The BASICS

A background check is a process where an individual’s personal, professional, financial, or criminal history is reviewed to ensure they meet certain criteria or standards. This process can be conducted by employers, landlords, or financial institutions to verify information or assess potential risks. Background checks provide a thorough review of a person’s history, ensuring they are trustworthy and reliable for the task at hand.

• Why Is It Important?
  Background checks help protect employers, property owners, and even individuals themselves by revealing hidden issues such as a criminal record, fraudulent activity, or other concerns.
• In short, they allow organizations and individuals to make well-informed, safe decisions when hiring or engaging with others.

Why Do We Need More Background Checks?

With increasing incidents of fraud, workplace violence, and other safety concerns, background checks are becoming more essential than ever. More organizations and individuals are recognizing the importance of verifying backgrounds before committing to a decision. For example:

• Preventing Workplace Violence: Employers in high-risk sectors, like healthcare or education, need to ensure that their employees don’t pose a danger to others.
• Enhancing Security: Personal safety is also a priority for landlords and property managers, ensuring tenants have no criminal history that could threaten neighbors or property.

Background checks not only reduce risks but also foster a secure and transparent environment in any professional or personal setting.

How Do Background Checks Impact the Hiring Process?

Background checks are a crucial tool for mitigating risks and ensuring the safety of your workplace. Employers rely on them not only to confirm the accuracy of the information provided by candidates but also to prevent negligent hiring and retention. Negligent hiring occurs when an employer hires an individual without properly vetting them, exposing the organization to potential legal liability and workplace risks. This can result in costly lawsuits, workplace accidents, or even reputational damage.

Here’s how background checks help mitigate these risks:

• Avoiding Negligent Hiring and Retention
  • Negligent hiring can lead to serious legal consequences. Employers who fail to screen candidates thoroughly could be held responsible if the employee engages in harmful behavior, such as workplace violence or fraud.
  • Negligent retention refers to the practice of continuing to employ someone who poses a known risk. A background check can uncover issues that may have been missed during the initial hiring process or arise after an employee has been hired.
• Statistics on Negligent Hiring and Retention Risks
  • 79% of employers lose negligent hiring and retention lawsuits due to failure to conduct adequate background checks​
  • Companies that don’t screen employees for criminal history face a higher risk of workplace violence, which can result in costly legal settlements​.
  • 40% of workplace violence incidents are linked to employees who were hired without proper background screening​
  • A study by the National Safety Council found that workplace violence costs employers an average of $120,000 per incident​
  • Employers who conduct thorough background checks reduce their risk of employee theft by up to 40%​

By conducting comprehensive background checks, employers can significantly reduce the risk of negligent hiring and negligent retention, ensuring a safer and more compliant workplace.

What Do Most Background Checks Look For?

Background checks vary depending on the role or situation, but generally, they look for:

• Criminal History: Whether the individual has been convicted of any felonies or misdemeanors.
• Employment History: Verification of past employment to ensure the applicant has the necessary experience for the role.
• Education Verification: Confirmation of the candidate’s academic qualifications.
• Credit History: Important for roles involving financial responsibilities, as it highlights a person’s financial integrity.
• Motor Vehicle Records (MVR): Relevant for roles that involve driving as part of the job.
• Drug Testing: To ensure the individual is free of substances that may impair their ability to work safely.

What Is a Red Flag in a Background Check?

A red flag in a background check is an issue that could indicate potential risks. These include:

• Criminal Convictions: Depending on the job, a criminal record may be a dealbreaker, especially for positions involving trust, safety, or financial responsibility.
• Inaccurate Information: Discrepancies between what was claimed on the application or resume and what the background check reveals.
• Unexplained Gaps in Employment: Extended periods without employment, especially if they are not adequately explained.
• Negative Reference Checks: Poor reviews or comments from past employers or colleagues can be a warning sign.

These flags should be carefully evaluated in the context of the position being applied for, as some may be more relevant than others.

Why Do Employers Do Background Checks After You Are Hired?

In certain cases, background checks may also be performed after an individual is hired, especially if the role changes or if the employee is promoted. For example:

• Ongoing Compliance: Some roles, especially in regulated industries, require regular background checks to ensure continued compliance with safety or legal standards.
• Periodic Re-screening: Employers might conduct background checks after an employee has been with the company for some time to ensure their current qualifications and trustworthiness remain intact.

This practice is especially common in industries like finance, healthcare, and transportation.

How Long Do Background Checks Usually Take?

The duration of a background check can vary depending on its depth and the sources it checks. Simple checks, like identity verification or credit history, may take only a few minutes to a day. However, more detailed checks, such as those involving criminal records or employment verification, can take several days.

• Typical Timeframe: Most background checks take between 1 to 7 days. However, certain factors like court delays, missing records, or manual courts can extend the process.
• Instant Results: While database searches can yield almost instant results, federal law requires that all database “hits” be confirmed through the originating sources, (i.e. the local courthouse.)  So, don’t be fooled by dishonest on-line ads claiming instant background checks.

How Much Do Background Checks Typically Cost?

The cost of a background check can vary depending on the type and depth of the search:

• Basic Checks: Simple background checks can cost as little as $20 to $50.
• Comprehensive Checks: More in-depth screenings, including criminal, credit, and employment verification, can range from $65 to $200+.
• Specialized Checks: For specialized roles, such as healthcare or financial positions, background checks may cost more due to additional screenings, such as medical credentials or licensing, education, and employment verifications.

Is a Background Check Worth It?

Yes, a background check is absolutely worth it. While there may be some costs and time involved, the benefits far outweigh these factors:

• Increased Safety: Ensures that those you’re hiring or engaging with are trustworthy.
• Reduced Legal Risks: Helps protect businesses from negligent hiring lawsuits.
• Improved Hiring Decisions: Provides more accurate and complete information about a candidate, reducing the chances of a bad hire.

Are There Any Compliance Issues for Running Background Checks?

Yes, there are several compliance issues to consider when running background checks:

• Fair Credit Reporting Act (FCRA): The FCRA regulates the use of background checks for employment and requires that applicants are notified and give consent.
• State and Local Laws: Many states and localities have “Ban the Box” laws that prevent employers from asking about criminal history before a job offer is made.
• Equal Employment Opportunity (EEO): Employers must ensure that their use of background checks does not discriminate against candidates based on race, gender, or other protected statuses.

It’s essential for businesses to stay compliant with these regulations to avoid legal complications.

Conclusion

Background checks are a critical tool for making informed decisions in hiring, renting, and other areas of life. They help ensure safety, reduce risks, and improve the overall quality of decisions by revealing important details that might otherwise be overlooked. Understanding the different types of background checks, their importance, and how they impact the hiring process is key to making the best choices for you or your business.

For more information on background screening and compliance, you can explore Edify’s comprehensive resources on background checks. Additionally, for guidelines on conducting compliant background checks in the hiring process, check out this insightful article by SHRM on conducting background checks for employee selection.

By partnering with a reliable background check provider, individuals and organizations can protect themselves, create safer environments, and build trust with others.