Other Than Credit Reports, What Else Can a Prospective Employer Screen?

What is involved in an employment background check? It really depends upon the position and the responsibilities. There are different requirements for handling money, working with children, government jobs, security clearance and job responsibility.

Why do companies conduct background checks?  Companies are responsible for their employees’ actions and want to keep the general public, employees and their customers safe. They want to ensure that their future employees meet their requirements and they didn’t lie on their application about education, past employers and criminal background.  As long as employers are liable for their employee’s actions, background checks will be a reality.

The common background checks are:

• Social security number search – This is to check the number for accuracy and for fraudulent purposes.
• Employment verification – Verifies employment for the last seven years.
• County criminal record checks –  Checks where lived, worked or attended school in  the past seven years
• Education verification -Includes education after high school. Under Federal Law, schools cannot release student information without authorization of the adult age student or parent.
• Address verification – The last addresses are verified.
• Credit report – The employment version of credit report that excludes account numbers and date of birth.

Other items that can be included are: federal criminal court records, civil court records, liens and judgments, motor vehicle driving records (MVRs), sex offender lists, and professional license verification.  Drug screening can also be conducted and a physical, depending on the job.  Companies can also ask you to take a personality test to determine if your personality and attitudes will mesh well with their workforce.

Companies hiring employees to handle money will probably require a credit report. Those hiring people to work with children, elderly, special needs or disabled will require a sex offender and criminal record checks.

A background check is called a “consumer report” under the Fair Credit Reporting Act (FCRA).  Credit reporting companies are usually hired to conduct the background checks. The employer must have written authorization in order to conduct a background check. This authorization has to be a document separate from the employment application.

The FCRA applies to jobs under an annual salary of $75,000 annually and if the investigation is done by a consumer reporting agency and not the company. Under the FCRA, the following cannot be included on the background check.

• Bankruptcies after 10 years.
• Civil suits, civil judgments, and records of arrest, from date of entry, after seven years.
• Paid tax liens and accounts placed for collections after seven years.
• Any other negative information (except criminal convictions) after seven years.

Under the FCRA, if the employer denies you employment because of the consumer report/background check, the employer must inform you of this prior to taking adverse action, which is a “pre-adverse action” disclosure. This includes a copy of the report and explanation of your consumer rights under the FCRA.  After the adverse action is taken, you are notified in writing of the name, address and phone number of the employment screening company and how to dispute the report. The consumer credit reporting agency has 30 days to respond.

John Ulzheimer is the President of Consumer Education at SmartCredit.com, the credit blogger for Mint.com, and a Contributor for the National Foundation for Credit Counseling.  He is an expert on credit reporting, credit scoring and identity theft. Formerly of FICO, Equifax and Credit.com, John is the only recognized credit expert who actually comes from the credit industry.  Follow him on Twitter here.

Categorised in: Employment, Money & Identity, Uncategorized

This post was written by John Ulzheimer