Pre-employment background checks have been a practice in the United States for many years, and the results can directly impact a person's employment or promotion. American employers prioritize employee screening and internal risk management, requiring background checks for nearly all job applicants, current employees, and even volunteers. Federal and state laws require pre-employment background checks for certain positions.
Most employers are willing to conduct background checks to understand a potential employee's (candidate's) past performance, behavioral traits, personality traits, and work and academic performance. However, some inquiries are not appropriate in the United States. Because the United States values fairness and equality in employment opportunities, American employers do not investigate a candidate's race, age, religion, national origin, gender, disability, pregnancy, or sexual orientation. Once a person is accused of discrimination in the United States, they can be irreversible.
However, criminal record checks, credit history checks, resume checks, and drug and alcohol testing are four areas of greatest concern to American employers.
Why do employers conduct background checks?
There are many reasons, often directly related to the position the applicant is applying for. Here are a few reasons why employers conduct audits:
- Negligent hiring lawsuits are on the rise.
If a candidate's actions harm someone, the employer may be held liable. This threat makes employers more vigilant and they need to investigate the applicant's history. A wrong decision can cause irreparable financial losses to the company, and may also have a negative impact on the company's reputation and even jeopardize the career of the HR practitioner. Employers can no longer rely solely on their own subjective judgment to identify and hire people. They need objective and fair background checks as a factual reference to assist in recruitment.
- The current situation has increased the requirements for employers to screen employees.
(1) In recent years, there have been news reports of sexual assaults and child abductions, which has led to states in the United States enacting laws requiring criminal background checks on applicants applying for work related to children.
(2) The 9/11 terrorist attacks in 2001 have made employers pay more attention to security and employee identity verification.
(3) After the Enron and other corporate scandals in 2002, senior executives of companies began to be more vigilant about the security of their careers and personal lives.
- Candidates' job applications and resumes are filled with exaggerated and false information. Many job applications and resumes contain 30-40% falsification and exaggeration, which makes employers suspicious of all resume materials submitted by applicants.
- Federal and state laws require pre-employment background checks on applicants. For example, criminal background checks are required for positions with children, the elderly, and individuals with disabilities, as well as for civil service positions.
What Background Checks Include
In the United States, pre-employment background checks cover a wide range of information, from Social Security numbers to applicants' biographical information.
This includes:
Driving records; vehicle registration; credit records;
Criminal records; Social Security numbers; educational records;
Court records; workers' compensation; bankruptcy records;
References and reference lists; neighbor interview records;
Medical records; property ownership; military service records;
State license records; drug testing records;
Previous employers; personal references;
Incarceration records; sexual assault investigations, etc.
What Background Checks Cannot Include
The federal Fair Credit Reporting Act (FCRA), a predecessor to the FACT Act, established national standards for employee checks and went into effect in April 1971.
The FCRA regulates consumer credit reporting agencies and credit report users (banks and lenders). States may have additional regulations. According to the FCRA, background check reports are called "consumer reports." Negative information in consumer credit reports can be removed from the credit reporting agency's report after a specified number of years. The following information is prohibited from appearing on the report: bankruptcies older than 10 years, tax evasion records older than 7 years, criminal prosecutions, debt collection records, and other negative credit information, excluding convictions. For more information, consult your state's department of labor or consumer rights agency.
The FCRA stipulates that consumers have the right to fully understand the evaluation and basis of any credit bureau's assessment of their creditworthiness, and they have the right to appeal false negative information. The most important regulation for consumer credit reporting agencies is the restriction on the use and dissemination of consumer credit reports. The FCRA also explicitly states that while the following information may be helpful in making a hiring decision, employers must obtain the interviewee's prior permission: educational records; military service records; and medical records. Furthermore, employers are prohibited from discussing age, marital status, and specific psychological tests during interviews.
