December 28, 2023

The Importance of Conducting Employee Background Checks

Background verifications and references serve as the cornerstone methods through which employers extract insights on potential candidates from third-party sources. Typically, a background check delves into several facets—confirming any potential disqualifiers for a role which might come from a history of legal infractions, driving violations, unsatisfactory credit reports, or inaccurate representations of academic achievements and professional experience. On the flip side, reference checks are focused on reaching out to the candidate’s previous places of employment and educational institutions to validate their work history and to gather opinions regarding their competencies, knowledge base, abilities, and character traits.

According to a study by SHRM, an astounding 92 percent of employers they surveyed put their candidates through a background screening process. The findings also underscored that while many organizations undertake these checks during the recruitment phase, some extend the practice throughout the employee’s tenure with the company.

The Rationale Behind Background Screenings

The primary goal behind such thorough screenings is straightforward: to ensure the most suitable candidate is chosen for a position, thereby benefiting the organization in its entirety.


A significant motivation for conducting comprehensive background and reference assessments is to mitigate diverse types of risk and liability for an employer. Potential dangers include:

Threats posed to other employees due to aggressive behavior or harassment within the workplace.

The risk of customer harm conducted on company property.

Harm to public safety stemming from negligent vehicular operations.

Risks to the financial integrity or reputation of the business.

Defending against legal claims such as negligent hiring is an important consideration here since presenting detailed criminal record searches can demonstrate due diligence on part of the employer during the hiring process.


Resume embellishments or outright fabrications of job responsibilities are surprisingly common. Consequently, contacting past employers can help distinguish genuine talent from those less qualified. By accurately capturing previous job performance records, you can anticipate how a potential employee will handle professional responsibilities—including their productivity levels and communication skills.


By verifying a candidate’s self-reported qualifications, you can confirm their reliability and eagerness to undertake new roles responsibly. A shocking revelation from a 2018 HireRight report indicated that 85% of employers discovered dishonest claims on a resume or application form—a sharp rise from just 66% five years earlier. This underscores the importance of scrutinizing education credentials and work history for discrepancies.

Legal Complexities in Background Checks

HR professionals need to navigate various legal territories when undertaking background checks. These complexities come in various forms, spanning federal regulations to state-specific laws:


Several federal mandates come into play about background evaluations:

Fair Credit Reporting Act (FCRA). The FCRA governs the utilization of consumer reports for investigative purposes, particularly when an external party is performing these checks for an employer. This law becomes applicable as soon as inquiries move beyond simple performance evaluations and delve into personal references or personal perspectives.

The Fair and Accurate Credit Transactions Act (FACTA) amends FCRA to include provisions about securing consumer data and how it should be disposed of properly.

Equal Employment Opportunity (EEO) laws require that background checks do not lead to discriminatory practices.

The Immigration Reform and Control Act of 1986 (IRCA) prohibits nationality or citizenship-based discrimination while also establishing frameworks for employment verification through processes like Form I-9 post-hire verification.



On top of federal laws, individual states may lay down additional stipulations on topics ranging from credit report procurement, immigration enforcement measures, data protection protocols, record retention requirements, and conditions under which criminal histories can be reviewed during the hiring process. Employers should make it a point to familiarize themselves with such nuances relevant to their industry and location.


Employers may also face common law disputes stemming from negligent hiring practices or background check procedures that infringe upon privacy rights, amount to defamation, or unjustly interfere with current or future employment opportunities. An interesting legal development in this area is that many states now provide varying degrees of immunity to those who act in good faith by providing employment references.

Different Types of Background and Reference Evaluations

Employers today implement various background checks tailored to their specific needs; below are some key types:


False claims about previous work experience are all too common on resumes. Therefore, it’s paramount that HR professionals corroborate facts with prior employers about:

Periods of employment.

Roles held.

Job responsibilities.

Circumstances surrounding separation from prior roles.


False educational claims—like degrees that were never completed or institutions that were never attended—are among the most frequent deceptions uncovered during this stage of background checking. It’s therefore imperative that HR not only validates degrees claimed but also confirms attendance at listed institutions.


Screening for past criminal activity has become more prevalent due to potential legal liabilities employers could face should an employee become embroiled in workplace conflicts or other harmful acts. The use of third-party screening services has grown in this area, which offers more comprehensive and accurate background checks than what most employers could perform internally if they adhere strictly to proper methods and guidelines.

Moreover, there’s a move towards increased scrutiny in several other areas: from monitoring social media footprints for potential red flags to automated processes enhancing traditional reference-checking methods—and even extending pre-employment screenings to contingent workforces like freelancers or contractors. As societies shift and evolve so do screening practices; reflecting a complex weave where technological advancements intersect with evolving norms around employee privacy and second-chance employment opportunities.

Conducting thorough background screenings is anything but straightforward—it requires diligent attention to detail within an intricate web of legal requirements while simultaneously embracing modern technological trends empowering HR professionals as they seek out the best talent for their organizations. When you partner with Tesseon you will gain access to a suite of robust background check tools and a user-friendly dashboard, providing expert resources to review comprehensive candidate profiles.

share this blog


Sign up for our newsletter for the latest Tesseon information.

This field is for validation purposes and should be left unchanged.

Related Blogs

Sorry, we couldn't find any posts. Please try a different search.

What our clients are saying about us

Disclaimer: The information provided on this blog page is for general informational purposes only and should not be considered as legal advice. It is advisable to seek professional legal counsel before taking any action based on the content of this page. We do not guarantee the accuracy or completeness of the information provided, and we will not be liable for any losses or damages arising from its use. Any reliance on the information provided is solely at your own risk. Consult a qualified attorney for personalized legal advice.

Scroll to Top