Types of Background Checks

If you're a hiring manager in an HR department or a business owner recruiting for your own company, you want the best people to add to your team. A key part of that is careful vetting, to ensure that what an applicant tells you on a resume or job application and during the interview is accurate. It is also important to have a more complete picture of their background, so that you can minimize your company's risks. There are many different types of background screenings, but which are the best background checks for your industry? In this article, we explain the different kinds of employment background checks, our recommendations for different industries, and why they are so important.

Jared Rosenthal
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What Are the Different Types of Background Checks?

Types of background checks include (but are not limited to) criminal background checks, resume verification, prior employment, references, education and degree verification, sex offender registry, do-not-fly list, workers compensation history, professional licenses, and official sanctions.

Social Security Number (SSN) Trace

An SSN trace is the starting point for almost all pre-employment background checks. In addition to providing a year and state where it was issued, it also gives the name and address history of the individual associated with the SSN. This trace will search various databases, from banks, lending institutions and schools, to credit card and utility companies. It will report any aliases that are discovered. It may lead to other counties and databases that should be searched and can be used to find potential criminal records.

Criminal History

A criminal background check can include several different types of searches, such as the national criminal database, county courthouse records, sex offender registries, federal and state criminal records and domestic and global watch lists. This is a common background check for many industries, from store managers and bank employees to education and property management.

Examples include:

  • National Crime Index – Searches databases that combine data from multiple jurisdictions; provides insight into a person's criminal history.
  • Court Records – Searches the court record repository for a particular state or county.
  • Registered Sex Offender Registry – There are sex offender registries at both the state and federal levels.
  • Terrorism Registry – Also known as the 'do not fly' list.

Education Verification

This background check verifies an applicant's educational institutions attended and degrees earned. It follows up with what they stated on their resumes and job applications to ensure that they have the educational background they claim. This is especially important for positions that require advanced degrees and specialized skills.

Employment Verification

Prior employers, dates of employment, job titles and duties are researched to confirm what is stated in the resume. This confirms that a job candidate has the necessary experience to perform the job responsibilities. This type of background check is extremely common and is used by most employers in a wide range of industries.

Reference Checks

A reference check can include both work and personal references, and they will provide a deeper understanding of the applicant. Learning about your candidate's personality, character traits and abilities from someone who has worked with them can be invaluable. It is especially important for those who work closely with patients or customers, and any position of trust in an organization.

Professional License Verification

For certain positions, there may be a professional license or certification that is required. In addition to running a background check on educational institutions for degrees, you can also confirm that they have the necessary certification or license for the position. Just a few examples of these are doctors and nurses, teachers, lawyers and building contractors.

Credit Reports

Not every employer will check on a candidate's credit history. However, if your organization is a legal or accounting firm, or if you are in law enforcement, the military, or another type of government agency, this may be required. Banks and casinos (and anywhere else that handles money) are also likely to require credit checks for their prospective employees. If this applies to your organization, it is important to understand and comply with regulations under the Fair Credit Reporting Act. Among other rules, you must notify and get written permission to obtain anyone's credit history, give them time to respond to any "red flags" in the report, and provide them with a copy of the report.

Driving Record

All companies that employ commercial drivers, whether it's to move freight across the country or transport school children, must have background checks that include motor vehicle records. In this way, a transportation company can ensure safety on the roads and highways. Companies that employ drivers who are regulated by the Department of Transportation (DOT) must comply with federal regulations. DOT background checks are available for this purpose.

Healthcare Background Checks

There are additional specialized background screenings for everyone working in the healthcare industry. These are to check instances of healthcare fraud and sanctions.

  • FACIS – The Fraud and Control Information System (FACIS) is a database that indicates actions against people and companies in healthcare that have been sanctioned. This includes any disciplinary actions such as reprimands, probation, exclusions, and debarments. You can choose a state check, federal check or for all 50 states. State FACIS checks may include the Medicaid and licensing boards.

  • OFAC Sanctions – The Office of Foreign Assets Control (within the U.S. Treasury Department) keeps records that state if a person or company is authorized to do business in the U.S. This is important for any company in the financial industry. This check will detect any economic and trade sanctions — for example, someone who is involved with a foreign regime, terrorist organization or drug traffickers.

  • OIG Sanctions – The Office of the Inspector General can exclude individuals and organizations from health care programs that are federally funded. Reasons may include a conviction for Medicaid or Medicare fraud. This check looks at the List of Excluded Individuals/Entities (LEIE), for either your new hires or your existing employees.

Drug Testing

For many organizations, part of a comprehensive pre-employment background check is drug and alcohol testing. Most companies now require a drug screening before a new employee can begin work. This is done for the safety of the employee, co-workers and customers, clients, or patients, as well as to minimize the company's liability risk.

What's the Difference Between Employment and Real Estate Background Screenings?

A real estate agent enters people's homes when they're away and meets with potential buyers. This industry requires especially diligent vetting, from criminal background and reference checks to employment and license verifications.

State Requirements for Background Checks

Each U.S. state has its own rules and regulations when it comes to pre-employment screening. It is important for your organization to adhere to the regulations of the state where you are based as well as where you hire employees.

Background Checks Are Important for Your Business

Your company likely spends a lot of time, money and resources when hiring and onboarding a new employee. For small businesses, the quality of your new hires is critical, since you're just starting to build your team and your company's reputation. According to CareerBuilder, almost three out of four small businesses hired the wrong person for the job, and nearly half said the mistake cost them money — between $1,000 and $10,000.

Background screenings help to minimize the chance of an unsafe workplace, and of potential employee theft. There's also the risk of a negligent hiring claim against your business, if someone gets hurt because of someone you hired. When you make background checks part of your hiring process, you'll have greater certainty that you've hired the right people. Working with a professional background screening company helps you to hire the best employees, while staying in compliance with state and federal requirements.

Why Partner with Health Street for Your Background Screenings

Health Street has more than a decade of experience in making the screening process easy and reliable for thousands of businesses. We give you only the most accurate and actionable data in your reports, so that you can make smarter hiring decisions. With our wide range of background screening services, including our most comprehensive background check package, we thoroughly vet your job candidates to help your company avoid the risk of negligent hiring. We stay on top of changing laws governing background checks and know how to navigate the intricacies of state regulations.

Jared Rosenthal

Jared Rosenthal

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