What Does an Employee Background Check Consist Of?

Previous Employment Check

What does an employee background check consist of?

A standard background investigation involves verifying details of previous employment. This takes two forms:

1. Verification of Employment History

Verification of employment history entails checking the claims made by the candidate in terms of tenure of employment, position, job responsibilities, and salary with the records available with the previous employers for consistency. Such a check could also extend to verification of educational records and claims of past training. Discrepancies usually indicate forgeries or lying by the candidates.

A casual check usually probes the last three employers whereas a detailed security clearance mandates verifying the entire work history.

2. References

Another dimension of background check entails asking for references from candidates, usually from previous supervisors or colleagues. While most such references would not openly commit to any negatives about the candidate for fear of lawsuits, the employer can search for subtle hints or vagueness suggesting that something is amiss.

Reference checking, if done by the employer directly, is free of legal considerations. Entrusting the reference checking to third parties, however, attracts the provisions of the Fair Credit Reporting Act. Section 603(o) of this act mandates special procedures for reference checking.

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Criminal Background Check

The second priority in the background check is verification of criminal records. An employment position that involves contact with the public, working with vulnerable individuals, handling money, work involving public trust, driving, and other special responsibilities requires a criminal background check.

Two ways to undertake a criminal background check include:

• Checking the applicant’s criminal history with local and state law enforcement agencies and court systems.
• Checking the employee’s fingerprint with the Federal Bureau of Investigation (FBI) and the Drug Enforcement Administration.

The process of a criminal background check is time consuming and very often inconclusive. For instance, the FBI takes up to 12 weeks for fingerprint checking, and obtaining foolproof conviction records requires searching at courthouses throughout the country.

Consumer Information Check

Many employers, especially those in the financial sector, check the applicant’s credit and financial history to shed light on the applicant’s trustworthiness and ability to work with financial systems and interests.

Ways to undertake financial or economic background checks include:

• Checking consumer credit bureaus for a history of bad debts or other credit problems
• Securing comprehensive consumer reports from third party consumer research associates. Such reports contain information about the candidate’s personal and credit characteristics, character, general reputation, and lifestyle.
• The tax-check program offered by Internal Revenue Service (IRS), primarily to verify the employee’s previous salary claims.
• Suspicious Activities Report System (SARS): SARS is a list of persons known for suspected participation in criminal violations or suspicious transactions related to money laundering offenses. One method to access SARS is through the Financial Crimes Enforcement Network (FinCEN,) an interagency database.
• Enforcement Action Report System (EARS): EARS contains inter-agency historical criminal referral information and information on persons subject to administrative enforcement actions such as civil money penalties and removals.

Credit and consumer background checks require compliance with the Fair Credit Reporting Act (FCRA).

International Records

Finally, high-profile positions or international employees might be subject to background checks with:

• U.S. Customs.
• U.S. Immigration and Naturalization Services.
• Central Intelligence Agency.
• Interpol.
• U.S. State Department.

Challenges

Background checks are time consuming and not conclusive. They only serve as a general indicator of the candidate’s previous standing, which may not be accurate, and even if accurate might not reflect on the candidate’s current outlook, standing, or nature.

The law mandates informing the candidate in writing and securing their signed consent before undertaking criminal or consumer reference checks. The law also holds that a record of conviction or bad debt should not necessarily result in denial of employment. A good practice is to check whether the negative reference is job related and to provide the employee with an opportunity to present the circumstances surrounding the issue.

The key to a successful background check is to confine it to those aspects that relate to the job.

References

1. Federal Trade Commission. Using Consumer Reports: What Employers Need to Know.
2. Comptroller’s Licensing Manual. Background Investigations.