When a company is looking to hire a new employee, there are typically several steps in the hiring process before an offer letter is extended. One key step that human resources (HR) often completes is a background check on the candidate.
What is a background check?
A background check, also known as a pre-employment screening, is the process of researching and compiling information on a job candidate. Background checks allow employers to verify information provided by candidates on their resumes and during interviews.
Common components of a standard background check include:
- Criminal history – Checking county, state, and federal criminal records for any convictions, pending cases, or arrests
- Education verification – Confirming academic credentials and degrees listed
- Employment verification – Contacting previous employers to confirm dates of employment and job titles
- Reference checks – Speaking with professional and/or personal references provided
- Driving records – Reviewing DMV records for any citations or license restrictions/suspensions (for positions involving driving)
- Credit history – Examining credit reports (typically for positions handling money)
Background checks provide employers with important information to evaluate a candidate’s qualifications, judgment, reliability and other job-related characteristics.
When are background checks conducted?
The timing for conducting a background check can vary by employer. Many organizations complete checks only after they have extended a conditional job offer. This helps prevent any unfair treatment of candidates during the hiring process. A conditional offer means that the job offer is contingent on, or dependent on, the results of the background check.
However, some employers choose to complete background checks earlier in the hiring process, such as after an initial phone screen or first interview. This allows them to narrow down candidates based on potentially disqualifying results before investing significant time in interviews.
Typically, employers will not initiate a background check without a candidate’s knowledge and consent. Candidates are usually informed ahead of time via the job application, interviews or offer letter. A signed release form may also be required.
Common practices
When it comes to the timeline for background checks, several approaches are commonly used:
- After initial offer – The most candidate-friendly option is to conduct background checks only after extending a conditional job offer to a candidate. This ensures all applicants are treated equally until late in the hiring process.
- After final interview stage – Some employers perform checks after the final round of interviews, before selecting their top candidate. This allows comparing finalists on an equal footing.
- After preliminary screening – Other companies choose to screen applicants after an initial call or application review, not wanting to invest extensive time upfront if results reveal any red flags.
The approach depends on factors like the role’s seniority, legal risks, time and budget constraints. But overall, background checks prior to an offer letter are less common than post-offer checks.
Legal compliance
Employers must follow applicable laws regarding when they conduct background checks and make hiring decisions based on the results:
- Federal laws – Title VII of the Civil Rights Act, the Fair Credit Reporting Act, ADA
- State laws – Varying requirements on information access and adverse action notices
- Local laws – City/county restrictions such as “ban the box” ordinances
To avoid legal risks, HR should partner closely with legal counsel when implementing screening policies and using background check information.
Does a background check guarantee a job?
Successfully passing a background check does not guarantee a candidate will ultimately receive a final job offer. The results are just one component employers use to evaluate applicants. Other key factors include interview performance, skills testing, references and the ability to meet all job qualifications.
However, a clean background check is still a prerequisite for hiring at most companies. Failing to pass the screening can remove a candidate from consideration unless there are extenuating circumstances.
When are offer letters sent?
If the background check uncovers any troubling findings, an employer may decide to rescind the conditional job offer instead of moving forward with a final offer letter. Otherwise, here are some general timelines for extending offer letters:
- 1-3 days after completing checks – For straightforward roles with standard screens requiring little review
- 1 week after checks – For professional positions with more extensive screening including reference checks
- 2-4 weeks – For executive roles or certain industries (healthcare, financial) with very comprehensive vetting
Delays could happen if background screening surfaces open issues requiring additional follow up and candidate communications.
What happens if background check fails?
There are several scenarios where a candidate might fail a pre-employment background check:
- Lying on their resume or application, such as falsely claiming a degree or covering up previous employment
- Refusing to provide consent for the background check
- Having a criminal history or pending case disqualifying for the position
- Poor credit history or bankruptcy for a job handling finances
- Failing a required drug test for the role
Employers must follow adverse action procedures if they rescind a job offer based on the results. This includes:
- Notifying the applicant of the decision
- Providing a copy of the background check report
- Giving the applicant a chance to dispute any inaccurate or incomplete information
HR and the hiring manager should also document all actions in case of potential legal issues.
Options if candidate contests results
Applicants have a right to dispute any incorrect or incomplete findings in their background check report. As an employer, you have several options in these scenarios:
- Request a re-check – Have your screening provider redo the report to verify results.
- Consult legal counsel – Get guidance on compliance requirements if the applicant’s issue is legally complex.
- Obtain additional information – Ask the candidate to furnish documentation supporting their claims.
- Modify offer – Change the offer to avoid the problematic aspect, like assigning different duties.
- Withdraw offer – Rescind the conditional job offer after following adverse action procedures.
By addressing disputes promptly and keeping candidates informed, employers can avoid potential legal disputes.
Are background checks always required?
Most employers conduct some level of background screening on new hires. However, checks may not be required in all situations:
- Internal hires – Promotions or transfers may skip checks since the employee is known.
- Low-risk roles – Positions with little financial, security or compliance risk may not need screening.
- Time constraints – Urgent hiring needs may preclude waiting for full checks to complete.
- Casual laborers – Short-term seasonal hires may avoid checks if cost outweighed by benefits.
Even if not mandated across the board,targeted background checks on high-risk roles is considered a best practice. Written policies outline when checks are discretionary versus required.
Should applicants ever pay?
Reputable employers do not charge job applicants or transfer background check fees onto candidates. The company hiring the new employee is responsible for paying screening costs.
However, it is acceptable to ask applicants to cover the costs of replacing any employment-related documents, like educational transcripts or fingerprint cards. But candidates should not pay for the actual background check.
Is consent mandatory to conduct checks?
For most private employers, obtaining a candidate’s consent is required before initiating a background check. Consent is typically provided via:
- A disclosure and authorization form included with the job application
- A separate consent form just for the background check
- Verbally as noted in the applicant’s file
The disclosure informs candidates that a background check will be conducted, if they advance in the hiring process, and authorizes the employer to obtain the necessary reports.
Are background checks a pass or fail?
Background check results are not strictly a pass or fail situation. There are several gray areas to consider:
- Minor issues – Things like a past bankruptcy or dismissed charge may get a pass.
- Old records – Outdated or juvenile offenses that are less relevant may be excused.
- Irrelevant findings – For example, a DUI would likely not impact an office-based role.
- Local laws – Some locations restrict using certain criminal or financial history in hiring.
For these reasons, employers take a holistic approach to evaluate background checks based on relevance, severity, recency and other nuances.
Conclusion
Conducting background checks prior to finalizing a job offer is standard practice for most employers seeking to make informed hiring decisions. While checks at the offer letter stage are less common, companies may choose to screen applicants earlier depending on factors like the role requirements, legal landscape, and hiring timeline.
Regardless of timing, employers should have written background check policies, secure candidate consent, follow adverse action protocols if needed, and ensure compliance with all federal, state and local labor laws.
With the right precautions, pre-employment background screening can be an important tool for both organizations and applicants. For employers, it mitigates hiring risks around ethics, safety and liability. And for candidates, it demonstrates their integrity and qualifications in order to earn the job opportunity.
