A Small Business Guide to Background Checks

Small business just like any other employer needs to conduct thorough background checks for its employees.

The main objective of a background check is to review or examine the criminal or driving records of a candidate. The review is also meant to determine if the candidate is registered as a sex offender or on a terror watch list.

Considering the fact that you have invested a lot in your business, it is important to ensure that you hire the right people to work for you.

Failure to conduct proper background checks will not only put your business at risk of financial loss but also put you in trouble with the law. 

Below are some of the things to do before conducting a background check:

Have a strong and consistent policy

No matter how small your business is, it is important to have a clear policy that shows steps applicants should complete. Incomplete, biased, or unclear background verification checks can be a recipe for trouble in the future. For example, applying checks on applicants from certain backgrounds.

Seek legal advice

Background checks often involve giving sensitive information. This can be a challenge in some states that restrict the provision of such information to employers. As such, you should get a lawyer to guide you on how to go about such information.

Give applicants an opportunity to clarify misunderstandings or mistakes

There’s a possibility to get incorrect information during background checks. The best way to deal with this is to allow candidates to review their information. This will help to verify if all the information they provided is correct.

Work with background check companies that are compliant with FCRA regulations

The Fair Credit Reporting Act (FCRA) has guidelines on what you can and can’t do with regards to credit information during background checks.

Almost all background checks are managed by the FCRA. However, it is important to note that there are several other laws that go hand in hand with them.

While some states allow the use of background checks on any employee, others allow them only to a select group.

Avoid asking information regarding the character of an employee when reviewing their past employment record

The moment you ask for an opinion or question concerning attitude or character, it is considered an investigation on consumer reports which falls under the federal law. Normally, you are supposed to give an applicant notice before asking for such information.

Basics of a background check

There are several basic things that every small business should consider when conducting background checks to their candidates. They include the following:

1.    Criminal record

This comprises any criminal information of the candidate. It contains details on any past arrests, warrants, charges, or criminal court judgments. Although, according to an expungement lawyer, it won’t be able to include expunged or sealed records that are legally considered to no longer exist. This background check is particularly important for positions in your business such as accounting or security.

2.    Address history

It is important to trace both the current and previous address of the applicant. Knowing where an applicant previously lived will make it easy to verify other information. Such information can also be used to know areas where checks on the criminal background should be done.

3.    Validation of social security

You should also make sure that the social security number of the applicant is valid and brings up all the names, dates of birth, and address history related to the social security number.

This information will enable you to determine whether the applicant has stayed in other undisclosed places and can help reveal criminal record information.

4.    Sex offender registry

This background check is crucial for job positions that require trust.

5.    U.S. terror watch list

This background check includes reviewing an applicant’s information to know if they are listed as terror suspects or not. It is important when it comes to security positions in your business.

In general, a background check is just part of the bigger plan or strategy of your business. Ensure it is conducted properly and in accordance with the law.

Brett Sartorial

Brett is a business journalist with a focus on corporate strategy and leadership. With over 15 years of experience covering the corporate world, Brett has a reputation for being a knowledgeable, analytical and insightful journalist. He has a deep understanding of the business strategies and leadership principles that drive the world's most successful companies, and is able to explain them in a clear and compelling way. Throughout his career, Brett has interviewed some of the most influential business leaders and has covered major business events such as the World Economic Forum and the Davos. He is also a regular contributor to leading business publications and has won several awards for his work.