How Do Employment Background Checks Work?

By Rebecca Koenig

U.S. News, October 9, 2018 —

Employers must seek your permission before delving into your criminal or financial records.

DIGITAL TECHNOLOGY HAS made it easy for employers to peel back the layers of workers’ pasts. And they’re taking advantage of those opportunities: 73 percent of human resources professionals surveyed say their companies run criminal background checks on job candidates, according to a 2018 study by the Society for Human Resource Management and the Charles Koch Institute.

That presents a potential obstacle to getting hired for the nearly one-in-three U.S. adults – 70 million people – who have arrest or conviction records, says Beth Avery, staff attorney at National Employment Law Project.

“Once upon a time, people could move on and find employment despite having an arrest or conviction record,” she explains. “Now, that stigma is something that can follow a person around for years, decades or even the rest of their life.”

Here’s what every job seeker needs to know about employment background checks.

The law requires employers to get permission from job candidates before running a background check. (GETTY IMAGES)

What is a background check?

Many companies share the same strategy when it comes time to find new workers: Hire the least risky candidate.

To that end, it’s safe to assume that employers check out applicants’ social media accounts and type their names into search engines while hiring, looking for evidence that they may or may not make good employees.

Companies that conduct official employment background checks take that process a few steps further by delving into criminal and sometimes financial records to reveal information about candidates such as previous home addresses, vehicles owned and legal judgments against them, says Matt De Leon, vice president of investigations and legislative affairs at Trustify, a company that matches private investigators with corporate and individual clients.

To do this, companies may hire investigators or subscribe to databases of legal and other personal information.

What limits apply to background checks?

Before running these checks, employers are required by law, according to the Fair Credit Reporting Act, to get permission from job candidates.

Usually, companies that offer background-check services are not allowed to disclose records that contain medical information.

If, based on the results of a background check, a company decides not to hire a candidate, the company is required to provide him or her with a copy of the report and information about his or her rights.

Background checks may not legally be used to discriminate against candidates on the basis of race, color, national origin, sex, religion, disability, genetics or age, according to the U.S. Equal Employment Opportunity Commission.

Not every employer follows the rules. But many database companies have protections built into their systems to ensure they don’t run checks without the proper permissions.

“Doing them without the candidate’s knowledge can be illegal and it’s unethical and immoral,” De Leon says. “It’s a bad way to start off a relationship.”

How accurate are background checks?

The accuracy of the information turned up by background checks varies, experts say.

Some employers may use low-cost consumer services that don’t conduct rigorous analysis. These websites can turn up wrong information, especially for job candidates who have common names, according to De Leon.

Professional background check services produce more reliable results. But even FBI records “can be quite inaccurate,” Avery says. For example, she says, some wrongly report that people whose cases were dismissed still have pending criminal charges.

Plus, different databases may yield different results. This all means that “it’s hard for an individual to know what is going to show up on their record when an employer runs a background check,” Avery says.

How should I handle a background check?

Hopefully, an employer will adhere to the law and seek your permission before running a background check. If this happens, and there’s something in your past that may raise questions in a hiring manager’s mind, “be upfront early on,” De Leon suggests.

“I’m always shocked at the amount of people who sign off to have it done, and when it comes back with negative information say, ‘I didn’t know you’d find that,'” De Leon says. “Be honest. People are far more apt to give you a second chance if that’s the case.”

Be prepared to explain, within reason, the results of your check, because some “employers are considering records without fully understanding what the things on that record mean,” Avery says.

What are the trends regarding background checks?

A movement to reign in employment background checks has gained momentum. That’s partially due to lawmakers’ realizations that the practice disproportionately disadvantages people of color, who have higher rates of involvement with the criminal justice system than their white peers.

Workers’ rights advocates have had some success securing “fair-chance hiring” laws that limit the extent to which employers can conduct hiring background checks. One law “bans the box” commonly found on job applications that asks people to indicate whether they have criminal records. As of 2018, 33 states have banned the box for public-sector employees, while 11 states have done so for private-sector workers, too, Avery says.

Some companies have made it a priority to dismantle hiring barriers faced by people who have criminal records. For example, Greyston Bakery, which supplies Whole Foods and Ben & Jerry’s, has an “open hiring” policy that welcomes workers without interviews, background checks or reference calls.

“By forgoing background checks, we’re leading the charge in showing businesses that moving toward a more progressive inclusion model pays off,” said Mike Brady, CEO of Greyston, via a spokesperson.

Greyston recently opened the Center for Open Hiring to teach leaders at other organizations about how to make their employment opportunities more available to people who might not pass traditional hiring background checks.