Background Investigations

Background Deep Dive

Reference and background inquiries allow an employer to verify information provided by the applicant. Companies who make proper and judicious use of the information gathered as a result of a thorough background investigation typically reduce exposure to employee fraud, theft, embezzlement, turnover, unqualified employees, negligent hiring claims and violence in the workplace.

The following are the most important aspects that makeup a background investigation. Additionally, how the information can be used to significantly reduce employee difficulties and employment litigation is also discussed:


Checking past employers is used primarily to verify information provided by the applicant on resumes and applications such as dates of employment, job title, compensation, reasons for separation, and re-hire status. With even a small amount of information provided by a past or current employer, you may be able to gauge an applicant’s skill, ability and honesty or perhaps areas such as attendance problems, violent behavior, and manageability.Required element in the defense of negligent hiring claims (regardless of whether or not the reference shares information).

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An important integrity check. Surveys suggest that as many as 1 in 3 resumes and applications contain inaccurate education assertions and that more than 500,000 Americans have bought their academic degrees. This area contains the second highest rate of inaccuracy, behind salary. This check verifies education commiserate with position requirements.

· This is one of the easiest checks to pursue.

· This may include industry specific certifications and other non-degree-oriented training.


Similar to screening employer references and great for gaining an insight into some personality traits of the applicant.

· Addresses of friends and family that are in other states, or are otherwise a great distance away, may also indicate that the candidate had lived in that area. This is important regarding criminal record checks.


May verify the type, status, validity, and restrictions of the applicant’s driver’s license. Can also be used to verify information provided by the candidate such as current address, date of birth and license endorsements.

· Essential if the applicant will drive on company time or use company vehicles.

· May indicate a history of substance abuse.

· Required element in the defense of negligent hiring claims.


A specialized report that may indicate a social security number’s validity or uncover aliases and other people using the same number. Generally includes a candidate’s current and previously reported addresses for comparison to an application.

· Previous addresses should be used in the criminal history check.

· Required element in defense of negligent hiring claims.


Make a thorough criminal background check. It is not uncommon for employers to be sued for an employee’s illegal acts. Do not check arrest histories, only records of criminal convictions. Compare to application to determine a candidate’s honesty. You should not immediately disqualify a candidate for convictions, unless they are not included on the application. Convictions must recent and job related (i.e. driver applicant with a DWI conviction or a retail candidate convicted of shoplifting or theft).

The criminal background check is essential in considering a candidate’s character, integrity, history of violent behavior, and suitability for the job. It is best to visit the appropriate county’s Clerk of Court criminal records office in person but you can also reach them by phone, fax, computer or mail.

· Past performance is indicative of future results.

· Required element in the defense of negligent hiring claims.

· If you should find information that causes you not to hire an individual, keep a copy for your records.


Also called a PEER report by credit reporting bureaus. This report is similar to a standard consumer credit report. It may contain secured and unsecured loan, revolving credit (credit card) and other debt information, as well as payment history. It may include information from public record sources such as judgments, liens, and bankruptcies.

· Used to gauge a candidate’s fiscal responsibility and financial pressures.

· May also include information from the less expensive Social Security Trace.


Used when an applicant must have a license for the job. Verifies the validity, type and status of required licensing.

· Complaints and administrative actions regarding licensed individuals may also be available.

· Required element in the defense of negligent hiring claims.


Although not a background or reference investigation, these tests have a definite place in the pre-hire process. These surveys measure a candidate’s attitude regarding honesty, ethics, substance abuse, reliability, work and supervisors.

· These test typically cost between $6-$10 per candidate.

· Over 45% of Fortune 100 Companies use profile testing at some level in their organization.


Again, tests for the use of illicit drug use also have a definite place in the pre-hire process. Many studies have linked drug use in the workplace to higher than average losses. According to one such study, the average theft incident per employee with a substance addiction is 6.3 times higher than to the average theft incident committed by a non-addicted employee. OSHA has recently re-released information indicating that employees in companies with drug screening programs are 4 times less likely to have job related accidents, equating to greater productivity and profits.

· Required element in the defense of negligent hiring claims (especially when employees operate machinery, drive on company time or use company vehicles).

Keep in mind, the results from these reports must be compared against provided information in order to measure an applicant’s honesty. Hiring a dishonest candidate is never a good decision.

There are many more sources for background and reference investigations than have been included here; a licensed private investigation agency specializing in pre-employment investigations may be able to help you identify and obtain any additional needs.

As in all aspects of the hiring process, federal and state laws may govern how you use or share information obtained while conducting these and other checks; always maintain documentation generated as a result of these reports.

Furthermore, all positions do not require every check or screening process included; for example, a waiter’s position in a restaurant may not warrant the expense of a credit check, motor vehicle report or psychological profile testing.

Some Important Considerations:

· All employers should seriously consider a comprehensive drug-screening program.

· Any time a state or federal license is required for the position, a license verification check must be completed.

· Background investigations for jobs requiring access to cash, financial records, and valuable merchandise (jewelry, weapons, electronics, etc.) should include a pre-employment credit check, with check-ups performed semi-annually.

· Department of Motor Vehicle Records should be checked semi-annually.

· Criminal Background checks should be completed once a year.

· Additional investigation components should be verified when an employee is promoted.

There are many other checks and resources available to the public that can be used to uncover possible sources of fraud, theft, and dishonesty. The components listed above are the most common elements of a background investigation and are not meant to be an exhaustive study. The services of a competent investigations company should be sought to discuss additional options.

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