The Importance of Background Checks in Hiring: A Comprehensive Guide for Employers

In today’s competitive job market, it is essential for employers to conduct thorough background checks on potential employees. Hiring the wrong person can have serious consequences for your organization, including potential legal liabilities and damage to your reputation. By implementing a comprehensive background screening program, you can reduce the risk of negligent hiring and make informed decisions about the individuals you bring into your organization.

The Need for Background Checks

The Limitations of Trust

In the hiring process, it is no longer sufficient to rely solely on trust. While a resume and interview can provide some insight into a candidate’s qualifications, they may not reveal important information about their past. Conducting cheap background checks allows you to verify the accuracy of an applicant’s claims and ensure they are a good fit for your organization.

Legal Obligations and Liability

Employers have a legal obligation to protect their business, staff, and customers from any foreseeable harm caused by an employee or volunteer. Negligent hiring lawsuits are on the rise, and organizations can be held liable for the actions of their employees. By conducting background checks, you can demonstrate due diligence in your hiring practices and reduce the risk of legal liabilities.

Ensuring Safety and Security

Background checks help organizations ensure the safety and security of their employees, customers, and assets. By uncovering criminal records, verifying education and employment history, and conducting other relevant searches, you can identify potential red flags and make informed decisions about the suitability of a candidate for a particular role.

Understanding the Fair Credit Reporting Act (FCRA)

The Fair Credit Reporting Act (FCRA) is a federal law that regulates the collection, dissemination, and use of consumer information, including background checks. It is important to understand and comply with the FCRA when conducting background checks to protect the rights of applicants and avoid legal issues. Here are some key points to consider when conducting a cheap background check:

Providing Proper Notifications and Obtaining Consent

Before conducting a background check, employers must provide applicants with a “Summary of Your Rights under the Fair Credit Reporting Act” and obtain their written consent using an Authorization and Release Form. This ensures that applicants are aware of their rights and have given their permission for the background check to be conducted.

Adverse Action Procedures

If you decide not to hire or take adverse action against an applicant based on information in their background check report, you must provide them with a copy of the report and an Adverse Action Form. This form informs applicants of their rights to challenge the accuracy of the report and take appropriate steps to correct any errors.

Compliance with FCRA Guidelines

Employers must follow all FCRA guidelines and regulations when conducting background checks. This includes ensuring the accuracy and completeness of the information obtained, using reputable background check providers, and using the information for permissible purposes, such as hiring, promotion, or reassignment decisions.

Developing an Effective Background Screening Program

To establish an effective background screening program, it is important to follow best practices and implement a comprehensive approach. Here are some guidelines to consider:

Create a Written Background Check Policy

Develop a written background check policy specifically tailored to your organization’s needs and requirements. This policy should outline the types of background checks to be conducted, the process for obtaining consent, and the procedures for handling adverse action.

Understand Federal, State, and Local Laws

Familiarize yourself with the laws and regulations governing background checks at the federal, state, and local levels. These laws can vary, and it is important to ensure compliance with all applicable regulations to avoid legal issues.

Use a Combination of Screening Products

Utilize a combination of screening products to gather comprehensive information about applicants. This may include criminal records searches, verification of education and employment history, reference checks, and other relevant searches based on the nature of the position.

Establish Clear Evaluation Criteria

Establish clear criteria for evaluating background check information and determining disqualifying factors. This will ensure consistency in the decision-making process and help protect against claims of discrimination or unfair treatment.

Maintain Confidentiality and Data Security

Ensure the confidentiality and security of applicant information throughout the background check process. Implement appropriate safeguards to protect sensitive data and comply with data protection regulations.

Types of Background Checks

Background checks can vary depending on the nature of the position and the specific requirements of your organization. Here are some common types of background checks to consider:

Criminal Records Searches

Criminal records searches can help identify any past criminal activity of applicants. This may include county, state, and federal criminal records checks, as well as searches of sex offender registries.

Employment and Education Verification

Verification of employment and education history can help ensure that applicants have the qualifications and experience they claim. This may involve contacting previous employers or educational institutions to confirm dates of employment or attendance and job titles or degrees earned.

Reference Checks

Reference checks involve contacting individuals provided by the applicant as references to gather information about their character, work ethic, and suitability for the position. These checks can provide valuable insights into an applicant’s past performance and behavior.

Professional License and Certification Verification

For certain positions that require specific licenses or certifications, it is important to verify that applicants possess the necessary credentials. This may involve contacting licensing boards or certification organizations to confirm the validity of the licenses or certifications claimed.

Credit History Checks

Credit history checks may be relevant for positions that involve financial responsibilities or access to sensitive financial information. These checks can provide insights into an applicant’s financial responsibility and may help assess their trustworthiness.

Drug Testing

Drug testing may be conducted to ensure a drug-free workplace and assess an applicant’s suitability for safety-sensitive positions. This typically involves screening urine or other samples for the presence of illegal substances.

Selecting a Reputable Background Check Provider

When choosing a background check provider, it is important to select a reputable company that adheres to industry best practices and complies with applicable laws and regulations. Here are some factors to consider:

Certification and Accreditation

Look for providers that are certified by reputable industry organizations such as the Professional Background Screening Association (PBSA). Certification indicates that the provider has met rigorous standards for quality and compliance.

Accuracy and Data Quality

Inquire about the provider’s accuracy rates and resolution rates. Accuracy refers to the provider’s ability to provide up-to-date and correct information, while resolution rate refers to their ability to address any discrepancies or errors in the reports they provide.

Compliance with Legal Requirements

Ensure that the provider complies with all legal requirements, including the FCRA and any applicable state or local regulations. This will help protect your organization from potential legal issues.

Reputation and Customer Reviews

Research the provider’s reputation and read customer reviews to get a sense of their track record and customer satisfaction. Look for providers that have positive reviews and a strong reputation for quality and customer service.


Background checks are an essential component of the hiring process and can help organizations make informed decisions about potential employees. By conducting comprehensive background checks, adhering to legal requirements, and selecting reputable providers, employers can reduce the risk of negligent hiring, ensure the safety and security of their organization, and make confident hiring decisions.

Remember, it is important to consult with legal professionals to ensure compliance with applicable laws and regulations and to develop a background screening program that meets the specific needs of your organization.