped. Share these ideas with HR and legal:

Assess what risks each job poses. While a baseline criminal check may be suitable for every hire, employees who handle cash may need both their credit and criminal records verified. It's important to assess the levels of checks required by your organizationand to justify that expense in terms of risk avoided by doing checks well.

Get legal involved. Legal counsel can help you navigate the tricky landscape of state and national law surrounding background checks. Privacy rules under the federal Fair Credit Reporting Act (FCRA) should guide any third party doing background checks; it limits criminal and credit histories and driver's license checks, and spells out how information must be disclosed. Legal counsel can also help you determine which checks are reasonable for each job.

Be consistent. The same type of records (criminal records, credit reports, driving records and so on) should be checked for each applicant applying for a particular job. Screening one candidate more thoroughly for the same job sets you up for a lawsuit.

Send up red flags. The FCRA requires companies to inform applicants of actions that will be taken if that negative information is uncovered. A detailed policy on how to treat negative findings can protect you.

Create a background check release form. Under the FCRA, you must get permission to run a background check. Legal counsel can help you know when other laws, including state statutes, may apply.

Choose vendors wisely. A good agency should provide you with references and describe relationships with court researchers in all states who can check criminal records both through databases and in person if needed. The agency should also offer privacy safeguardssuch as encryption and maskingfor a candidate's personal information the agency delivers to you.

Other points: Do agency staff verify information such as educational history? Can staff explain what findings mean, in addition to what they are? How does the agency verify negative information? Also ask if data systems are hosted offsite and professionally managed (yes is preferable).

Sources: TransUnion Investigations Manager Daniel Draz; Employment Screening Services President Sheila Benson; HireRight VP of Business Development David Nachman; Carco Group Research and Investigative Division President Timothy Gladura