The resume, the go-to reference in most job applications, is where an employee portrays themselves at their best. While a resume provides a lot of important information about a candidate's achievements and experiences, the drawback is that the information may be tweaked, false, or fail to identify a red flag in the candidate's background. Employers want to get the “big picture” of a candidate so they can make informed hiring decisions, and running a background check is a way to access information about identity, credit history, driving records, criminal records, and business references.

Getting Permission

You must get permission from the applicant before performing certain types of background checks. While in some states certain records such as driving records, bankruptcy, and criminal history are publicly available, it is safest to ask permission before delving into an employee's background. An application can contain a section that details the types of checks that may be performed and requests a signature of authorization. This can also be expressed to new employees through an Employee Handbook.

Citizenship and Identity

An application for employment should require the prospective employee to provide identification information; most importantly their full legal name and Social Security number. This information is key to all other aspects of a background check as they verify the exact identity of the applicant and can be used when requesting a report from a credit reporting agency.

Verifying identity and citizenship protects a company legally and financially. I-9 forms, which are federally mandated to be completed upon employment, ensure the citizenship status of an applicant.

Consumer Reports

The most comprehensive and common type of background check on new employees is a consumer report from a credit reporting agency. The limitations of gathering this information and its uses are federally covered by the Federal Credit Reporting Act.

The major consumer report agencies are Equifax, Transunion, and Experian. A sample report from Experian can be found here.

Among the information a consumer report contains is the employee's credit history, liens and debts, and history of residence. Like driving records, credit history can be used as an indications of reliability in a prospective employee but can be considered discrimination if used against an employee without a demonstrated connection between the job and handling finances. That being said, the FCRA mandates that if any information from the credit report influences the decision to not hire someone, the reasoning must be disclosed and explained to the candidate in writing. This gives the employee the opportunity to correct any inaccurate information or encourages them to reapply once they correct any relevant credit ratings.

The average consumer report from these sites costs around $20 and takes approximately a week to complete. There is a noted history of inaccuracies – major and minor – in these reports, though government agencies exist for people to appeal any misinformation.

Driving Records

Driving records, including accident history and infractions such as DUIs, are publicly available in many places. While a driving record can be used to evaluate the responsibility of a candidate, it is usually not sufficient grounds to not hire or terminate an employee on – unless, of course, the job involves driving. An inquiry into driving records can be made with an applicants Social Security number and their written permission.

Work History

Work history information can be checked through both a consumer report and a resume. After obtaining permission from the employee, you can arrange to discuss the candidate with their former employers. This is often the most valuable information about an employee, as it gives empirical evidence of habits, work ethic, and behaviors that are observed by a manager or simply just to give an idea of a candidate's character. References have the drawback of potentially carrying a positive or negative bias.

Criminal Records

The availability of criminal records varies by state. For instance, in California credit reporting agencies can only access the past 7 years of criminal history. Some states offer different levels of protection, others offer none at all. Some states require permission to access criminal records, whereas in other states, such as Texas, some information is openly available.

Drug Testing

Drug testing can be employed as a general background check, when substance abuse is suspected, or for liability reasons after an on-site accident. A drug test is typically carried out by a third-party agency. The main types of drug testing are urine, hair, saliva, and blood. The differences in substances detected and length of time a substance remains in the body system can be found here. In general, urine, saliva, and hair tests are used to determine a behavior of drug use whereas blood tests measure whether an employee is currently intoxicated. Each state has different regulations involving drug testing, which can be found through the Department of Labor page. In general, a prior record of drug use that cannot be currently proven is considered discrimination.