Types

• There are different categories of background checks that are performed. Civil checks include information that is available in public records, including lawsuits, bankruptcies, liens, property ownership and vehicle registrations. Criminal record may contain information on arrests and convictions. Background checks are conducted at the state, county and national level. The most thorough background check is usually a combination of the three.
  
  

Function

• Employers usually take steps to ensure that the information contained in an applicant's paperwork is accurate. Companies also want indications that potential hires may mesh with the company's culture or with the responsibilities and duties they have assigned. Increasingly, businesses and nonprofits organizations are performing extensive background checks on employees, volunteers and contractors.
  
  The investigations provide an additional layer of protection from potential liability in lawsuits due to the company's failure to make a "reasonable" investigation into the background of the people who work for their organizations. This is especially true if the person will handle money or work with children, seniors, the disabled or the elderly.
  
  More individuals are also requesting background checks into the civil and criminal histories of online contacts to make sure that people are as they represent themselves.
  
  

Benefits

• Employers may be able to protect themselves from damages resulting from negligent hiring or negligent retention lawsuits brought by employees or clients by proving that they perform reasonable investigations before hiring certain people. In addition, organizations can make a better-informed decision as to how a person might perform in a particular position.
  
  Private individuals can have peace of mind about potential partners so as to minimize any potential disappointments down the road.
  
  

Misconceptions

• No matter how extensive a background check you perform, you may never get all the information you are seeking about a person. In some states, certain civil and criminal information can not be reported after a specific time. Many states allow some categories of crimes to be expunged or sealed from the public records, although law enforcement still has access to the information. Some civil records related to credit and bankruptcies are also prohibited from appearing in public records after a certain period.
  
  

Warning

• Most background checks are governed by the Federal Trade Commission's Fair Credit and Reporting Act (FCRA) and state laws, especially if intended to be used for employment purpose. Failure to follow the law can result in substantial penalties. For example, employers may need the signature of an applicant or employee before proceeding with a background investigation. Private individuals are not subjected to the laws. In some cases, employers that perform their background checks in-house may not be obligated to federal regulations, but state statutes may still apply. Make sure that you understand the law for conducting background checks in the state in which you live.