Employee Background Checks: Key Terms to Know

Background checks can be helpful when you are selecting new employees. They look at several types of records on an individual, including criminal, commercial, and financial.

You or your HR department can do some of these by yourself. Others are more easily done by an agency that specializes in collecting this type of data.

Much of the information is public and available to anyone, but some require the pre-approval of the prospective employee. Many types of data can be reported for a certain number of years and can be used for employment purposes only if it is relevant to the job.

To choose the right type of check, you need to know what key terms mean. Here is an overview of the most commonly used.

Background check: one or a combination of reports that are used to decide if they are a good selection for employment purposes.

Citizenship, immigration or legal working status report: this has become more common since there are concerns about hiring undocumented workers.

Criminal records: public records from the court system available to anyone. They can be used for employment purposes for seven years, although criminal conviction records have no deadline.

Consumer report: this refers to information collected by a consumer reporting agency like a credit bureau. It tells you about a person’s “credit standing, credit capacity, character, general reputation, personal characteristics or mode of living.”

Driving and vehicle records: companies that hire drivers or do business in the transportation sector usually want to find workers with clean driving records. This type of background check reports on records from the Department of Motor Vehicle and Department of Transportation.

Drug tests: these are done for several reasons, including concerns about keeping workers’ compensation claims low, corporate ethics and to see if a worker can perform the job satisfactorily.

Education records: these make sure than a worker has a high school diploma or GED, or has the college degrees that he says he does.

Investigative consumer report: this report comes from interviews with a person’s neighbors, associates and friends.

Litigation records: these check if a potential employee has filed a discrimination lawsuit or is considered a whistleblower.

Medical, mental and physiological evaluation and reports: the person investigated must give his approval before these are checked. It can be furnished by a consumer reporting agency only if the information is considered relevant to the job.

Public records: these include non-criminal information, including liens, bankruptcy and civil judgment. These are limited to seven to ten years for employment purposes.

Reference check: any data that deals with a person’s prior employment history, including interviewing his previous employer and verifying salary, employment dates and job title.

Other types of records are also available. Be sure to know the laws about collecting and using the data for employment purposes.  Besides knowing the key employee background check terms, be sure to be protected with employee dishonesty insurance and employment practices liability insurance (EPLI).