Background Checks Remain Important, if Imperfect, for Employers

Every employer needs a thorough and legally sound hiring process. Although there’s no federal law mandating background checks for private sector jobs, they’re generally considered a recommended step for some positions and a clear-cut necessity for others.

But background checks are apparently far from perfect. In an article published in the February 2024 issue of Criminology, researchers described their analysis of both legally regulated and unregulated background checks on 101 people with criminal records in New Jersey.

The study found that 90% of participants had false negatives in their regulated background checks, meaning the background checks failed to report incidents found in official government records. Meanwhile, 60% of participants had at least one false positive error in their regulated background checks, meaning the background checks reported an incident that doesn’t appear in official government records.

Paint a fuller picture

Do disappointing statistics like these mean your organization should give up on background checks? Probably not. Comprehensive and legally compliant background checks, properly conducted by either your organization or a trusted third party, can still reveal noteworthy information about job applicants such as:

• Resumé inaccuracies,
• Personal financial difficulties,
• Motor vehicle violations,
• Litigious behavior, and
• Criminal charges or convictions. 

Now, in and of themselves, any of these items may or may not represent “deal breakers” to hiring someone. Much depends on the specific facts and circumstances, as well as the type of position you’re looking to fill. But background checks can still paint a fuller picture of job candidates that may enable you to lower the risk level of new hires. It’s just important to bear in mind that background checks are but one piece of the puzzle.

Look deeply

How deeply your background checks should go is a subject worth considering — or reconsidering if you haven’t done so in a while. For instance, verifying previous employment history is typically considered optional but advisable. Contact all references to ensure applicants held the positions they claim. As you may already be aware, many employers today will confirm only basic details about former employees because of liability concerns. Also confirm that applicants have the academic credentials, military service records and professional licenses stated on their resumés.

In some instances, employers are now checking job candidates’ credit reports to learn whether applicants are consistently late paying bills, swimming in debt or have filed for bankruptcy. This is obviously critical information if you’re hiring someone who will have access to cash or financial accounts. Just keep in mind that money troubles might stem from personal hardships such as prolonged unemployment or illness.

Keep it legal 

While conducting background checks, or just considering whether and how to conduct them, be sure to make legal compliance your highest priority. Particularly germane is the Fair Credit Reporting Act. Among other requirements, it mandates employers to obtain signed employee agreements before the hiring organization requests any type of “consumer report” — which includes credit reports, criminal background checks and many other types of documents.

And a final point of distinction: Conducting background checks isn’t the same as verifying applicants’ work eligibility status in compliance with U.S. Citizenship and Immigration Services rules. Employers must complete Form I-9, “Employment Eligibility Verification,” for every person they hire.

Protect yourself

The job market remains relatively tight for employers in most industries. So, if you need to hire, don’t be surprised if it’s slow going or there’s tough competition. Just make sure to take the necessary steps to protect your organization from those who would do it harm and to maximize the likelihood of hiring productive, long-term employees. That should include working with an attorney when necessary. For help identifying and managing the costs and financial risks of your hiring process, contact us.

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