Why are background checks for new employees so important?

One of the most important parts of the hiring process is the background check. A properly run background check gives you important information about a candidate and can help reduce some of your worry in the decision-making process. Why don’t more companies run background screenings? Most employers don’t pre-screen on their own because they don’t have the time, resources, or simply don’t know how.

One way to overcome those obstacles is to outsource the process. Outsourcing background checks to a Professional Employer Organization (PEO) provides your business with a more efficient, accurate, and legal process. Employee background check services by PEOs increase the likelihood that the screening will be performed with integrity and without bias and improves employee retention rates.

Employee Background Check Services By PEOs

There are many types of checks conducted by PEOs, which are based on your industry and the positions for which you’re hiring. Some of the more common types of employee background check services include:

  • Employment History
  • Education History
  • Criminal Record
  • Professional Verification
  • Consumer Credit Reports
  • Driving Record
  • Social Security Validation
  • Healthcare Sanctions
  • Personal References
  • Specific Industry Mandates
  • Drug Screening
  • Citizenship or Visa
  • Social Media

Why Employee Background Checks Are Important

Background checks can be a quick and easy way to improve the chances of making a great hire the first time. They also help employers gather concrete data when the hiring process is highly competitive.

Here are more benefits of employee background checks:

  • Avoid Bad Hires: Hiring the wrong person can be a huge waste of your time and money. Having to repeat the process can be bad for a company’s bottom line.
  • Ensure Workplace Safety: Employers have to ensure the safety and wellbeing of all their workers and customers. Background checks can help an employer avoid harm or legal liability. In the event of legal claims related to workplace violence, sexual harassment, sexual assault, or negligent driving, a multilevel background search can be powerful evidence that you were careful when hiring.
  • Maximize Productivity: A candidate’s past performance can say a lot about productivity, job skills, professionalism, and communication skills. The screening process can help distinguish a mere poser from a true high flier.
  • Reduce Legal Issues: Failing to vet new hires can increase your company’s exposure to legal claims if there’s an incident involving an employee with a criminal history. With a background check, you can verify data and avoid hiring candidates with a questionable past.

How PEOs Conduct Employee Background Check Services

Here are the basic steps PEOs follow to get background reports in a legal, fair, and consistent way.

Making a Contingent Job Offer

Because of ban the box laws, your PEO will only conduct the background check after you’ve extended a job offer. In some states, you’re prohibited from asking an applicant’s criminal history during an interview or prior to an offer of employment. So, you need to make a conditional offer of employment before ordering the background check.

Notifying the Applicants

To make sure you comply with the Fair Credit Reporting Act (FCRA), you have to notify applicants if your company is going to conduct a background check. A PEO will help you draft an email and send it to each candidate, highlighting all the areas you’ll be checking. Also, your PEO will provide an attached document for the candidate to sign electronically and confirm their consent to the background checks.

Complying with Related Laws and Regulations

State and federal laws may restrict the information employers can collect and use in an employment decision. The complex nature of these laws makes it difficult for anyone except experts to get the background screening process right. A PEO has the expertise and resources that a small or medium-sized business owner may not have. They have experience and extensive knowledge of laws related to employee background checks, ensuring compliance, and saving you time.

A PEO will conduct a background check in compliance with:

  • Ban the Box Law: This one addresses when and if criminal history questions may be asked, what type of convictions can be asked about, and what exceptions apply.
  • Fair Credit Reporting Act (FCRA): Regulates the use of investigative consumer reports and consumer credit reports when a background check is conducted by the employer or a third-party hired by the employer.
  • Equal Employment Opportunity Commission (EEOC): The EEOC has held that an employer should not deny a candidate employment based on arrests alone. But that doesn’t mean that you can hire someone with multiple arrests or a conviction. Your PEO will know and discuss with you what records disqualify a candidate from employment.
  • Immigration Reform and Control Act of 1986 (IRCA): Prohibits discrimination based on citizenship or national origin, except for undocumented immigrants.

A PEO will conduct your employee background checks in a legal, respectful manner to avoid costly lawsuits or penalties.

Focusing on the Job Duties

The main purpose of performing a background check is to help you decide whether a candidate has the skills, education, or experience to perform duties for the position you are hiring for. A PEO will limit checks to current or future job functions and avoid searching for unnecessary information.

For example, if the job position involves money-handling or access to corporate assets, the PEO will check financial information to determine how responsible the candidates is with money. Otherwise, they won’t go after financial background information.

Reviewing the Findings and Making the Decision

While a PEO will assist you with the process of screening, you are in control of all hiring decisions. Your PEO will submit the reports for you to review and consider.

Sometimes, the results may leave you with a legal obligation not to hire an individual. In other cases, you can choose to overlook some negative information if you believe a candidate is right for the job. If the background check does not reveal any red flags, that’s a good thing.

Before making a bad employment decision, you should review the results with your PEO. A leading PEO has the knowledge, experience, and the right processes to make sure that the report is accurate and complies with applicable laws.

If you see something you don’t like in a report and decide to withdraw a job offer based on it, your PEO will help you send a copy of the report to the applicant along with a pre-adverse action letter. You should give the applicant an opportunity to respond or dispute the information found in the report.

Protect Your Business With Comprehensive Employee Background Check Services

Vested HR provides business owners with a broad range of employee background check services. The right mix of services makes all the difference, which is why we work with you to create a custom program that meets your specific needs.

By working with our team, your company can minimize delays and costs associated with background screening, while ensuring the highest standards for your hiring processes. Let us handle the long, detailed process so you can focus on core business tasks. Contact us today to request a consultation on our employee background check services.