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Company Background Check: How They Work and What They Look For

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More and more businesses are performing background checks on potential employees.

Background checks conducted by companies on potential employees ensure the safety of their existing employees and customers and the financial security of their businesses.

Background checks are a significant part of the hiring process.

One of the best ways to make sure a hiring manager recruits the right people is to do a company background check first.

Some employers only perform employment background checks on high-level positions where they fear information may leak that could hurt the company’s reputation.

In contrast, others perform a criminal background check on all prospective employees as a matter of course.

This guide will give you an overview of what these checks entail and what they can reveal about you.

You’ll also get tips on preparing for a background check, resources for what employers will discover, and the information they are not allowed to check.


What Is a Background Check?

A background check is a detailed assessment of someone’s professional and personal life.

When performed by professionals, background checks can tell you if your potential employee or contractor has a criminal record, has filed for bankruptcy, or if they have a history of committing fraud.

Companies can perform many different employment background checks on an individual, depending on what information they are looking to obtain.

Some common types include employment background screening and a pre-employment background check.

In addition to these categories, there are also other more specific types such as identity verification services, drug testing services, social security number trace services, and motor vehicle records search services, to name a few.

What Does a Background Check Consist Of?

A criminal background check examines a person’s criminal history and employment verification.

A background check can tell a hiring organization plenty about the person considered for an offer to a particular position.

It includes arrests, charges, warrants, convictions, or civil lawsuits related to fraud and abuse or discrimination.

A company’s background check aims to prevent fraudulent employees from being hired or retaining employment.

What Is the Background Check Process?

The process begins with a request from an employer to perform a background check on an employee.

The hiring department can do this through in-house resources or by hiring third-party background check companies to do it for them.

The background check company requests public records such as immigration, real estate, driving, criminal history, and military service records.

The organization may also need to contact previous employers, lenders, and other references listed.

After compiling all findings into one report, the background check company sends that report to their client.

They then decide whether or not they want to keep their current member of the workforce or hire the applicant.

How Long Does an Employment Background Check Take?

Usually, a company background check only takes a few days to complete.

It all depends on how quickly they can find and verify your previous employment history.

In most cases, companies need to contact your previous employer(s) directly and may also ask you for more information to confirm your identity.

Once everything is verified, they’ll typically pass it along to you and give you their hiring decision.

Why Are Background Checks Needed?

Employment background checks are essential for any company that wants to hire employees.

The main reason for performing a background check on potential employees is to protect a business from legal liability.

If a company hires an employee who commits a crime while working for the company, it can result in a lawsuit.

To prevent these lawsuits, companies need to ensure that all employees have clean records before hiring them and do periodic background screenings to provide the same.

This information will help keep the business safe and prevent the organization from facing legal issues.

Background Checks: What Employers Will Discover

Company background checks will look into your past professional history.

These employment background checks may cost you a job if you haven’t been entirely truthful about your past jobs.

If found out, the company will automatically rule you out of employment.

What Information Employers Are Allowed To Check

The Fair Credit Reporting Act (FCRA) governs employers’ use of employment background checks.

A business is allowed to conduct a background check on you before offering you a job.

They can get information from your past employers, schools, and criminal history.

You have rights under FCRA when it comes to your personal information.

If an employer gets your personal information through a background check, you have the right to request a copy that the company has to provide.

If they decide not to hire you based on something in your background report, they must give you written notice that includes all of their reasons for doing so.

What Information Employers Are Not Allowed To Check

Under Federal law, employers may not make a hiring decision based on race or national origin.

They also may not discriminate against employees or applicants based on their religion or gender.

For example, an employer cannot refuse to hire an applicant because she is Catholic, Protestant, Muslim, Jewish, or atheist.

In addition to these protections under federal law, the law prohibits discrimination in employment based on race or sex.

The law also prohibits discrimination in employment based on marital status and sexual orientation.

How To Prepare for a Background Check (5 Tips)

A background check is a crucial part of the hiring process, but it can also reveal information you’d rather keep private if you apply for sensitive positions.

To pass any background check, you must be prepared and do what it takes to cover all bases.

Here are five tips on preparing for a background check to ensure that everything turns out positively.

1. Clean Up Your Social Media Profiles

While you’re applying or during your employment, an employer may ask you permission to do a thorough background check.

Make sure that they see your best side before making any decisions by cleaning up all of your social media profiles.

For example, you don’t want them to see any photos of you getting drunk on vacation.

Remove anything that will be perceived negatively and only allow positive information about yourself to show up online.

If it’s not there, the company can’t use it against you.

2. Keep Good Records of Your Academic History and Past Employment

Before any employment background screening, ensure you’ve kept all your academic transcripts and work history up-to-date.

Your prospective employer will almost certainly require official copies of these documents.

Without the required documents, the organization might reject your application.

Make sure you have everything requested well before your scheduled interview.

3. Get Copies of Your Records

A crucial step to preparing for your background check is requesting your records from all previous employers.

These documents are evidence of your work history and character.

If you’re having trouble getting your records, speak with someone who works in human resources at your past employment places.

4. Let Your Professional References Know They May Be Contacted

Whenever you’re applying for a job, your potential employer will likely ask your references if they’ll be willing to talk about you.

It’s in your best interest that these people know it might happen.

Inform them of what position you’re applying for and when.

You can also give them a brief description of why their reference is essential to your candidacy and let them know how much information is appropriate to share with an interviewer.

They won’t be caught off guard by an unexpected call or email from an interviewer asking about you.

One way to do that is through a letter stating your request and signed by you.

Asking in person is also good practice.

5. Be Honest Throughout the Process

There are several opportunities to verify or explain your history during the hiring process.

Please take advantage of them.

For example, if you have any arrests on your record, mention them in a personal statement or add an explanation in additional information space.

Make sure to include everything relevant and helpful.

Background Check Frequently Asked Questions

Here are the frequently asked questions on employment background checks.

What to do if you fail a background check?

If you are not successful in getting hired after a background check, it is crucial to understand why.

This information will help you learn from your mistakes and improve your chances of success next time.

You should also remember that just because one company didn’t hire you doesn’t mean there aren’t other companies out there who will be willing to take a chance on hiring you.

Can I dispose of background information?

As an applicant, it’s essential to be completely honest about your background.

The best way to do that is by providing all of your information on your application.

If you have a criminal record or something else in your past, that may cause you problems later, list it and explain what happened.

This honesty shows you’re upfront and gives employers a chance to know you better before deciding.

What do I do if I can’t remember my work history?

Even if you can’t remember every job or task you’ve ever done, you can take a few steps to reconstruct your work history.

These include:

  • Requesting a Social Security Earnings Information Form from the Social Security Administration at a fee.
  • Going through past tax records from the IRS, such as w9 or 1099. You can access most IRS tax records through routine access designed to obtain them quickly and easily.
  • Refer to your credit report.
  • Access your online records, such as emails.

Will a misdemeanor or a felony show up on a background check?

A misdemeanor or felony will show up on a background check service, but it depends on how long ago it was and whether you completed your sentence.

Criminal records are public information.

When someone runs a criminal background check on you, they pull data from public databases like arrest reports and court records.

What’s Next?

You can do many things to get ready for your employment background screening.

Knowing what lies ahead before it comes will make it easier for you and your employer.

Don’t forget that an employment background screening process is as much about validating that you are who you say you are as it is about knowing if there is anything off-putting in your history.

Take these steps, do your homework and know what to expect when going through an employment screening.

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