What Is a Criminal Background Check?

Conducting background checks helps companies avoid dangerous, fraudulent and reckless behavior from job candidates and employees. Background checks are a common part of the recruitment process, verifying a job candidate's identity and credentials, and flagging any concerning or criminal history. If you are a small business owner considering hiring new employees, you should run background checks on candidates to ensure you are only bringing on qualified professionals.

What is a criminal background check?

Criminal background checks are primarily completed after a preliminary job offer has been extended, but before the candidate begins work. Employers run background checks on job candidates to ensure that there are no red flags and to determine the validity of the information the candidate provided in their application and throughout the interviewing process.

Although employers conduct background checks for many reasons, the data shows that an overwhelming percentage of employers conduct them. In 2018, the Professional Background Screening Association (known then as the National Association of Background Screeners) reported that 95% of surveyed employers used one or more types of employment background screening. The same report shows that employers conduct checks periodically throughout the employee's time at the company.

Editor's note: Looking for the right background check service for your business? Fill out the below questionnaire to have our vendor partners contact you about your needs.

Why employers conduct criminal background checks

Although the motivations vary, there are some common reasons why employers conduct checks on potential and current employees. For one thing, the number of Americans with criminal records has reached nearly one-third of the U.S. population. Although criminal background checks are easy, cost-effective, and fairly quick to process (typically three to five business days, depending on the number of states the subject has lived in), some employers have chosen to skip this step in either their pre-employment or subsequent employee management process.

With those few exceptions, however, most employers nowadays utilize background checks as a standard step in at least their pre-employment process. According to the Society for Human Resource Management, these are some of the most common reasons for conducting background checks:

• To protect employees, customers and the company. One of the most common reasons to conduct background checks is to protect the company's people and resources. No one wants to hire a new employee who has a history of violence or nefarious activity. 

• To improve or ensure quality of hire. Ensuring that the candidate has provided accurate and quality information throughout the hiring process helps measure the person you are about to hire. 

• Because it's mandated by law or industry regulations. In some cases, employers are required by law or industry stipulations to conduct a background check on a candidate prior to employment. This may apply to jobs in healthcare, education, law, financial services, and other jobs that involve privileged access to sensitive information, money, or children. 

• To protect company reputation. There is nothing more valuable than a company's reputation or brand. Background checks help ensure that anyone who joins your company will represent it well, not tarnish its reputation. 

• To prevent and/or reduce theft, embezzlement and other criminal activity. No employer wants anyone who has a history of stealing anything or leaking data to enter their business, especially not as a member of the company. 

What data is in background checks?

There are many types of data that make up most background checks. Typically, the same information is present on most background checks. For example, here are the most common data points in pre-employment and/or general employment background checks:

• Full legal name (and previous aliases or last names)
• Social Security number
• Date of birth
• Criminal conviction record
• Previous addresses

Note that if you run a background check on a subject who has lived in other countries or is working in another country, there will be additional rules, regulations, and stipulations. Most notably, the U.K. and parts of Europe are now strictly governed by a privacy data law known as the General Data Protection Regulation (GDPR) guidelines, which apply to all background checks affecting European Union citizens.

Most common background checks

How far back background checks go depend on the type of background check and the state where they're being conducted. We have outlined the primary types of checks in this table to lay out the timeframe and related exceptions.  

There is a school of thought referred to as the "7-year lookback rule." Some states have taken a hard stance on limiting employers' views of criminal convictions from more than seven years ago. Although credit checks, governed under the Fair Credit Reporting Act, allow creditors to look further back in some cases, there is a growing push to limit the criminal records employers can check to the past seven years. Though the exact laws on this vary from state to state, they fall under the umbrella of the "Ban the Box" movement.

How long do criminal background checks take?

Although many background checks can be processed and return results in three to five days, some can take longer. For example, FBI checks usually take around 30 days to complete. Although some federal background checks can be processed more quickly, it is best to plan for the comprehensive review that requires the 30-day wait.

Another delay in processing background checks, either for pre-employment purposes or for current employees, has to do with the number of states where the subject has lived. The more states, the more databases to query, and the longer it can take to compile the necessary data. This is the most common delay in background checks.

Also, some background checks require several different data points (e.g., criminal background and credit checks). The more requests you place within a single background check, the longer the process might take.

Benefits of criminal background checks for employment

One of the tried-and-true ways to predict a person's future performance is to review their history. While it won't give you a complete picture, it will give you a sense of their overall decision-making ability and behavior. These are some of the most valuable reasons to conduct background checks:

• Hiring the best candidates. One way to determine who is the most qualified for a job is to first determine who is the most reliable. For that information, we turn to background checks. Although there are always exceptions, your top talent typically won't have troublesome background concerns trailing them. 

• Keeping your workplace safe. You need to make sure you're not letting people with a violent history into your business every day. Maintaining workplace safety and reducing possibilities for injury or property damage are not only common reasons for background checks, but necessities that can bite you in the back in the form of lawsuits and court cases if you don't do your due diligence. 

• Protecting your company reputation. Again, a strong brand reputation is essential. Even though it can take years to build a great company reputation, it is easy to lose overnight if organizational leaders are not doing their jobs. Part of your job as an employer is to use the tools available to you, including background checks, to avoid hiring the wrong people who will reflect poorly on your company. 

• Reducing costs related to employee management. Although some employers might be concerned about employee theft, there are other ways hiring the wrong person can cost your business. Hiring someone with a criminal history could increase your insurance premiums, employee absenteeism and turnover, employee compensation, and other work-related claims. 

• Complying with work rules and laws. Some industries or jobs require certain background checks to ensure safety and regulatory compliance. Police officers and healthcare professionals are examples of jobs that require specific background checks. 

• Avoiding negligent hiring and retention practices. The human resources field recognizes both "negligent hiring" (hiring someone you should have known not to hire) and "negligent retention" (retaining the employment of someone you should have released from your organization). These terms are commonly related to lawsuits due to damages or some harm to employees or customers.

How to conduct a criminal background check

First, you need to establish the steps that your company should follow for background checks on job candidates or current employees. We highly recommend you create and maintain a criminal background check policy that lives in your employee handbook. You can find extensive templates online, but your company policy for criminal background checks should at least include these steps:

1. Get the subject's acknowledgment. Inform the subject that you intend to process a background check and have them sign a release. Never move forward with the background check before you have the subject's signature. Spoken approval is not adequate acknowledgment; you need it in writing.

2. Stick to the agreed-on scope. Ensure that the background check matches the details and description of the background on the release that the subject signed. Do not extend beyond this established scope.

3. Contact your third-party partner. Third-party background check companies are the way to go, and the internet is replete with good options. Although we do not offer specific company recommendations in this article, we do recommend partnering with a company that has solid ratings and has been in business for a long time. We do not recommend visiting all the federal, state and industry-specific websites required to run a thorough check; let an expert third party manage this action for you. 

4. Review the record. Once the check is complete, the background check company will either email the results to you or share them with you on a secure server. Review the content for any surprises or concerns. 

5. Inform the subject of findings (with a copy of the report, if necessary). If you have no concerns and nothing to discuss, you are free to proceed with the hiring process. However, if there are items of concern on the report, especially ones that would warrant a candidate's elimination from an employment opportunity or a current employee's dismissal, then the law entitles the subject to receive a paper or electronic copy of the entire background check. 

6. Include all related data in your recruitment file. Regardless of the background review's findings or whether or not you hire the candidate in question, you need to keep a record of it or the review itself in the recruitment and/or personnel file. If your company maintains a "supervisor" employee filing system, then it should be retained in the HR-only file.

What are red flags on a background check?

In a criminal background check, employers typically want to consider convictions, not arrests or other charges. An arrest does not mean someone was convicted of a crime. Convictions, cases in which the accused was found guilty, are the primary concern of a criminal background check.

Here some common red flags that warrant, at the least, discussion with the subject and, at worse, removal from consideration for the job:

• Convictions that the subject did not share previously. This might go without saying, but if convictions that the subject did not previously disclose show up on the review, then removing the subject from all employment opportunities at your company is the right move. 
  
  
• Lack of evidence relating to certification, license or any other education. If you are unable to confirm any certification, license, or degree that the candidate claimed to have on their resume, in their cover letter, or during their interview (whether the job requires that credential or not), you need to discuss it with them to find out why.
  
  
• General discrepancies. If a subject left out states they've lived in or misrepresented durations of time, employers they've worked for, or some other details, you should follow up with them about it. If a candidate is vague on facts and details during the application and interview process, you may wonder what working with them will be like in general.
  
  
• Multiple bankruptcies or other financial concerns. Low credit scores do not automatically reflect a poor job candidate, nor do other aspects of a credit report's findings. As the employer, you won't see the subject's credit score anyway, but you might see other signs of financial distress (e.g., making late payments or utilizing a lot of credit). We recommend two things here: First, never pass on a great candidate if all you have against them is a record of late payments on a credit report. Second, we only recommend conducting financial background checks (e.g., credit checks) for finance-related positions, such as CFOs, accountants, and bookkeepers. Credit reviews are not necessary for many other roles. 

Background checks help business owners and hiring managers confirm that their selected candidates are trustworthy and high-quality choices for the job. Nowadays, there is little reason not to complete pre-employment background checks on your chosen candidates. This extra step in your hiring process is likely to prove valuable as you build your team for the future.