Employment background checks: Know your rights

You’re likely to face a background check on your job search, but there are limits, and you have some options.

As a job seeker, what are the chances that potential employers will run background checks on you?

Excellent. Ninety-six percent of human-resources professionals claim their organizations perform background checks on potential employees and new hires, according to a recent poll by the Society for Human Resources Management (SHRM).

What are they looking for? One-third of U.S. employers now use credit checks to screen applicants, according to a survey by the Los Angeles Times. Others verify claims made on your resume and in the job interview. Some look at criminal records, news reports, even sex-offender status.

As a job seeker, what should you know about background checks, and how can you prepare yourself to face one?

Permission granted

The first thing to know about background checks is that they can’t be done without your permission. Employers are required to inform job seekers that they intend to perform a background check and receive written permission from the job seeker, according to the Privacy Rights Clearinghouse, a nonprofit consumer information and advocacy organization.

If an employer chooses not to hire an applicant because of information gleaned from a background check, they’re required to notify the job seeker and provide the name of the company that prepared the report; the law includes a loophole for companies who run background checks themselves.

Job seekers are also entitled to receive a free copy of such reports from the company that prepared them. The same holds true not only for job seekers but also for background checks run on current employees.

What an employer can and cannot check

The Fair Credit Reporting Act (PDF) (15 USC §1681 et seq.) sets a national standard for employers to follow when conducting a background check on an applicant or employee. It allows employers to use negative background reports to decide against hiring candidates.

Background checks may consist of a mere credit check or can legally extend to criminal histories; driving records; and/or interviews with neighbors, friends and associates.

According to the Privacy Rights Clearinghouse, the following information is off-limits to employers conducting background checks:

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

Criminal convictions and anything in the public domain, i.e. reported in the media is fair game.

What happens if a background check turns up erroneous information?

Recruiters tell Ladders they try not to assume that negative results pulled up on Google, for example, are true without a deeper investigation. Instead, they’ll consult with job candidates to determine whether the negative findings are accurate. But Google searches and even professional background checks can return false positives, and the results are enough to disqualify you from a job, according to FCRA regulations.

The Privacy Rights Clearinghouse has learned of multiple cases in which individuals remain unemployed for years, unaware that wrongful criminal records resulting from identity theft were the reason employers weren’t hiring them.

The Privacy Rights Clearinghouse is compiling reports of those who’ve recently been denied employment due to erroneous employment background checks; those who suspect or know this to be their situation are asked to contact the PRC.

Forewarned is forearmed

Wrongful criminal records and credit smears stemming from identity theft are notoriously hard to clear up. So can honest blemishes on your record, such as a high-profile failure at a past employer, a bad credit history or a family member’s arrest. But you can get ahead of bad background checks by performing one on yourself. By investigating himself, a job seeker can find and address any erroneous information that might be associated with his paper trail, or at least be prepared to face questions on correct, but negative, results employers might find.

Start with credit reports. The FCRA guarantees individuals once-yearly access to a free credit report from each of the three nationwide reporting agencies – Experian, Equifax and TransUnion.

Job seekers can also opt to pay for a more thorough background check with a service such as MyBackgroundCheck.com, which costs $89.99 and delves into county criminal searches and delivers a Social Security address locator report; previous employment verification for three positions; education verification (highest degree earned); national sex-offender search; and a check against the FBI’s Terrorist Screening Database.

By seeing what a potential employer will see, an applicant be able to begin correcting false information and prepare to defend negative reports.