Background Checks For Small Businesses

Why you should run background checks for hiring

Small businesses that need to hire just a few employees, or several hundred employees, a year may use small business background checks to help determine the eligibility and qualifications of potential candidates. Small business owners can use employee screenings to verify information on a resume or application. However, background checks often reveal information that goes beyond what a candidate shares about themselves, such as their professional references or recent work experience. 

Employers may consider different records based on the role, industry, or an organization’s internal hiring guidelines. In some cases, certain types of background checks may also be required by law. For example, childcare workers may be required to submit to a criminal background check. 

Organizations may use background checks for small businesses to help make more informed hiring decisions. Not only do they help employers get a more complete picture of an individual’s history, but they can also help create safer work environments, protect company assets, and protect your company against potential legal issues.

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What shows up on a small business background check?

A small business background check can reveal various insights into a candidate’s history depending on the searches requested, such as criminal records, driving history, employment history, and more. Here’s a closer look at some of the most common types of small business background checks and what types of information may be reported. 

criminal records

Looking into a candidate’s criminal history can help small business owners make more informed hiring decisions and mitigate risk. Employers may choose from several types of criminal screenings, depending on the information needed. For example, a national background check returns a candidate’s state and county criminal records from courts where those records are digitized, but does not include federal criminal records.

A candidate’s criminal history may include both misdemeanor and felony convictions as well pending criminal cases, depending on the source of the records and any fair hiring or ban-the-box laws that may apply. In some cases, a criminal history may also report a candidate’s arrests pending prosecution, active warrants, infractions, and any history the candidate may have of being incarcerated as an adult. 

motor vehicle records

Small businesses that require the safe operation of a company or personal vehicle or equipment, may benefit from conducting a motor vehicle record search. MVRs can help employers gain insight into a candidate’s driving history, including their license status, accidents, moving violations, and vehicle-related convictions such as DUIs. 

education verification

In some cases, small business owners may need to validate a candidate’s education. An education verification can be used to confirm a candidate’s educational history, including school attended, degrees, dates of graduation.

employment verification

Employment verification is a common background check used by small businesses to validate a candidate’s job history. In addition to checking past job titles, employment verification also is used by employers to determine if an individual’s work experience is sufficient to meet the role’s requirements by confirming previous achievements and responsibilities. 

drug testing

Employers looking to improve workplace productivity and support safety may choose to implement a drug screening program. Drug testing screens for the presence of prescription and illicit drugs, enabling employers to make more informed hiring decisions.

How to run background checks on employees

Small businesses can choose to run employee background checks directly by requesting public records from relevant jurisdictions, or partner with a trusted consumer reporting agency (CRA), like GoodHire. When organizations choose to partner with a CRA for their small business employee background checks, the process is often more accurate with quicker turnaround times. 

GoodHire’s access to many types of databases and public records and network of professional court runners across the US helps return faster, more accurate results. Working with a CRA can also help small business owners stay compliant with complex federal, state, and local hiring laws, providing added peace of mind.

How long does it take to get the report?

The turnaround time for a small business background check depends on the scope and type of searches, and could take anywhere from less than an hour or up to five days. Timing can also depend on who is conducting the search—the employer or a CRA. While certain types of records may be available online, others may need to be requested over the phone, by mail, or in person which can involve visiting courthouses, county clerks, and law enforcement agencies. 

Small business owners that want a more efficient, hassle-free process often choose to partner with a trusted background check provider, like GoodHire, for a more streamlined process. Not only can a CRA provide quicker turnaround times, the best background check companies for small businesses also offer integrations with popular HRIS and ATS platforms to streamline the onboarding process.

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Small business background check compliance laws

When running a small business background check, employers are required to follow certain federal, state, and local laws. Using a background check service for small businesses can help organizations stay compliant with hiring laws.

Fair credit reporting act (FCRA)

Under the federal Fair Credit Reporting Act (FCRA), small businesses that choose to partner with a CRA must comply with certain regulations. The FCRA mandates that candidates receive written notification of the intent to conduct a background check and that in turn, employers must receive the candidate’s written consent to perform the check. If an employer decides not to hire the candidate based on information found in the report, the employer must follow the adverse action process. 

Equal employment opportunity commission (EEOC)

The Equal Employment Opportunity Commission (EEOC) provides guidance to ensure that individuals are federally-protected against various types of discrimination in the workplace due to their race, national origin, religion, disability, or other legally protected classes. Under the EEOC, employers are recommended to not use certain types of criminal history information, such as non-convictions, when considering candidate criminal records during the background check process. 

If a conviction on a candidate’s criminal background check causes an employer to consider adverse action, the EEOC recommends that the employer performs an “individualized assessment” and gives the candidate the opportunity to provide context around their past criminal conduct. Certain types of roles where employers may need to consider a candidate’s criminal history may be exempt from the EEOC if a clean record is deemed a “business necessity.”

Ban-the-box and fair hiring laws

Both ban-the-box laws and fair hiring regulations are designed to remove the barriers to employment for individuals with a criminal record. Ban-the-box laws typically prohibit employers from asking about a candidate’s criminal record on an application, but may also impact when an employer can conduct a background check. Fair hiring laws may also impose restrictions on how employers are allowed to consider or use conviction information when making hiring decisions. 

There are federal fair hiring laws that apply to federal agencies and federal civilian and defense contractors, however no general federal ban-the-box legislation exists. Instead, many states and local jurisdictions have their own ban-the-box laws and fair chance regulations. To avoid legal liability and costly penalties, it’s important for small businesses to be aware of what laws may apply in the states, counties, and cities where you hire.

Get a small business background check with GoodHire

Small businesses owners looking to implement a turnkey employment background check process may benefit from working with a trusted CRA, like GoodHire. We offer several packages to get you started, and you can easily customize them with add-on screenings for specific roles. Our user-friendly online platform and automated workflows help streamline your background check process, while built-in tools also support your small business’ compliance with federal, state, and local legal requirements every step of the way. Get started with a small business background check.