7 Mistakes Your Making with Background Investigations (and How New Laws Affect Your Hiring)

Are you making critical errors in your background investigation process that could expose your business to legal liability, discrimination claims, and costly bad hires? If you're conducting background checks without a comprehensive understanding of current compliance requirements and best practices, you're not alone; but you're also not protected.

Look no further than the expertise of professional investigation services to help you navigate the complex landscape of employment screening. Background investigations have become increasingly sophisticated, and the legal requirements surrounding them continue to evolve. What worked five years ago may now put your organization at serious risk.

Whether you're a small business owner conducting your first background checks or managing HR for a larger organization, understanding these common pitfalls can save you from expensive mistakes. Let's examine the seven most critical errors employers make and how recent legal changes affect your hiring process.

Understanding Background Investigations

Background investigations are essential in today's hiring landscape. They help ensure that you make informed decisions about potential employees. However, the process can be complicated. Employers must be aware of various legal requirements and best practices to avoid common pitfalls.

The Importance of Compliance

Compliance with laws such as the Fair Credit Reporting Act (FCRA) is crucial. This act mandates that employers obtain explicit written consent before conducting any background investigation. Many employers mistakenly believe that simply mentioning background checks in job postings suffices. However, this assumption can lead to significant legal issues.

The Role of Professional Services

Professional investigation services can provide the expertise needed to navigate these complexities. They stay updated on legal requirements and best practices, ensuring that your background checks are thorough and compliant.

Mistake 1: Failing to Obtain Proper Written Consent

Your biggest legal vulnerability often starts before you even begin the investigation. Many employers assume that mentioning background checks in job postings or applications constitutes sufficient notice, but this approach can land you in serious legal trouble.

The Fair Credit Reporting Act (FCRA) requires explicit written consent before conducting any background investigation. This isn't simply a checkbox on your application; it must be a separate, standalone document that clearly explains what you're doing and why. The consent form cannot include liability waivers or other prohibited language that might confuse candidates about their rights.

Failing to obtain proper consent has resulted in class-action lawsuits costing employers millions of dollars. Your consent process must be crystal clear, properly documented, and consistently applied to every candidate.

The Fix: Create a dedicated consent form that complies with FCRA guidelines. Have every candidate sign this document before initiating any background investigation, and maintain these signed forms in your files.

Mistake 2: Operating Without a Formal Background Check Policy

Without a documented policy, your background check process becomes inconsistent and legally vulnerable. You might screen one candidate thoroughly while giving another a cursory review for the same position, creating the appearance of discriminatory practices even when none were intended.

Your policy should specify which positions require background checks, what type of screening each role needs, and how you'll handle the results. This documentation protects you legally and ensures fair treatment of all candidates.

A comprehensive policy also helps your team understand their responsibilities and provides clear guidance for handling unusual situations that arise during the screening process.

The Fix: Develop a written background check policy that outlines your procedures, ensures consistent application across all candidates, and clearly defines which roles require which types of screening.

Mistake 3: Screening Only Full-Time Employees

Your part-time employees, contractors, and vendors often have the same access to sensitive areas, information, and resources as your full-time staff. Yet many employers create significant security gaps by only screening permanent, full-time hires.

This selective approach ignores the reality of modern workplace access. A part-time employee with building access after hours poses the same potential risks as a full-time worker. Similarly, contractors who handle customer data or financial information should receive the same level of scrutiny as permanent employees in comparable roles.

The legal risks of negligent hiring don't disappear based on employment classification. If someone you failed to screen properly causes harm, your liability remains the same regardless of whether they worked 20 or 40 hours per week.

The Fix: Establish screening protocols that apply to all individuals with access to your facilities, systems, or sensitive information, regardless of their employment status or hours worked.

Mistake 4: Taking a One-Size-Fits-All Approach

Not every position requires the same level of screening, and treating them as if they do wastes resources while potentially missing critical information. A cashier handling minimal cash probably doesn't need a credit check, but your accounts payable manager definitely does.

Conversely, you might be under-screening for positions that require specialized checks. If you hire drivers without checking motor vehicle records, or place someone in a financial role without verifying their credit history, you're accepting unnecessary risks.

Different roles have different risk profiles, and your screening should reflect these differences. A comprehensive approach means understanding what each position requires and tailoring your investigation accordingly.

The Fix: Assess each role individually to determine appropriate screening requirements. Work with investigation professionals who can customize their approach based on your specific needs rather than offering only standardized packages.

Mistake 5: Neglecting to Thoroughly Contact Previous Employers

Employment verification often stops at confirming dates and job titles, but this surface-level approach misses crucial information about performance, reliability, and potential red flags. Many employers hesitate to share detailed information about former employees, but this reluctance creates a dangerous "pass the problem" mentality.

Some of the most serious cases involve organizations that failed to dig deeper into an applicant's employment history. When previous employers don't volunteer information about performance issues, disciplinary actions, or reasons for termination, you're making hiring decisions with incomplete data.

Professional investigators know how to navigate these conversations and obtain the information you need while respecting legal boundaries. They understand which questions to ask and how to interpret the responses you receive.

The Fix: Go beyond basic employment verification. Use professional investigation services to contact previous employers and gather comprehensive information about performance, conduct, and circumstances surrounding previous job changes.

Mistake 6: Failing to Run Comprehensive Geographic Searches

Your candidate might have lived in multiple states or jurisdictions, and limiting your search to current or recent locations can miss critical information. Criminal records, civil judgments, and other relevant data might exist in places where your candidate previously lived or worked.

This mistake is particularly dangerous when hiring for positions involving vulnerable populations such as children, elderly individuals, or people with disabilities. A concerning incident in another state won't appear in your local search, leaving you with an incomplete picture of your candidate's background.

Comprehensive geographic searching requires understanding how different jurisdictions maintain records and ensuring your investigation covers all relevant locations. This complexity is why many employers benefit from professional investigation services that understand these nuances.

The Fix: Conduct searches that cover all locations where your candidate has lived or worked. Professional investigators can help ensure you're not overlooking critical information from other jurisdictions.

Mistake 7: Not Verifying Education and Professional Credentials

Resume fraud is more common than most employers realize, and failing to verify education and professional credentials can lead to hiring unqualified individuals for critical positions. Candidates sometimes exaggerate their qualifications, claim degrees they didn't earn, or list certifications that have expired or were never obtained.

This verification process extends beyond formal education to include professional licenses, industry certifications, specialized training, and continuing education requirements. Some positions require active maintenance of specific credentials, and you need to verify not just that someone obtained these qualifications, but that they remain current.

Professional investigation services have established relationships with educational institutions and licensing bodies, making this verification process more efficient and reliable than attempting it internally.

The Fix: Verify all educational credentials, professional licenses, certifications, and specialized training directly with issuing institutions. Don't assume that impressive-looking certificates are legitimate without proper verification.

How New Laws Affect Your Hiring Process

Employment law continues evolving, and staying compliant requires ongoing attention to changing requirements. The Fair Credit Reporting Act remains the primary federal regulation governing background checks, but state and local laws often impose additional restrictions.

Recent legal developments have strengthened protections for job candidates while increasing penalties for employers who fail to comply. Some jurisdictions now limit when and how you can use credit checks, restrict inquiries about salary history, or require specific procedures for handling adverse findings.

These changes mean that investigation practices that were acceptable even two years ago might now expose you to legal liability. Professional investigation services stay current with these evolving requirements and can help ensure your practices remain compliant.

Your organization needs investigation partners who understand not just how to gather information, but how to do so within current legal frameworks. They can help you balance your legitimate business needs for thorough screening with respect for candidate rights and legal requirements.

Partner With Professional Investigation Services

Background investigations have become too complex and legally sensitive for most organizations to handle internally. The risks of making mistakes—whether through inadequate screening or compliance failures—far outweigh the costs of professional services.

At Billings Private Investigation Services, we understand the challenges you face in making sound hiring decisions while protecting your organization from liability. Our experienced team provides comprehensive background investigation services tailored to your specific needs and industry requirements.

We stay current with evolving legal requirements and best practices, ensuring your screening process remains both thorough and compliant. From basic employment verification to complex investigations requiring specialized expertise, we have the resources and experience to support your hiring decisions.

Don't let these common mistakes expose your organization to unnecessary risks. Contact us today to discuss how professional investigation services can strengthen your hiring process and protect your business interests.