Definition of Background Check

Background Check

A thorough background check ensures the candidate you’ve selected meets the requirements of the position and has the potential to become a long-term, successful hire.

What is a background check?

Recruitment and hiring require time and resources. Therefore, background checks for prospective new employees are a critical tool for businesses. Determining whether a candidate has the skills, experience, and capacity to perform the work is vital to making the right hire.

The goal of background checks is to determine whether or not the applicant is who they say they are and if there’s anything in their history that should exclude them from being hired. Background checks take many forms. Some are subject to federal and local regulations for use.

Some types of background checks include:

  • Credit check
  • Criminal history, if allowed by law and limited use under
  • Driving record, if the role requires driving
  • Drug screening, if permitted by law
  • Education verification
  • Employment verification
  • Professional licenses and certification verification
  • References — personal and/or professional
  • Securities and Exchange Commission (SEC) licenses
  • Sexual offender registry check
  • Social media screening

The most common background checks have traditionally been employment, education, and reference checks. These typically involve direct contact with past employers to verify the dates, titles, and duties the candidate has listed on their resume or application.

High schools, colleges, and universities provide verification of educational credentials. Personal or professional references are typically provided by phone or email.

History of background checks

For decades, businesses have commonly used background checks to verify applicants’ history and credentials. This easy definition of the background check tool provides process clarity. It often involves a few phone calls, generally less than a half-hour’s time on the part of the recruiter or hiring manager.

As employers gained access to more ways of screening candidates, newer types of background checks have become common. Some have come under scrutiny in recent years.

Particular types of background checks have become the subject of federal and local regulation. Understanding what laws apply where you do business regarding background checks is essential.

Why are background checks important for business?

Background checks set a new employee up for success and avoid a bad hire for the business. Applicants with the right skills and background for the job are more likely to succeed. If they don’t, they’ll be problematic for the employer.

Unfortunately, many organizations skip conducting background checks to their peril. Some estimates report that one-third or more candidates lie on their applications or resumes. These can include:

  • Exaggerating dates of employment
  • Position titles
  • Job responsibilities
  • Competencies
  • Unearned degrees
  • Fabricating entire jobs.

Businesses need to use the background check process to screen out (or explain away) any discrepancies in an applicant’s history. An applicant with outstanding book fees may have had their degree withheld, an easy fix. In others, lists of past employers are all listed as defunct: a huge red flag.

Almost every business will use employment and education verification. There are many types of background checks employers use. Some are industry-specific, while others are generic. Recruiters can perform the check in-house or outsource background checks to third-party providers.

Employment verification

This involves verifying the candidate has worked in all the past positions listed on their resume or application. In addition to checking that the prospective employee actually worked for the employer, verify:

  • Their job title
  • Role responsibilities
  • The dates they were employed

Some businesses will provide only that information and nothing more. Others will allow recruiters to delve deeper and ask for additional information. Ask if they will inform you if the past employee was subject to any disciplinary action, whether they were terminated voluntarily or involuntarily, and if they’re eligible for rehire.

Education verification

Colleges, universities, trade schools, and high schools can easily verify academic credentials. A phone call to the registrar’s office of most schools, with the legal name and date(s) graduated, are all that’s needed to perform this check.

It’s best practice to verify every candidate’s credentials, regardless of position. Don’t assume the higher up the corporate ladder, the less likely an applicant is to ‘fudge’ their academic credentials. ResumeBuilder found 72% of workers earning more than $150,000 per year admit to lying about their education when applying for a job.

References — personal and/or professional

Personal or professional references were once considered the norm and common practice when screening potential new hires. Many employers hesitate to provide references because of our litigious society. For many businesses, the only references provided verify objective facts: dates of employment and title.

References can provide valuable insight into a candidate’s work ethic, and businesses should attempt to obtain them. Ask a candidate to provide the names and contact information of people they believe are willing to speak candidly about them.

In most cases, you’ll be connected with someone with a positive perspective on the applicant — no one will tell you the name of the person who fired them. But you may still be able to uncover valuable information about the applicant if you’re strategic in your questions and listen carefully to the answers provided or avoided.

Criminal history background checks

In the past, a candidate’s criminal history often created a barrier to employment. Many states and the federal government have recommended or enacted ‘ban the box’ legislation. These laws prohibit employers from asking about criminal history before an offer of employment has been made.

Removing the ‘check this box if you have ever been convicted of a felony or misdemeanor’ from applications is now required in most states. The change is because the ‘box’ tended to exclude candidates out of hand.

Today, employers are required to go through the interview process, and only if there is an offer of employment can they check for criminal history. If the results show an incident in the applicant’s past, the EEOC recommends employers weigh that information carefully before excluding the candidate. They should consider:

  • The nature of the crime and how/if it relates to the open position
  • The severity of the crime and how/if it relates to the open position
  • When the crime occurred, whether it was recent or in the candidate’s distant past

In some states, employers are required to provide the applicant an opportunity to dispute any information that has arisen during a criminal background check. It’s a best practice to verify the details of any ‘ban the box’ legislation where you do business.

Drug screening

Commonly used in the past, drug screening was a way for employers to mitigate risk in the workplace. As laws for medical and recreational cannabis use have changed across the nation, many employers have shifted how they screen for drug use.

Several states have enacted laws that protect workers who use legalized cannabis from employment exclusion. Although employers still have the right to prohibit staff from working while impaired, it’s essential to check with your local Department of Labor to comply with such laws.

Driving record

Businesses need to verify an employees’ driving record is clean or acceptable if they must drive for the job. Some companies require a commercial driver’s license (CDL) to operate larger vehicles. These typically include driving history checks in any state where the applicant has lived.

Professional licenses and certifications

If the candidate is required to have licensing or certifications to perform the work, these credentials must be verified. Associations or schools generally issue and confirmed certifications.

Initial background checks are performed along with follow-ups for re-credentialing as required.

Social media screening

The newest background check in the HR toolkit is social media screening. This type of background check looks at an applicant’s social media presence to check for any red flags.

Employers typically check for evidence of:

  • Offensive behaviors
  • Racism
  • Bullying, etc.

Sometimes, businesses routinely monitor existing employees’ social media profiles to ensure their public persona aligns with the company’s values.

Sexual Offender Registry Check

In some industries, like education, childcare, and certain healthcare facilities, employers use sexual offender registries to verify a candidate’s history. Many states prohibit hiring persons with a sexual offense conviction in some industries.

These checks can be an affirmative defense for employers whose businesses care for children, the elderly, or persons with a disability.

Credit Check

Some candidates may be subject to credit check verification if allowed by law and then only under limited use. Under the federal Fair Credit Reporting Act (FCRA), these background checks are limited to specific positions.

Some guidelines include positions that require access to confidential financial information, bank or credit card information, or regular access to cash of $10,000 or more.

Securities and Exchange Commission (SEC) licenses

For brokerages and workers involved in trading and securities, financial advisors, investment bankers, and other financial professionals, the SEC requires specific licenses depending on the nature of the work being performed. These include:

  • A Series 3
  • The Series 6
  • A Series 7 and others

These licenses are specific to the nature of the investment or commodity being sold or traded. The Agency or trade organization responsible for issuing the licenses typically verifies them.

Some background check practices included asking for or inquiring about salary history. Many states have banned this question because the approach typically keeps workers’ initial and overall pay rates low. Check with your local Department of Labor to understand if there are salary history bans where you do business.


Even the most cursory background check can make the difference between an effective hire and one that has the potential to wreak havoc on your business. This small step, which typically takes less than an hour, is a small investment necessary to ensure an effective hiring process.

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