Common Mistakes to Avoid in Background Checks

June 13 2023
6 min read

Background checks are an essential part of the hiring process for most businesses, helping to ensure that employers are hiring the best possible candidates for the job.

Proper screening via background checks can also help protect a company from potential legal issues down the line. In addition, the importance of background checks is clearly understood among human resources professionals and executives who must fill critical positions amid an ongoing crunch for talent that makes it more difficult than ever to find an ideal candidate.

A recent survey of HR decision-makers – conducted by the Professional Background Screening Association – found 93% of all companies and organizations conduct some type of background check, with even more (95%) of respondents with locations in the U.S. saying they are committed to the practice. The reasons given for conducting background checks include protecting fellow employees and customers, improving the quality of hires, and protecting a company’s reputation, with full-time employees receiving a screening 91% of the time for companies with at least one location in the U.S.

With so many positive reasons for implementing and maintaining a robust background screening process, there are several mistakes that businesses need to be aware of when conducting background checks to avoid negative consequences for the company.

Ban the Box Movement

Businesses must be aware of the growing trend of Ban the Box legislation, which refers to local regulations prohibiting employers from asking about a candidate’s criminal history – or even previous compensation levels – on job applications during the application and up to and through the conditional offer phase. These rules aim to reduce discrimination against candidates with criminal records and give them a fair chance at employment.

Because Ban the Box regulations vary by location, with distinct rules in place at the city level in some cases, businesses must be aware of them and ensure that their hiring practices comply with local laws. They may also need to adjust their background check process to ensure that it does not unfairly discriminate against candidates with criminal records.

Businesses that fail to comply with Ban the Box regulations could face legal consequences, including fines and lawsuits. Additionally, they may face negative publicity and damage to their reputation.

Disclosure and Authorization

One of the most critical mistakes businesses make is failing to adequately disclose their background check process and obtain proper authorization from candidates. The Fair Credit Reporting Act (FCRA) requires that employers disclose to candidates that they intend to conduct a background check and obtain written authorization from the candidate to do so.

Businesses must provide candidates with a clear and concise disclosure in the form of a “plain statement” that the business may obtain a report for employment purposes and also may include a “concise explanation” of what that statement means. State law may also require additional disclosures to candidates.

Top-tier screening services can help employers to identify the appropriate language for use in each company situation and keep employers on the lookout for unnecessary terms and verbiage that can create an opening for expensive class action lawsuits. Additionally, the disclosure must be separate from other employment materials, such as job applications or offer letters.

If a business fails to provide a proper disclosure – the language of which should be reviewed and updated yearly – and obtain proper authorization from the candidate, they could face legal consequences. The FCRA allows candidates to sue employers for violations, and they may be eligible for damages up to $1,000 per violation, plus attorney fees and court costs.

The authorization step is much less talked about than the other steps during screenings, but it is just as important. First, make sure you are obtaining your candidate’s expressed written consent to procure a background screening report. Consider specific language that you should include in your authorization, so information sources accept your candidate’s authorization form without question.

Consider whether you need the consent to be ongoing if your background screening program includes annual checks or ongoing monitoring. In addition, some states require a fresh authorization and disclosure every time, so think about building that step into your process.

Adverse Action Process

Another critical mistake businesses make when conducting background checks is failing to follow the adverse action process prescribed in the FCRA.

The adverse action process refers to the steps an employer must take when they are considering not hiring a candidate based on the results of their background check.

The adverse action process consists of three steps: pre-adverse action, a waiting period, and then adverse action (sometimes called final adverse action). During the pre-adverse action step, the employer must provide the candidate a written communication that they are considering negative hiring decision related to the candidate. This information is based upon the information contained in the background screening report.

A copy of their background check report, a copy of a Summary of your Rights under the FCRA, and information about the role of the background screening company and how the candidate can initiate a dispute with the background screening company must be provided to the candidate. Some states and localities require that the pre-adverse action letter may have to include additional information – for instance, the reason the employer has taken the adverse action or notification of other rights under applicable state or local laws.

The second step, the waiting period, provides the candidate the opportunity to receive a copy of their report and the notice from the employer that they intend to make a negative hiring decision and to initiate a dispute if information in the background report is inaccurate or incomplete.

The FCRA does not stipulate a timeframe for this waiting period, but case law on the topic indicates that a window of at least five business days would be reasonable. States and localities also legislate this waiting period, so employers should take those time frames into consideration as well. If the candidate does dispute information in their report. In that case, the employer is required to hold off on making the decision final and hold open the position until the reinvestigation triggered by the dispute is completed.

Finally, during the adverse action step the employer may make a final decision regarding hiring the candidate. They may decide not to hire the candidate based on the results of their background check, if there’s been no dispute initiated, or if the investigation related to the dispute has been completed, the employer may reconsider their decision.

learn more mistakes to avoid

If the employer decides to move forward with a negative hiring decision at this point, the adverse action step requires the employer to notify the candidate in writing that their decision is now final, provide the FCRA Summary of Right document for a second time and provide information to the candidate about the background check company used to prepare the report. Some states and localities require the adverse action letter to include additional information.

The federal Equal Employment Opportunity Commission has promulgated enforcement guidance regarding employer consideration of criminal history and credit history information; thus, employers should be careful to ensure their background screening policy and procedures are not discriminatory.

In addition, several states and localities now also legislate an individualized assessment process to ensure that if criminal history information was the reason for the adverse decision that the employer has first taken into consideration factors about the record and the candidate that show the decision to use criminal history information is related to the specific duties of the position and that there is a business necessity to do so. Employers should consider taking this step and doing an interactive, individualized assessment process before or to coincide with the pre-adverse action process.

Maintaining the adverse action process and staying compliant with applicable employment laws is a crucial compliance step. If a business fails to follow the adverse action process correctly, they could face legal consequences, including candidates seeking to sue employers for violations of the FCRA and other state and local laws, with awards based on lost wages and emotional distress.

Average Turnaround Time

When conducting background checks, businesses often fail to account for the fact that a screening company’s average turnaround time should be seen as exactly that; an average that can easily take more time to execute properly.

Suppose a business rushes through the background check process or makes hiring decisions before receiving the results of the background check. In that case, can miss critical information that could impact their decision. Additionally, rushing the process could result in inaccuracies in the report or missing information.

In the name of due diligence and care, businesses should build in a cushion for the average turnaround time for their background check company and avoid making any hiring decisions until they have received the report’s results.


Conducting background checks is an important step in the hiring process for businesses, but it’s essential to do it correctly to avoid risk and protect the interests of both the company and the job candidates. Consider prioritizing a review of your company’s background screening process today.

This article was originally published by HR Daily Advisor.

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