Hiring the right individual can be a complex process. Although there can be tests and verification modes for the work that they do, how do you find out if they are truly good people?

One way is to conduct a comprehensive background check to ensure that all the basic legal boxes are ticked. Find out more about how to conduct a US Employment Background Check and what laws you must comply with.

What is an Employee Background Check?

An employee background check, also known as a pre-employment screening, is a process where an employer checks to ensure that a person is who they claim to be. It provides an employer with the opportunity to check an employee’s criminal record, employment history, education, and any other relevant activities. Employee background checks are a standard within the US, with 96% of employers using it as a method to affirm identity.

Why would an HR want a Pre-Employment Screening?

Top Reasons to Conduct Background Checks

There are various reasons why an employer would want to carry out a pre-employment screening. In this section, the key reasons for requiring an employee background check will be outlined.

Candidates Lie in Their Resume

The Society of Human Resources Management conducted a study that determined that over 50% of people have inaccuracies in their resumes and applications. As such it is vital that employers do the relevant checks, such as employment history checks, to verify the content an employee puts on their applications. Employers should also consider that some employees would do everything that they can to secure a job, and this may lead them to be misleading on their CV. 

Candidates Lying on Resumes

Check for Criminal Record and other Job-Sensitive Information

The purpose of this background check is not to give employers the opportunity to discriminate against their employees, instead, it is to ensure that an employee’s past crimes are not significant enough to lead to any problems in the future.

Criminal Record Check for US Employment

To Keep Employees, Customers and Business Safe

Employers can be held accountable for incidents that arise in the workplace. Some applicants may pose a potential threat to other employees and customers based on their criminal backgrounds, such as violent criminals or serial sex offenders. As such, it is important that employers conduct a background check to ensure that the people coming to work at their business do not put their staff, customers, or business in danger.

Other forms of conduct that an employer may want to protect people from include:

  • Negligent Driving in Public 
  • Reputational Losses 
  • Any Financial Losses

Employers may also be subject to negligent hiring claims, a good defense to show that an employer took due care during the hiring process, would be a well-conducted and thorough employee background check.

Keep the Workplace Drug Free Environment

Knowing whether a candidate has past drug charges can be useful to an employer that wants to have a drug-free working environment. Doing pre-employment drug tests can help employers eliminate candidates from the applicant pool.

Maximize Productivity

Employers are looking to hire the best employees, as such, they need to be sure that the information they are basing their decisions on, is accurate.

What Types of Employee Background Checks Should Be Conducted?

There are 11 pre-employment screening tests that should be conducted, and they are as follows:

Criminal History Check

A criminal history check assists an employer in knowing the criminal background of a potential employee. The purpose of these checks is mainly to determine whether a potential employee could pose a threat to customers, other employees, or the business. A criminal history check typically involves an employer checking the following records:

  • National Criminal Databases 
  • Federal and State Criminal Records 
  • County Criminal Courts
  • Sex Offender Registries 
  • Domestic and Global Terrorists Watch Group

The different states have different variations of criminal history checks, such as national fingerprint-based checks or name-based checks. Employers should consult a local lawyer prior to conducting a criminal background check to ascertain what type of check they can run. 

Prior Employment Verification

A prior employment verification, or employment history check, is one of the most important tests that an employer can run. Employers choose applicants based on their ability to execute specific tasks. Therefore, it is crucial for employers to ensure that the experience applicants claim to have, is accurate. The employment history check helps employers ensure the validity of the following information:

  • Start and end dates of employment 
  • Salary 
  • Titles and Position Held by applicant  
  • Reasons why the employment was terminated
  • Job role, description, and duties 

Education Verification

It is known that attending university and graduating are two different things. The purpose of education verification is to confirm that an applicant does in fact have the qualifications specified in their application. It is also important that an employer confirm where an applicant received their qualification from. Further, the Fair Labor Standards Act (FLSA) highlights that some roles require employees to have special qualifications. Doing an appropriate educational background check can help ensure that a worker meets such a requirement. 

Sexual Offender Registry Check

It is important that employers check the Sex Offender Registry for potential employees. This is especially important for employers that work with daycares, in education, or with minors in general. If this is not appropriately executed, an employer could face a negligent hiring lawsuit. 

Reference Check

An employment reference check assists employers in knowing what an employee is like in a workplace. As such, it is common practice for employees to request a reference from their applicants. It can also help employers know how the employee performs in the workplace and verify information provided in applications or at interviews. 

Drug Screening

It is crucial in certain industries or roles for employees to be drug-free, such as driving. Some employers, in general, may want a drug-free working environment. As such, it is important that employers carry out a drug and alcohol test as well to determine whether an employee has any illegal drugs or alcohol in their system. They also ensure that an employee can be trusted to work appropriately and perform well for their employer. A drug and alcohol screening requires the permission of the individual in question as well as prior notice. 

Credit Background Checks

A credit background check evaluates an applicant’s credit history. The report typically comes from three of the largest credit agencies, Equifax, Experian, and TransUnion. These reports can be conducted for free once a year by law, although some cities such as Chicago and New York have made it illegal to base employment decisions on this basis. As such, it is important that employers consult a local lawyer before conducting this check. These tests can also only be carried out with the permission of the relevant individual. In an industry or role that requires an employee to be fiscally responsible, such as jobs relating to money and finance, this can be a crucial tool for determining a candidate’s suitability. 

Professional License and Certificate Confirmation

Confirming a Professional License or Certificate helps confirm professional credentials. Applicants are hoping to get a job, as such some may embellish their accomplishments in order to gain a position. If an employer does not carry out appropriate tests they may end up employing someone who is unqualified for the relevant job.

Social Security Number Trace

Social Security Number helps confirm the identity of an applicant. Tracing a candidate’s Social Security Number can assist in confirming that the candidate is who they claim to be, as well as help determine whether they are eligible to work in the United States. Employers can do this by matching information in their I-9 to the Department of Homeland Security and Social Security Administration’s record.

Social Media and Internet Check

Social Media and Internet Checks help an employer learn more about their applicants. Employers must take note that as the information is unverified, there may still be room for it to be misleading. That said this check is still recommended as it can be additional confirmation that a candidate is suitable for a particular role.

Driving Record

A Driving record check can be conducted with the permission of the applicant. This check proves that an applicant has a safe driving history. The driving record check includes the following evaluations:

  • Driving Record Points 
  • Traffic Accidents 
  • Public DUI’s
  • The applicant’s current Driving Status
  • Any other traffic law convictions, violations, and fines.

Employers will need an applicant’s full name (needs to be the same as the name on license), date of birth, address, driver’s license number, social security number, state of issue, and the candidate’s express permission in a signed document that complies with the Fair Credit Reporting Act. 

Driving Background Check

When Can an Employee Background Check Be Conducted? 

Generally, employers are able to conduct employee background checks at any time as far as they have permission from the applicant or employee to do so. Some employers choose to conduct checks when considering the following:


If an employee will be undertaking different responsibilities


Where employers are considering keeping an employee on at their company 


If a promotion may involve new responsibilities for the employee 

Workplace Accidents

Purpose of this is to clear up any potential issues with insurance companies or legal teams

Are Employee Background Checks Legal? 

Although employee background checks are legal, there are laws that need to be complied with when employers are conducting their pre-employment screenings. Laws that must be complied with include, laws on discrimination based on race, national origin, religion, color, or sex; genetic information; disability; and age (40 or older). The Equal Employment Opportunity Commission (hereafter EEOC) is the regulatory body that enforces these laws. 

Employers also need to comply with the Fair Credit Reporting Act (hereafter FCRA) which is enforced by the Federal Trade Commission (FTC). Employers should note that the information below is general, it is good practice to consult a local lawyer prior to carrying out any employment checks.


Initial Considerations Before Conducting a Pre-Employment Screening

Employers must ensure that they treat all applicants equally as it is illegal to choose to conduct an employee screening on the basis of an individual’s race, color, religion, sex, national origin, genetic information (including family medical history), disability, or age (40 or older).


  1. Only conducting employment history checks on applicants from one particular race.
  2. Conducting employee screenings on only female applicants 

The general rule is that employers cannot require applicants or employees to provide their genetic information or family medical history. Further, even if an employer has that information they cannot use it to make employment decisions. Employers may only ask medical questions when they have objective evidence that an employee is unable to do a job because of a medical condition, or if they pose a safety risk because of a medical condition. 

Using Employee Background Information 

No employee background check can be used to discriminate as this would be in violation of federal law. As such employers have to:

  • Apply the Same Standard to Everyone
    • Employers cannot discriminate against individuals based on their race, color, religion, sex, national origin, genetic information (including family medical history), disability, or age (40 or older).
    • For example, an employer cannot do the following:
      • A pre-employment screening reveals applicants A, B, C, D have problem X
      • An employee screening of applicants E, F, G, H also reveals that they all have the same problem X
      • Applicants A, B, C, D, E, F, G, H have the same or similar qualifications and the only issue with their applications is problem X
      • A, B, C, and D are all from one race and ethnic group
      • Applicants E, F, G, and H are from different races and ethnic background to A, B, C, D
      • Employer rejects E, F, G, and H on the basis that they have problem X
    • The employer in the above example would have breached anti-discrimination law if by rejected applicants E, F, G, H due to them have problem X. The employer should have rejected all the applicants or accepted them to avoid breaching federal law. 
  • Be cautious and take special care when employment decisions are based on background problems that may be more common among protected characteristics
    • For example, an employer should not use a practice or policy that discriminates against people with particular criminal records, if such a practice or policy would substantially disadvantage individuals of a specific race. 
  • Be ready to make exceptions where background check problems were due to a disability.
    • For example, if an employer is going to reject an applicant based on a problem caused by their disability, they should give the individual the opportunity to display their ability to do the relevant job, in spite of the negative employee background check. 
    • Employers will not have to do this if it would cause significant operational or financial issues. 

Disposing of Employee Background Information 

Any and all employee records that an employer keeps (this includes all application forms regardless of whether the application was successful), must be retained for one year following the date they were made, or after employment action was taken, whatever date is later. Federal contractors, educational institutions, state and local governments must keep these documents for two years. 

If an employee or applicant files a lawsuit based on discrimination, this information must be retained and maintained until the case is closed. 


Initial Considerations Before Conducting a Pre-Employment Screening

The FCRA requires some additional procedures where an employer gains background information from an employment background check company. Those requirements are as follows: 

  • Inform applicant or employee that the information collected will be used to make decisions about their employment 
    • This must be in a stand-alone format and in writing
    • This notice cannot be included in an employment application 
    • Employers can include minor additions information within the note as long as it does not confuse, substantially alter, or detract from the notice
  • If you ask for an “investigative report”, applicant or employee has to be aware that they have a right to details of the evaluation
    • An investigative report is an evaluation based on a person’s character, lifestyle and general reputation, you have to tell the applicant or employee that they have a right to a description of the scope and nature of the investigation 
  • Written consent is obtained from the applicant or employee
    • You have to get permission to conduct a pre-employment screening
    • This can be included in the document notifying a person that you are getting a report
    • If you want to be able to conduct a background check throughout a person’s employment, you have to clearly indicate this as well 
  • Notify the background check company you are getting the report from that you: 
    • Informed the applicant of this employee check and got their permission to execute it 
    • Complied with FCRA requirements in their entirety 
    • Will not discriminate against applicant or employees, neither will you inappropriately use the information nor violate federal or state equal opportunity laws or regulations

Using Employee Background Information 

The FCRA requires some additional procedures where an employer gains background information from an employment background check company. Those requirements are as follows:

  • Prior to making a detrimental employment decision, applicants or employees must be given:
    • Notice, including a copy of the report, used to make the decision 
    • a copy of “A Summary of Your Right Under the Fair Credit Reporting Act”, this document should have been given by the employment background check company that conducted the evaluation
  • After making a detrimental employment decision, applicants or employees must be told:
    • that they were rejected because of information from the pre-employment screening 
    • the name, address, and phone number of the employment background check company that provided the report 
    • that the employment background check company are not included in the hiring decision process and cannot give any reason for the decision 
    • that they have a right to challenge the completeness or accuracy of the pre-employment screening and that they can obtain an additional free report from the employee background check company within 60 days

Disposing of Employee Background Information 

Once all relevant record-keeping requirements are met, employers may dispose of any employee background information they have received. The law requires that employers must dispose of this information in a secure manner. Secure methods include:

  • Burning 
  • Shredding paper documents 
  • Pulverizing 
  • Disposing of electronic information in a way that does not allow it to be read or reconstructed

Also see this link, for additional information on this matter. 

Additional Resources for US Employee Background Check

For guidance on selecting an employee background screening company please click here. It will take you to the National Association of Professional Background Screeners (NAPBS) website, where you can view the trusted pre-employment screening firms. 

If you’re looking to conduct background checks for MNCs, read our guide for Background Checks in Australia.