A Small Business Guide to Background Checks

When hiring for small businesses, terms like "flexible" and "wear many hats" are usually in the job description. After all, a small business is a growing business and employees must be willing to do their share, and probably even more, to ensure success and hiring of more employees. Hiring at the right time is challenging enough without considering if the person has unsettling marks on their history. Many small businesses find that background screening is too cost-prohibitive or complex. This doesn't have to be the case.

Here is a helpful guide to background checks for small businesses.

Why is Background Screening important?

Business owners and employees alike recognize the value of another good employee. In a small business, employees are like family and depend on each other heavily. Not only that, a bad hiring decision can break a small business, especially if another employee or a customer gets hurt in any way. Background screening is a regulated industry and if these applicant protections aren't met, a small business also runs the risk of litigation from its own employees. 

See also: Here's How to Run Background Checks When You're an HR Department of One

Terminology

In order to understand background screening, it is important to clarify a few terms. The VeriFirst blog is intended to educate on regulations in the background screening and hiring industry. Included are links to previous blogs written on these topics to aid in understanding.

Negligent hiring - Negligent hiring claims are filed against an employer when they fail to perform due diligence on an employee who has caused harm or when the employee failed to prevent the damage given the authority of the employee's position. Here's how to prevent negligent hiring claims against your company.  

Fair Credit Reporting Act (FCRA) - The FCRA regulates the use of consumer reports by employers. The FCRA also dictates the way an applicant is to be notified about obtaining a background check or credit report and how they can dispute the findings. This regulation helps to ensure the accuracy of background screening reports. Here are an employer's basic responsibilities under the FCRA and how to avoid litigation.

Pre-Adverse Action and Adverse Action - These terms are referred to in the FCRA and are used to inform a candidate or employee that their background check yielded negative results. If a business does not adhere to these rules, they can be taken to court by the employee. Here are the basics of adverse action and some common compliance questions around pre-adverse and adverse action. 

When should I do a Background Check?

Background screening can be simplified with a well-thought out hiring process. As a small business, hiring new employees is the perfect time to create consistent hiring practices and specify the types of background checks to run on certain types of employees. For instance, some employees, depending on their job description, may require a deeper dive into their criminal background, credit or driving records than others. Not every screening is necessary for every employee. VeriFirst has already created an ebook to help clarify the screening employees by position and free templates are included.

Can I get a quick background check online?

When hiring an employee, many small business managers will rely on a resume, the interview, a LinkedIn profile with recommendations and maybe a quick social media search around the internet to help make their decision. Because a background screening can seem overwhelming in terms of time, cost and resources, some will opt to skip it altogether and go with their gut. After all, what information can a background check offer that can't be found online?

In fact, quick online background searches may not be accurate. Employers run the risk of false positives or inaccurate data which to lead to hasty hiring decisions. Working with an experienced background screening provider will alleviate or lessen the potential for wrong data. A professional background check company should examine the data to ensure its accuracy and provide a secure transaction while obtaining the screening. 

What is the cost of a background check?

The cost of the background check will be mostly be dependent on a few things including the number of background checks and the added access fees in certain jurisdiction areas. The best way to save money on background checks include:

• Establishing a hiring and screening policy based on job-description
• Ensuring accurate data entry when hiring by allowing the applicant to apply through a secure online portal
• Using a waterfall screening approach where you add more screens further in the hiring process
• Working with a screening provider that can help reduce access fees and leverage bundled services

The cost of not running a background check, with negligent hiring claims and litigation, has the potential to be even higher than performing due diligence on a new employee.

Still have questions?

Yet another reason to consider working with a professional background screening company is partnership. Small businesses may not hire employees as often as larger businesses and therefore may not be up to speed on the latest local, state or federally mandated regulations for hiring. An experienced background check company that works daily with human resources and hiring managers will certainly be able to provide assistance with hiring practices, including offering resources to guide a small business manager.

At VeriFirst, our FCRA-trained staff is available to answer questions. Our weekly blogs are available to educate. (Subscribe at the top right!) And our resources, including free editable templates, are available for use. Contact us today to see how we can help.