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8 Common Mistakes Made When Conducting a Background Check on an Employee

By Christian Moore

Are you considering someone for promotion or have you advertised an open position at your company, interviewed a dozen candidates, and decided which person you want to hire? If so, it may be time to complete a background check.

It can be very difficult to feel comfortable with a hiring or promotion decision without completing a thorough background check. Making a smart hiring decision is impossible without having all of the critical information you need. A background check provides you with facts that go beyond the information provided to you by the candidate, or what “your gut” may tell you.

The purpose of a background check is to ensure you make an informed decision. While a background check is not able to guarantee the future actions, attitude or effectiveness of a job candidate, a background check can uncover past problems that may indicate he or she is not an optimal choice.

Small business employers often attempt to conduct background checks on their prospective new employee’s, sometimes on their own using a quick, cheap and inaccurate online service. However, because a small business does not hire as frequently as a medium or large-sized business, a small business owner does not necessarily realize the importance of conducting a background check correctly. When it comes to a background check, there are numerous considerations that must be taken into account; some are issues of business process and some are strictly legal in nature.

The bottom line is this: It’s incredibly important for a small business to be careful when performing a background check on a potential employee. Conducting a background check can be a complex endeavor. In other words, it’s important to understand where and how you can ethically and legally garner information about your job candidate. In many cases, it’s beneficial to hire a professional screening service to conduct a background check on your job candidate. A competent, professional screening service should aid in reducing the risk associated with making a bad hire or retention decision during the background check process.

If you are a small business owner, it’s important to avoid the following mistakes when performing a background check.

1. Not having a background check policy in place.

Running a background check on a candidate being considered for one position, but not running a check on a candidate being considered for another similar position can be considered discriminatory.

2. Only checking a national criminal history database.

It is a mistake to rely solely on so called “national” criminal history databases. I am still shocked that employers are still willing to use these products as standalone services regardless of the potential pitfalls and increased legal liability associated with doing so! Primary source verifications should always be used in conjunction with any kind of “national” criminal history database.

3. Not understanding employment laws.

There are several laws that should not be broken during the background check process. It’s important that the person conducting the background check understands the complexities of such rules and regulations. More importantly, it’s important that you have a screening partner who not only understands the laws which apply to CRA’s (i.e. background screening companies) and how they report on information contained in a background check, but also understands the rules that apply to employers and how they are legally allowed to use any reported results to make an informed (and legal) hiring or retention decision.

4. Using social media as your only information source.

While it’s tempting to look at a job candidate’s social media accounts, the information you may find on a person’s Facebook or Twitter account can lead to inadvertently discriminating against the prospective employee.

5. Avoiding education verification.

Many employers focus heavily on employment verification and professional references, but neglect to verify the validity of the candidate’s educational background.

6. Skipping background checks on vendors, contractors and temporary workers.

When a company skips a background check just because he or she is not a “permanent” employee is a mistake. Anyone who has access to a company building or company files should be screened.

7. Relying on automated software.

Computers and software can certainly be helpful during the background check process, but the information gathered by a computer is not necessarily as reliable as the facts that can be obtained by a human. In an ever changing compliance landscape, automated adjudication may aid and assist in the screening process, but it shouldn’t be the only means by which you “clear” candidates or employees.

8. Forgetting to get the job candidate’s permission.

It’s important to remember that a job candidate must be given proper disclosure and consent to conduct a background check. Some states have more rigorous requirements and may require special notices or disclosures (such as NY State and their existing NY Correction Law Article 23-A).

There is a lot of information that a small business owner must remember when hiring a potential employee to fill a position. Just as importantly, it is equally vital that an employer understands what must be done when the candidate or employee is going to fall under an “adverse” action. If the consumer report is used in “whole or in part” in making the employment or retention decision, you must adhere to the pre-adverse and adverse action process!

Make sure you discuss your screening program with legal counsel and engage a screening company who will work in partnership to design, build and execute a successful and legally compliant background screening program.  

About Christian Moore:

Christian Moore is the COO at Global Verification Network. He has more than 20 years of investigative and business experience with competencies including surveilance, competitive intelligence, pre-employment and course-of-employment background screening. 

@2011 – 2015 Small Business Bonfire.