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How Companies Use Background Checks

It is important that the background check process is consistent, legal, and fair.

Employers often rely on background checks to verify an applicant’s personal information. Background checks can help companies ensure they are selecting the right individual for their team, but there are laws involved. Employers must understand the laws and regulations surrounding background checks, as should individuals who may fall victim to an improper background check.

What is a background check? A background check is a process used by employers or other organizations to verify an individual’s credentials, criminal record, and other personal information. It is usually done when someone applies for a job, loan, or other service that requires the applicant to provide private information.

Background checks can also be conducted on existing employees through routine screenings or random audits. The purpose of these background checks is to ensure that an individual is honest and trustworthy.

What is included in a background check? A typical background check will include a review of the applicant’s criminal record, credit information, references, employment, and education history. Depending on the type of job description or position level being applied for, additional personal information may also be included in the background check process.

What do employers look for in a background check? Employers will look for information that can give them glimpses into the applicant's character and industry experience. The background checks are utilized to ensure the candidates have a clean record and can be trusted with the duties assigned to them. Employers would be curious about the following criteria: 

  • Criminal records and any past convictions.
  • Education and employment history to verify qualifications.
  • Credit reports to check for financial responsibility.
  • References to validate the quality of work.
  • Drug tests to determine if the person is suitable for the job or not.

What are the laws and regulations surrounding background checks? The use of background checks is governed by federal and state laws. Employers must obtain permission from an applicant before conducting a background check, as well as inform them of their rights to dispute any findings. It is also illegal for employers to discriminate against applicants based on their race, national origin, religion, gender, age, or disability status.

The most important law to consider when conducting background checks is the Fair Credit Reporting Act (FCRA). This act states that employers must:

  • Provide the applicant with a clear and conspicuous notice that they will be conducting a background check.
  • Obtain written consent from the applicant before conducting a background check.
  • Inform the applicant of their rights to dispute any findings in the report.

Failure to comply with these laws can lead to penalties, so employers must take extra care to follow all regulations when conducting background checks.

How do job candidates protect themselves from improper background checks? While employers must follow the laws when performing background checks, it's important for job candidates to be aware of their rights. The best way to protect themselves from improper background checks is to stay informed and know what information can and cannot be included in a report. Candidates have the right to review their background check before it is used by an employer. If  discrepancies or errors are found in the report, the candidate can dispute them and request that the information be corrected or removed. 

What if an employer performs an improper background check? It's important to remember that employers must comply with all federal and state laws when conducting background checks. If a candidate believes, you can file a complaint with the Federal Trade Commission (FTC) or other consumer protection agencies. These agencies have the power to investigate and take action against employers who fail to comply with these laws.

If a job candidate believes that an employer has violated the laws surrounding background checks, in addition to filing a complaint, the candidate may be entitled to compensation for any damages caused by an improper background check. Consulting with an attorney can help determine the best course of action.


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Dooley Gembala

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