3 Major Considerations For Background Checks

Major Considerations For Background Checks You Should Know



How Far Back Can an Employer Look When Doing a Criminal Background Check on Me?

These are challenging times. On one hand, the entire world has seemingly come together to fight the COVID-19 pandemic crisis. On the other hand, both individual employers and corporate businesses are putting more thought into their hiring process, borne out of a need to make the right decision during tough times. And if you are a potential job candidate, this is the time to step up and become more persistent and diligent with your job hunting process.


Here, you should know that an increasing number of hiring managers turn towards pre-employment screenings, in order to confirm the authenticity of their job applicants. Here are the major considerations that govern these background checks, so they are both fair and non-discriminatory.

1.  Compliance with FCRA

There is a federal law called the Fair Credit Reporting Act (FCRA) which governs all consumer reporting. Some states have their own set of FCRA guidelines which are usually more strict based on the federal Fair Credit Reporting Act, to protect the best interests of working professionals in their particular state. Many states have simply adopted the already mandated federal guidelines. While the finer nuances may vary across states, consistent highlights of this act include:

  • Gaining a job candidate’s consent, prior to performing any type of background check. (This also holds true for existing employees).
  • Notifying a candidate or employee using the pre-adverse notification process, if the background check uncovers any dubious information that negatively impacts candidature or employment. With this, they are given time to respond to the information presented.
  • Finally, terminating candidature or employment in line with FCRA guidelines. Again, this has to be completely non-discriminatory in order to avoid legal hassles.

2.   Conduct in-house or by third-party? Restrictions on criminal background checks

Employers typically prefer to outsource criminal background checks to third-parties or expert consultants, simply because of the legal implications associated with this process. The added advantage here is that a professional screening company will also have the expertise to deliver the best results, with minimal impact on cost and timelines. However, there is a trade-off, as many US states impose time restraints on reporting a third-party’s background information.

For instance, consider the grand state of Texas, with its rolling hills and thriving ranch-based operations. Here, if a company were to conduct a pre-employment screening in the house, there is almost no limit on using the information uncovered. On the other hand, a third-party company may discover the same information but is legally bound from reporting it due to FCRA guidelines.

This is especially true for all criminal convictions that have been closed for over 7 years (through payroll, disposition, or release). Fortunately, these guidelines are circumvented for job roles that are marked for an annual salary of $75,000 and above.

3.   The validity of checks based on credit, accounting, and tax information

Until a decade ago, credit checks were considered mandatory for finance-based roles. They were also taken equally seriously by potential employers. However, given the current economy and time restraints on credit, accounting, and tax information uncovered during screenings, employers may no longer decide to terminate candidature or employment solely based on these checks.

For instance, the following time constraints apply with respect to finance based information reporting.

  • A bankruptcy can only be reported within the first 10 years of settlement.
  • A tax based conviction (or a tax lien) can only be reported within 7 years of closure. Similar limitations apply for collections and other civil suits.

Again, the above constraints can be circumvented for job roles with an annual salary of $75,000 and above. Hence, all these factors come into play when an employer considers in-house screening over third-party experts.


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