Types of Employment Background Checks

7 Types of Employment Background Checks: Why Do Employers Need to Screen Prospective Employees?

Your favorite candidate just left the interview room. You can’t wait to offer them a job. Do you go with your gut and let a couple of Google® searches tell you about the person’s background, or do you run a compliant, online background check and verify your hunches?

Even if a candidate looks perfect on paper, it’s crucial to do your due diligence to ensure that you’re hiring a good employee — gut instinct isn’t enough. Some job applicants could fabricate their credentials to help beef up their resumes; while not all candidates will be brazen enough to lie outright, their resumes may still be misleading.

Hiring the right candidate might just be the missing piece to your company's success. That said, a bad hire can have the opposite effect. The wrong pick may cost your company money and time while impacting morale among your existing team members.

Bad hires can also impact your own productivity; CFOs have been known to report that supervisors waste time managing underperforming employees.

Small business owners are often working with smaller budgets and limited resources, so it’s important to invest in the right people and strategies and make sound hiring decisions upfront.

To help reduce the risk of making a bad hire, small business owners and hiring managers should thoroughly vet prospective employees. Background checks like ShareAble® for Hires can quickly show you any red flags about candidate’s credit report and relevant criminal history.

There are different types of background screenings available, and the right one for your business depends on your industry and your organization’s needs.

Keep reading for a full overview of the benefits of employment screening, the differences between types of employment background checks, and how you can use background checks to your advantage.

Benefits of Background Checks

It costs U.S. company substantial funds and time to hire one new employee. Spending $40 to screen applicants ahead of time could protect your company from wasting time and money.

By requiring your job applicants undergo an online background check, employers and hiring managers can:

  1. Make a fully informed hiring decision: Armed with comprehensive information, you can have peace of mind that you’re making the right hire.
  2. Reduce risk in the workplace: By examining a candidate’s relevant criminal background, you may uncover a history of violence. According to the Occupational Safety and Health Administration (OSHA), “Acts of violence and other injuries is currently the third-leading cause of fatal occupational injuries in the United States.”
  3. Verify candidate claims: Background screening can be used to verify claimed identity, certifications, education, and experience.
  4. Mitigate the risk of negligent hiring claims or lawsuits: Negligent hiring claims generally occur when an employer knew (or should have known through due diligence) that an employee was a serious hiring risk. Negligent hiring claims frequently occur in certain industries and businesses: utility companies, delivery companies, hospitality businesses, nursing homes, healthcare, and real estate. Regardless of your industry, it’s in your best interest to avoid a negligent hiring claim and properly screen candidates.

Note: You must receive the candidate’s express permission before performing an employee background check to ensure Fair Credit Report Act (FCRA) compliance. ShareAble for Hires allows your candidate to give permission instantly.

7 Types of Employment Background Checks

Below are seven different types of employment background check options you can leverage to find the perfect fit for your business.

  • Identity Verification
  • Criminal Background Checks
  • Credit Background Checks
  • MVR Reports
  • Professional License & Education Background Checks
  • Fingerprint Background Checks
  • E-Verify Background Checks

7 Types of Employment Background Checks

1. Identity Verification

Identities are stolen. It’s imperative that employers and hiring managers verify that candidates are not using stolen identities when applying for jobs. Identity verification background checks enable employers to confirm that prospective hires are who they say they are.

ShareAble for Hires uses sophisticated record matching logic to match identity checks to your job applicant, resulting in fewer false-positive matches. These identity checks include verifying:

  • Name
  • Address
  • SSN
  • Date of Birth
  • SSN was reported fraudulent
  • SSN is from a deceased person
  • Initial fraud alerts are on file
  • Active duty alerts are on file

2. Criminal Background Checks

All employers should conduct a criminal background check, but it’s especially important for employers looking to fill roles that involve access to sensitive financial information, security responsibilities, and proximity to vulnerable populations, such as children or the elderly.

Most savvy employers run criminal background checks as part of their hiring process.

Performing a criminal background check online is crucial to avoid taking on unnecessary risks with a new hire. These employee background checks typically include county, state, and/or federal records of any arrests, convictions of misdemeanors and felonies, court records, warrants, sex offenses, incarceration records, acquitted charges, pending charges, and dismissed charges.

Note: States that don’t currently have online records include Delaware, Massachusetts, South Dakota, and Wyoming. And - as with any background check - a criminal background check must meet federal credit reporting regulations. Be sure to check your local laws, check your local government resources, and consult with employment counsel.

3. Credit Background Checks

Credit checks may reduce the risk of fraud and other crimes for candidates being considered for financial positions or roles that handle confidential information. A credit check would reveal any reported tax liens, debt issues, poor credit, and other money issues that suggest irresponsibility with money.

Jobs requiring a security clearance, access to finances, and sensitive data from clients and the company frequently require a credit background check. However, you may benefit from performing credit checks on all employees to filter out applicants who may be a risk to the company.

Even if you’re not hiring for a financial position, all employers should be concerned with a candidate’s financial responsibility. Issues with finances may indicate other ongoing problems or a general lack of maturity or trustworthiness.

Note: While you can use a credit check to evaluate candidates, you should give your employees a chance to explain negative credit report information.

Credit reports may include information such as:

  • Credit accounts, past and present
  • On-time or late payments
  • Debts sent to collections
  • Bankruptcies
  • Collection accounts
  • Recent employment history (but the credit report may not contain all employment history)

By getting the full picture of a candidate who will potentially handle company finances, you may be more likely to find and hire a reliable, responsible employee.

4. MVR Reports

Any employer who requires employees to drive company cars or transport clients or customers should check motor vehicle records to ensure they hire the safest, most responsible drivers. In addition, employers subject to the U.S. Department of Transportation, Federal Motor Carrier Safety Administration’s regulatory requirements should also screen MVR.

What does an MVR check show?

  • Driving history
  • License, license class, and license status
  • Endorsements
  • Past license statuses: suspensions, revocations, cancellations
  • Vehicular crimes
  • Accident report
  • DUI convictions
  • Traffic citations
  • Unpaid summons and insurance lapses

According to OSHA, the average crash costs an employer $16,500. If an employee has an on-the-job car accident causing injury, it can cost an employer around $74,000. If a death occurred during an on-the-job car accident, the employer could be liable for around $500,000 in related costs.

Cost of employee car accident

To check a candidate’s driving history, you’ll need to go through a compliant, third-party vendor. Or, you can ask the candidate to submit a copy of his or her driving record from the DMVBottom line: It pays to ensure the drivers you hire have a clean driving record.

5. Professional License & Education Background Checks

Any employer hiring for roles that require specific levels of education or licensure should run a license and education check on job applicants. Occupations that may need verification could include plumbers, professors, barbers, contractors, preschool teachers, senior roles requiring advanced degrees, and positions where education is critical to legal processes or public safety.

This education verification process involves an employer checking for a high school diploma, undergraduate, or graduate degree to cross-reference the resume information provided. Candidates may exaggerate their education, breadth of experience, job responsibilities, or even their actual job title within their resume and cover letter, so it’s a good idea to verify the information they’ve reported is true.

You can help mitigate the risk of hiring the wrong employee by using a thorough education background check to vet any new hires. Verification helps spot diplomas from diploma or degree mills.

Why should employers verify education and professional licenses? Hiring someone without the requisite skills and education may make you vulnerable to lawsuits and other problems. You can avoid this by using an education check which investigates a candidate’s:

  • Degrees
  • Academic institution
  • Years attended
  • Specific certifications
  • Specialized training

Drawbacks: Education verification is a slow process that can take weeks and employers must follow applicable laws, which may include the federal Family Educational Rights and Privacy Act (FERPA) to screen a candidate’s educational background.

6. Fingerprint Background Checks

Fingerprint data is collected and kept by the FBI in the Integrated Automated Fingerprint Identification System, which has about 70 million criminal profiles.

Gloved individual takes fingerprints of another person

Any employers who have employees dealing with security clearances or handling sensitive customer or company information should require new hires to undergo a fingerprint background check. However, if you’re looking to hire quickly, there is a timeline drawback: it can take two to four weeks to get results in the mail.

A fingerprint background check generally reveals the following information:

  • Criminal arrest dates, charges, case results
  • Basic information like birth, name, address, and employment
  • Police reports can also be linked to fingerprints including accidents, insurance information, and statements

7. E-Verify Background Checks

E-verify is an electronic system that scans information regarding an employee’s Form I-9, Employment Eligibility Verification, to verify that they are authorized to work in America.

If you participate in E-Verify, you’re likely required to post the Notice of E-Verify Participation poster available from the DHS and the Right to Work poster issued by the Department of Justice.

An e-verify background check will generally result in one of two outcomes:

  • Employment Authorized: This means that the information entered matches records in the DHS and/or SSA system. The employee is authorized to work in the U.S.
  • DHS or SSA Tentative Non-confirmation (TNC): This means the information did not match. An employee can generally contest this result. As an employer, you might be able to terminate employment if the employee doesn’t contest the result or if the employee receives a Final Non-confirmation result indicating the employee’s work authorization can’t be confirmed.

Note: A TNC result doesn’t always mean an employee isn’t authorized to work in the U.S.; it simply means the records don’t match and the employee must escalate the issue by contacting and visiting an SSA field office or contacting DHS.

Screening Can Save You

U.S. employers have reported that a bad hire was costly to their company. Before onboarding a new hire, seriously consider a background check to avoid a costly mistake.

All employers could benefit from conducting a background check on new or potential employees to avoid taking on undue risk. ShareAble for Hires offers a comprehensive, convenient approach to screening potential employees, and can provide you with a wealth of information within minutes.

With reports from Transunion, a trusted credit reporting agency with more than 40 years of experience, ShareAble for Hires provides insight into an applicant’s:

Traditional pre-employment background checks take days or weeks to get the answers you need before hiring someone. ShareAble for Hires generates reports within minutes.

Get greater insight into an applicant at hires.shareable.com

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