Intelius is a leading provider that can run unlimited background checks for a fixed monthly fee. The basic background checks it provides offer insights into a person’s employment, education, criminal records, marriage, and any lawsuits, bankruptcies, or liens associated with his name.

The reports are limited but enough to whittle down your candidates before you move on to comprehensive yet more time-consuming reports.

The Difficult Parts of Doing Background Check

Background checks are covered by federal, state, and county laws that oftentimes overlap with each other.

It becomes more complicated when the company hires across multiple locations where laws are applied differently. For example, while one state prohibits access to certain criminal records, another state only limits when and how such records are accessed.

One way to get out of this legal limbo is to make sure the company follows a written background check policy from the get-go. This set of guidelines can be created with the help of in-house legal counsel to ensure consistency in conducting background checks, all while ensuring compliance with existing laws.

If you’re screening applicants from multiple states, there are also third-party background check providers like GoodHire that can simplify the process for you. GoodHire has a built-in adverse reaction workflow which simply means it can automatically recognize the company’s location and the applicant’s location. Based on this information, it identifies overlapping rules and then implements the strictest rule that applies to all jurisdictions.

Step 1: Create a Background Check Policy

Arbitrary background checks turn any company into a magnet for lawsuits. A written background check policy prevents this from happening as it ensures everyone is on the same page.

With a concrete set of guidelines put into place, key decision-makers will be attuned to the type of background checks to be conducted, for whom it will be conducted, and how the results will be interpreted.

Determine the Types of Background Checks To Be Conducted

Pre-employment screening comes in many forms. Depending on the size and nature of your business, you can either conduct all or a select few of these background checks.

The type of background check you’ll implement also varies by position. For example, credit checks may be necessary for positions requiring financial discretion while driving record checks are considered non-negotiable for employees who will operate company vehicles.

When drafting a background check policy, specify which background checks will be performed, and for whom. Here’s a rundown of the different types of background checks to help you get started:

• Basic identity-check – involves checking the validity of the applicant’s social security number and tracing everything associated with it. This includes name, alias, date of birth, and address.
• Criminal records check – wades through databases to check whether an individual has felony or misdemeanor convictions at federal, state, and county levels. Arrest records can result in either conviction or dismissal but it depends on your state which one can be included in your report. In California, for instance, you can’t review arrest records unless they resulted in a conviction. Criminal background checks also involve searches on multi-state sex offender registries and U.S. terror watch lists.
• Civil courts check – brings to light any non-criminal suits that the candidate has been involved in. These may include restraining orders, civil rights violations, or small claims recorded by federal and county civil courts.
• Credit history check – is a required pre-employment screening for candidates vying for jobs in the financial sector. Financial responsibility is a prerequisite in managing other people’s assets, making this type of background check a reliable way to filter out candidates applying for a bookkeeping job or a position in the bank or brokerage. A credit history check collects information about any bankruptcies, unpaid bills collection, tax liens, and payment history associated with the applicant’s name.
• Motor vehicle report – provides insights into a candidate’s driving competency. The driving record check confirms whether the candidate’s driving license is valid. It also brings up any traffic violation and suspension, giving employers a clear picture of the person’s behavior on the road. It’s a required pre-employment screening for applicants who will drive company-owned vehicles for business purposes.
• Employment verification – is the first line of defense against candidates who usually embellish their resumes or omit crucial information to sway hiring decisions in their favor. To put it simply, it’s a background check that ensures the applicants are really as experienced and qualified for the job position as they’re claiming to be. To verify the applicant’s employment history, HR professionals usually reach out to the previous employers to ask about the applicant’s job title, date of employment, duties performed, and circumstances surrounding the applicant’s departure.
• Education verification – mitigates the risk of hiring an impostor, especially for executive-level positions that require advanced degrees. It ensures the candidate went to the exact school and earned the exact degrees as stated on the resume.

The list above is not exhaustive, as companies or staffing firms can also employ other background checks as needed.

Healthcare sanction checks, for example, can be conducted to verify the healthcare professional’s history. Someone with a long list of disciplinary actions, suspensions, or penalties may not be automatically disqualified, but they provide insights into the candidate’s professionalism.

If the applicant is based in the US but previously studied, worked, or lived overseas, there are also international background checks to capture vital details that would have been missed otherwise.

Decide Which Background Checks Should Be Performed on Each Applicant Category

Not all applicants should be subjected to the same set of background checks. After all, employees have varying levels of responsibilities. You don’t push a candidate applying for an entry-level position to the same stringent screening procedure that applicants for a senior management role undergo.

Therefore, it’s imperative to clearly state in the background check policy not only the types of pre-employment screening to be conducted but also for whom. One way to pull this off is by dividing the applicants into different categories and deciding which background checks will be conducted on each category.

For example, Category 1 is at the bottom of the hierarchy so it may include employees or contractors with no access to the company’s operational processes. The cleaning staff belongs to this category and they can be hired after going through basic identity and criminal background checks.

Category 2, meanwhile, may cover most of the company’s employees who use the workstations, drive company vehicles, and have access to operational processes. Therefore, they should be subjected to education verification and motor vehicle report in addition to basic background checks.

Employees in Category 3 are at the top of the hierarchy as they have direct access to the company’s critical resources and information. They include internal auditors, department heads, and senior management. More responsibilities mean more stringent screening. So on top of the background checks required for the previous two categories, Category 3 members will also be subjected to additional and more comprehensive pre-employment screening.

Consult With a Lawyer To Ensure Compliance With Labor Laws

Writing a background policy from scratch without advice from an attorney or the state labor department is a lawsuit waiting to happen. This is because background checks are covered by federal, state, and local laws, and failure to comply with any of these may result in costly and lengthy litigations.

Things get more complicated for multistate employers that have to contend with multiple laws governing multiple jurisdictions. With the help of a lawyer, companies and staffing firms can identify where these laws overlap and figure out how to move forward without violating anything.

In summary, here’s how legal advice can ensure your background check policy complies with rules and regulations:

• Timing of the background checks. Ban-the-box laws prohibit companies or staffing firms from inquiring about the applicant’s criminal history on the initial job application. If you’re in the state, city, or country where ban-the-box regulations are in full effect, you can’t conduct a background check until after a conditional job offer is made. However, exceptions may apply depending on the size of the company and where it’s located. In Washington D.C., for example, ban-the-box law applies only to companies with at least 15 employees working in the district.
• Process of conducting background checks. The Fair Credit Reporting Act (FCRA) has laid out guidelines to make sure the applicant is aware of the background check from beginning to end. FCRA requires employers to provide a consent form to the applicants informing them that a background check will be conducted for employment purposes. In case the background check results led the employer to reject the candidate’s application, FCRA also requires the employer to follow a three-step adverse reaction process. This procedure involves sending the applicant a copy of the background report, waiting for the candidate to respond or make an appeal, before finally sending the adverse action notice.
• Criminal records to be used for background checks. Federal and state laws impose restrictions on the type of records companies can use to influence their hiring decisions. FCRA, for instance, states that the credit history checks should exclude bankruptcies after 10 years and paid tax liens after seven years, among others. The Equal Employment Opportunity Commission (EEOC) also enforces the Title VII of the Civil Rights Act of 1964 which basically prevents employers from making a hiring decision based solely on a person’s criminal record. Discrimination can get you into a lot of trouble so avoid relying on criminal records that have nothing to do with the job position the candidate is applying for. Companies should also consider the nature of the offense and the length of time since the applicant completed the sentence.

As if the federal laws are not complex enough, some state laws also overlap with them and should likewise be considered when drafting the background check policy.

For instance, several states have banned the use of credit reports as pre-employment screening. In places where they’re only restricted, credit reports can only be used to bolster the screening process for applicants in banks and other financial institutions.

Step 2: Choose a Reliable Background Check Company

Deciding to conduct background checks on your own is like a maze that untrained companies will probably never get out of. If you’re not equipped to do background checks, even obtaining criminal records at the courthouse can take almost a lifetime. As a result, potential stellar candidates will lose patience and apply to the competitors instead.

Federal, state, and local laws also govern background checks so unless you have in-house legal counsel available 24/7, lawsuits are always one simple mistake away.

Fortunately, there are third-party providers that can help companies and staffing firms take the guesswork out of background checks.

If you already have a background check policy in place, the next step is to find a third-party provider that ticks all of your boxes. If you have a huge hiring volume, for example, there are companies like Intelius that can meet your needs. By paying a fixed monthly fee, Intelius can conduct unlimited reports about your applicants including their names, aliases, contact information, educational background, employment history, and criminal records, among others.

Intelius can generate reports almost instantly so it’s a good option if you’re looking for basic background checks. Once you’re ready to get more thorough reports, you can home in on the best provider based on two of the most important features that will be discussed below.

Select a Background Check Company With Built-In FCRA Compliance

The Fair Credit Reporting Act (FCRA) exists so you won’t overstep the boundaries of background checking. It determines when to conduct background checks and restricts the records you can use so applicants with criminal convictions won’t be discriminated against.

The problem is different states and cities follow FCRA regulations differently. As a result, employers that hire in multiple locations can have a hard time navigating the legalities of background checking.

An FCRA-compliant background check company does all the heavy lifting so companies can hire the best talents without worrying about compliance. If a company you’re dealing with claims to be FCRA-compliant, ask for the documents that can prove it.

A good company is one that offers individualized assessments so each applicant receives an equal opportunity to prove their competence. It also has integrated workflows so you will get a notification when a rejected applicant receives a pre-adverse action notice, and another one when the final adverse notice is issued.

Take Note of Background Check Turnaround Times

How fast a third-party provider delivers background check results varies depending on the type of records you’re requesting.

Basic background checks can be completed almost instantly whereas employment, education, and license verifications can take up to a week to complete. Criminal records in counties where the database isn’t digitized yet also slow down the process so make sure the provider sets a realistic timeline when completing background checks.

The shorter the turnaround time, the better as you don’t want to lose great talents due to delays.
However, make sure the company doesn’t provide quick results at the expense of quality data. It’s common for some screening providers to cut corners in the name of making more profits in the shortest amount of time.

Make sure to do your due diligence when selecting a background check company based on how fast the turnaround time is. The use of an automated system to scrape off information from online criminal databases is usually a red flag unless the provider can prove that the data are the functional equivalent of what they can obtain offline.

Another way providers take shortcuts is by only searching for the applicant’s name and ignoring other aliases they discover just to save time. Choose companies with proprietary technology that performs a more in-depth search to identify different names associated with an individual, especially those who changed names either by marriage or a civil court proceeding.

Lastly, investigate how the company obtains the records. There are screening firms that outsource tasks to business processing centers in India and the Philippines to save on labor costs. Not only are they making applicants’ data vulnerable to identity theft but also putting the company’s reputation at risk by letting poorly trained workers manually access courthouse records.

Step 3: Prepare the Applicant for the Pre-Employment Screening

As per FCRA regulations, you can’t perform background checks without the applicant’s consent. The process should also be delayed until a conditional job offer has been made to ensure there’s no prejudice against those with past criminal convictions.

These prerequisites are necessary to establish transparency, making both parties less likely to be involved in lawsuits when things don’t work out in the end.

Notify the Applicant About the Impending Background Checks

Before any background check company can do its job, you need to obtain the applicant’s permission first.

This is advantageous in two ways. If the applicant declines to be subjected to pre-employment screening, it means one less problem to deal with. Should the applicant agrees, it can give him time to identify and correct inaccuracies. It will also help him prepare to make a proper appeal in case the results turn out to be unfavorable.

To get the applicant’s consent, the background check provider should issue him two forms: a disclosure form and an authorization form.

Equal Employment Opportunity Commission (EEOC) recommends including in the disclosure form a statement that assures any application won’t be automatically rejected based on criminal conviction alone. The applicant must be given the peace of mind that the employer will consider the gravity of the conviction, the circumstances surrounding the conviction, and how much time has passed since the conviction before making a hiring decision.

To consent to the background check, the applicant must fully understand what’s written on the disclosure form and subsequently sign the authorization form provided.

In addition to the two forms mentioned, the applicant must also be given a copy of the Federal Trade Commission (FTC) document entitled “A Summary of Your Rights Under the Fair Credit Reporting Act.” This document ensures the applicant knows his rights are protected under FCRA and that the employer is obligated to perform background checks without violating these rights.

Make a Conditional Job Offer

A job offer contingent on the completion of the required background checks is considered best practice. This is especially true if the company is hiring in states where ban-the-box laws are implemented.

Ban the box prohibits employers from conducting pre-employment screening during the initial interview or prior to making a job offer. This law is now being applied to private employers in states such as California, Connecticut, Hawaii, Colorado, Illinois, New Mexico, Vermont, Rhode Island, and Washington.

Step 4: Perform the Background Check

Outsourcing background checks to an FCRA-compliant provider takes away a huge burden from your shoulders. By contrast, conducting an in-house background check requires that you have your own infrastructure to automate the process, as well as a technical team to take care of system upkeep.

Depending on the types of data you’ll need to obtain, a background check can be completed within a span of two to five days. As mentioned previously, it’s imperative to deal with a third-party provider that guarantees quick turnaround time without sacrificing the quality of the results.

Conduct Basic Identity Verification

A basic background check can be completed almost instantly, provided you have already obtained the applicant’s personal details.

In order to perform an initial identity check, you need the person’s name, social security number, birth date, and addresses for the past seven years. The addresses are needed so the screening firm won’t miss any criminal convictions recorded in other states or counties outside of the applicant’s current place of residence.

Once the data are entered in the background checking company’s web portal, the system will return results that will determine what steps you should take next. If the initial identity verification returns questionable results, you can decide not to proceed to the next step until the issue is addressed. Otherwise, you can perform more in-depth background checks.

Proceed to More Thorough Background Checks

For most employee categories, basic identity verification is just the first step. In order to construct a more accurate portrait of a person’s character and history, you need to conduct background checks using multiple databases.

Here’s an overview of some of the standard components of background checks and what is often involved in each of them:

• Criminal record check – entails a comprehensive search of criminal databases at federal, state, and county levels. Employers face the challenge of getting access to records from multiple jurisdictions, but a competent background check company can provide the right assistance.
• Civil records check – reveals any employment-related lawsuits associated with the applicant. There’s no connection between record departments of different counties so the assistance of a background check provider is likewise highly sought after.
• Employment, education, and license verification – are conducted to ensure the applicants are really who they claim to be. Altogether, these background checks take a lot of time to complete. The data needed to complete the verification are available in public records but one with a signed release can obtain them.
• Credit check – involves evaluation of the applicant’s credit history. However, the data are off-limits to the public and the credit bureaus won’t disclose them unless you have the permission, right, and authority to obtain them.
• Motor vehicle records – refer to driving records that can be released to a background check provider with a signed release.

Step 5: Make a hiring decision based on background check results

The outcome of background checks can either be favorable or unfavorable to the applicant. Apparently, it’s easy to issue a permanent job offer to applicants with no criminal convictions. But what if the qualified candidate isn’t starting with a clean slate? With FCRA regulations, ban-the-box laws, and the Equal Employment Opportunity Commission forbidding employers from rejecting applications based on past criminal acts, the answer is not as straightforward.

Subject the background check results to multiple levels of review

When making a critical hiring decision that can impact the entire organization, multiple pairs of eyes are better than one. By putting the background check results under the scrutiny of several key decision-makers, biased judgments are thrown out of the picture. For example, a decision made by a hiring manager can be reviewed by the vice president for human resources, the vice president of benefits and compliance, or both. This ensures accuracy and principle of fairness are observed and no great talent is wasted through a haphazard decision.

Of course, there are instances when you can’t exercise the same fairness. If the person is applying for a government position and the federal government explicitly mentions it’s not open to anyone with felony convictions, then you must follow the rule. In most cases, however, a three-part test can come in handy.

Also known as a “targeted screen,” the three-part test involves examining the nature or gravity of the crime, the context of the said crime, and how long ago since it was committed. For example, if a person was charged with possession of marijuana when he was a teenager, it’s probably safe to give him a chance so long as he has all the qualifications needed to fulfill the role. But even if the crime is serious enough to prevent an otherwise strong applicant from being considered for the job, the Equal Employment Opportunity Commission (EEOC) still offers hope in the form of individualized assessment.

Provide individualized assessment to rejected applicants

An individualized assessment simply means giving applicants who have been deprived of an opportunity a chance to redeem themselves. For all you know, there might be a real inaccuracy in the background check results and an individualized assessment gives the applicant enough time to set the record straight.

In order for an individualized assessment to take place, employers must follow a three-step adverse action process. An adverse action is a procedure employers need to complete when rejecting applications after the background results have been obtained. The background check company may perform the needed adverse action process on the employer’s behalf but the important decisions must still be made by the latter.

Here are the three steps required to ensure the applicant is given an individualized assessment:

• First, send a pre-adverse action letter to the applicant notifying the person about your decision and how the background check results influenced the negative outcome. Along with the pre-adverse action notice, you should also include a copy of the background check report, the contact details of the third-party provider that ran the background checks, and a copy of the FTC’s “A Summary of Your Rights Under the FCRA.”
• Give the applicant ample time to process the outcome so that he or she can file a dispute if necessary. Although the standard waiting time is five business days, some states governed by ban-the-box laws require longer. Make sure the background check company you’re working with is aware of the regulations so the automated adverse action process can be adjusted accordingly.
• Once the waiting time is over, and nothing has influenced you to change your decision, you can then send the final adverse action notice to the applicant.

Make a final hiring decision

In case the applicant showed resiliency in proving his or her innocence, or if the background check results prove to be inaccurate, refrain from sending the final adverse action letter.

If the position is of critical importance to the company, organize an appeal panel so a reasonable decision can be made. This panel may include representatives from the Legal, HR, Security, and other departments deem to be important in making company-wide decisions.

If the majority agrees, you can push through with the job offer and mitigate the risks of the decision by conducting post-employment background checks.

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