Understanding Employment History in Background Checks: Here is What You Need to Know

It’s quite common for employers to conduct background checks as part of their hiring process, especially in today's competitive job markets. One important component of these checks is looking into a candidate's employment history. The purpose of this blog post is to give an overview of the employment history check process and its legal aspects. We will also try to help you understand how employers use the information obtained in a background check.

Employment history checks are an important part of the hiring process, as they provide employers with valuable insights into a candidate's past work performance and professional history. They allow businesses and hiring managers to assess a prospective employee’s suitability for a role and check if they have the necessary experience and skills required for the job. This is done by verifying an applicant's job titles, responsibilities, and tenure at their previous companies. 

Analyzing work history in background checks can also reveal patterns in a candidate's career, such as working in a particular niche, frequent job changes or unexplained employment gaps. All of these may require further investigation. Employers can also easily verify the claims made by applicants on their resumes, which gives them greater confidence and transparency in the hiring process. 

Importance of Employment History Checks

Employment history checks have a lot of important use cases for businesses and organizations. They equip them with the information necessary to make informed hiring decisions and reduce the risk of onboarding unsuitable candidates. An applicant with a proven track record of good job performance and company loyalty is likely to be a valuable asset to their new employer, contributing positively to the company's culture and workflow. Similarly, irregularities in a candidate's employment history can raise red flags, indicating chances of potential issues in the future.

How Employers Use Employment Background Investigation

Employers use verification of past employment in a number of different ways. Firstly, a candidate’s background screening helps to verify their list of qualifications. Secondly, these checks can help confirm if the candidate has held the specific positions or roles that they claim on their CV. 

Looking at a candidate’s previous employment records in background checks can also help employers predict their future performance and how long they are going to stay with the company. For example, a history of long-term commitments with previous employers suggests that the candidate is likely to stay with the new company for a considerable amount of time. Similarly, a history of frequent job hopping could suggest the opposite. 

Legal Aspects and Privacy Concerns

It is important for both employers and candidates to understand the role, importance, and legal aspects of background verification. While employment history checks are an invaluable tool, they must follow the law to respect the candidates' privacy rights. This is usually ensured by asking the candidates if they consent to the past employment verification process. 

In Canada, employers must obtain written consent from a candidate before they can look into their past job and background details. Similarly, the use of employment background checks in the U.S. is regulated by the Fair Credit Reporting Act.

It is also an ethical duty of employers to be transparent about their background check process. They should inform candidates of their rights and any risks associated with background verification.

Background checks provide a complete overview of the candidate's professional and personal history. While these checks include multiple verification components, such as criminal records, educational qualifications, and credit scores, we will focus primarily on how this information is used in the verification of past employment of a candidate. 

Detailed Overview of Employment History Disclosure

You can expect your employer to look into the details that you provided about your previous jobs. The factors most commonly verified are:

• Position held
• Responsibilities and projects worked on
• Recommendations
• Reason for leaving

In the U.S, employers are allowed to verify all of the information provided by a candidate regarding their employment history. This type of check is even mandatory in most U.S. States. However, employers can only access this information with the candidate's consent, so a written consent signed by the candidate is required. They must also ensure that there is no infringement of any privacy laws or regulations.

Common Practices in Employment History Verification

The employment verification process often involves contacting the Human Resources (HR) department or a direct supervisor at the candidate's former workplace. Some companies may also use third-party services specializing in conducting background checks. 

For international candidates, apostilled copies of documents are used in the verification of past employment. Authenticated and legalized documents are also accepted if the candidate is from a non-Hague Convention member country. This helps to verify any documents and experience certificates issued in foreign countries.

However, not all companies may provide detailed information on their former employees. Due to legal concerns or company policies, some organizations may only confirm the dates of employment and job titles. In such cases, additional references or screening might be required to get a complete picture of the candidate's employment history.

Understanding the Information Included

Employment background verifications provide a range of valuable data about a candidate's past job details. This type of verification can help employers understand a candidate’s workplace history and skillset in addition to confirming the basic facts like job titles and dates of employment.

In some cases, a background check may also include the candidate’s reason for leaving a particular job. However, it is usually up to their past employer to reveal this information, as some might not disclose it due to privacy laws or internal policies.

In most of the countries around the world, the law prohibits employers from using certain types of information in their hiring decisions. For example, in California, employers cannot consider arrest records that did not lead to convictions when making hiring decisions. Similarly, the 1988 Privacy Act in Australia regulates the amount and type of information that employers can collect about their prospective employees. The Australian laws are pretty strict about data collection and only allow employers to collect the information that is absolutely necessary in making their final decision. 

In Canada, the Personal Information Protection and Electronic Documents Act (PIPEDA) governs how employers can use and disclose personal information collected in background checks.

Moreover, according to the Canadian Human Rights Act, employers are not allowed to discriminate based on a candidate's past convictions unless they can prove that it affects their ability to perform the job.

• Factors Influencing the Timeframe
  Industry Standards for Employment Background Checks
  Special Cases and Exceptions

When conducting background checks, one of the most frequently asked questions is, “How far back do these checks go?” The short answer is, “up to 7 years.” However, the exact lookback time of an employment history check depends on factors such as industry standards, exceptions, and the respective country’s laws.

Factors Influencing the Timeframe

You only need to take a look at two main factors to get a general idea of how far back your employment background investigation will go. These factors are 

1. The nature of the job
2. The regulations governing your industry

If, for example, you have applied for a role that requires handling sensitive information or high-security clearance, then a more extensive background check may be conducted against your details, as compared to other, less-sensitive, positions.

Laws and regulations of the region where the check is being conducted also play some role in the screening time frame. In the United States, for example, the Fair Credit Reporting Act (FCRA) generally allows background check companies to report arrests for up to seven years, including cases where charges were dismissed.

The rules can vary in other countries, such as Australia and Canada. In Australia, old convictions generally over ten years old are not disclosed in most situations. These are commonly referred to as spent convictions. Similarly, in Canada, employers are not allowed to discriminate based on a candidate's past convictions unless it directly relates to the job. Now, let’s take a look at how industry standards dictate the lookback time in employment checks.  

Industry Standards for Employment Background Checks

Most companies adhere to a lookback period of seven years when verifying workplace history in background screenings. This standard period is widely accepted across industries, ranging from technology and finance to healthcare and education. However, companies in data, security, and other similar sensitive markets may follow their own employment verification process guidelines. 

Special Cases and Exceptions

Positions that demand a high level of safety or responsibility may not follow the seven-year rule. Employers in these industries usually conduct more extensive checks. Common examples include senior executive roles and jobs in the financial sector.

Bankruptcies can be reported for up to ten years. This is especially important for roles where the applicant is expected to be involved in financial decision-making. For positions related to national security or law enforcement, there's usually no limit to how far back an employer can look into a candidate's history.