Understanding Informal vs Formal Background Checks: A Guide for Employers

When it comes to hiring, one critical question stands out in the realm of “informal vs formal background checks”. Should employers conduct informal or formal background checks on potential employees? Informal background checks might include a quick scroll through social media or a Google search; they’re fast and free, but can be unreliable. Formal background checks, on the other hand, involve a more systematic and legally bound approach, offering thoroughness but at a cost in time and resources. This article dives into each type’s intricacies, comparing the risks, benefits, and appropriate contexts for use within the framework of informal vs formal background checks, providing employers with a clearer picture to make informed decisions.


  • Informal background checks offer a quick, unstructured means of gathering public information about a candidate, but they lack formal verification, posing risks of bias and incomplete assessments.
  • Formal background checks, regulated by federal law, provide a structured and verified background review; they require informed consent from the candidate and comply with strict legal requirements such as the FCRA.
  • Employers should use a combination of both informal and formal background checks for a comprehensive candidate assessment, while ensuring adherence to privacy, discrimination laws, and maintaining documentation of screening processes.

The Essence of Informal Background Checks

Informal background checks are an integral part of the hiring landscape. They refer to the process of reviewing public information about a person without engaging formal background check services. These checks typically consist of:

  • Casual internet searches to find publicly available information
  • Reviewing social media profiles and posts
  • Checking online news articles or blog posts about the person

This offers an unstructured and more casual approach to gathering insights about a person’s background.

Imagine scanning through a candidate’s social media profiles or running a simple Google search. You’re conducting an informal background check. This method can reveal insights about a person’s character and conduct that you might not discover in a formal check. However, remember that such checks lack the structure and verification of formal checks, potentially influencing the hiring process.

The Scope of Informal Inquiries

Informal background checks cover a broad spectrum of public information. From a candidate’s social media presence on platforms like LinkedIn, Facebook, and Twitter, to their visibility in the press or online publications, these checks can provide a wealth of data. They can illuminate aspects of a candidate’s character, personal interests, and online conduct that might be relevant to their suitability for a role.

However, it’s important to remember that these checks are unstructured and do not follow a standardized process. They are also subject to the information that individuals choose to share online, which means they might not reveal the full picture. This is where formal background checks, with their rigorous verification procedures and legal regulations, come into play.

Risks and Benefits

With their speedy and cost-effective nature, informal background checks offer an attractive option for employers seeking quick insights about a candidate. They can provide an early alert to potential red flags that could affect a candidate’s suitability for a role.

On the flip side, an over-reliance on informal background checks can pose risks. For instance, they may lead to decisions based on incomplete or potentially biased information, as they typically lack the thorough verification process of formal checks. Hence, while informal checks can serve as a valuable tool in the preliminary stages of the hiring process, they should not be the sole basis for making final hiring decisions.

Legal Considerations

As with any process involving personal information, conducting background checks requires careful adherence to privacy and employment laws. Even when carrying out an informal background check, it’s essential to avoid infringing on an individual’s privacy or falling foul of discrimination laws.

Obtaining consent is a critical factor in compliance with the Fair Credit Reporting Act (FCRA). Furthermore, employers must not use background information to discriminate against applicants based on protected characteristics such as:

  • race
  • color
  • religion
  • sex
  • national origin
  • age
  • disability
  • genetic information

Understanding these rights regarding background checks is crucial for employers to ensure legality and avoid discriminatory practices.

Formal Background Checks Unveiled

Switching gears, let’s delve into the world of formal background checks. Unlike their informal counterparts, formal background checks are regulated by federal law, ensuring the proper use of personal information by businesses, including background checking companies and credit bureaus.

These checks are a crucial part of the hiring process, providing a more in-depth and accurate picture of a candidate’s past. They require informed consent from candidates before they can be conducted, and if adverse information is uncovered, employers must provide a disclosure. Failure to comply with these regulations can lead to serious repercussions, including:

  • Federal lawsuits
  • Legal fees
  • Settlements
  • Reputational damage

Therefore, implementing a comprehensive background check policy helps companies to perform uniform, comprehensive screening in accordance with the law.

Types of Formal Background Checks

Formal background checks come in many shapes and sizes, each serving a different purpose. At the heart of these checks are criminal records checks, which identify any violent crimes, embezzlement, or felony convictions that a potential candidate may have. A criminal background report is an essential tool in this process, and a criminal background check is a crucial component of it, as it reveals the individual’s criminal history.

Then there are fingerprint background checks, linking to the FBI’s Integrated Automated Fingerprint Identification System, which reveal detailed criminal histories crucial for sensitive roles. Credit checks assess a candidate’s financial responsibility and credit history, particularly important for positions that involve handling finances or sensitive information.

Employment verifications and reference checks, on the other hand, shield employers from hiring individuals with falsified work histories and provide insights into a candidate’s past job performance. Identity verification checks, professional license & education background checks, and motor vehicle record reports round off the list, each playing their part in painting a comprehensive picture of a candidate.

Ensuring Accuracy and Legality

In conducting formal background checks, three key elements come to the fore: legal compliance, accuracy, and thoroughness. Legal compliance mitigates the risk of negligent hiring and wrongful termination lawsuits. To ensure this, employers must obtain clear disclosure and written consent from candidates before conducting background checks, in line with the Fair Credit Reporting Act (FCRA).

Accuracy, on the other hand, is achieved by:

  • Verifying education and professional certifications directly with issuing institutions
  • Using multiple sources of information for cross-referencing
  • Conducting thorough criminal record checks at county, state, and federal levels.

Finally, thoroughness comes with consistent verification of employment references, and a comprehensive screening protocol ensures consistency and legal compliance in the background check process.

Choosing a Background Check Service

Selecting an FCRA-compliant background check service is a crucial step for employers to adhere to legal standards and federal laws during the background check process. Working with a qualified Consumer Reporting Agency (CRA) can help employers conduct FCRA-compliant background checks and avoid potential legal issues.

The chosen service must provide reports that comply with all federal and state laws, including the FCRA and ban-the-box laws, and be accredited by an industry-recognized organization like the National Association of Professional Background Screeners (NAPBS). Efficiency is also a critical consideration, as lengthy checks can risk losing candidates to other opportunities. Therefore, establishing a partnership with a trustworthy background screening provider is essential for accurate interpretation of criminal checks and compliance with fair hiring laws.

Comparing Informal and Formal Background Checks

Now that we’ve explored both informal and formal background checks, it’s time for a side-by-side comparison. Each serves a unique purpose and come with their own set of advantages and limitations.

Informal checks offer a quick, cost-effective way to gather initial insights about a candidate. However, they are not regulated by laws like the FCRA, which means they don’t require informed consent from candidates or the provision of a disclosure if adverse information is discovered.

On the other hand, formal checks:

  • Include a broad range of data
  • Undergo a thorough verification protocol
  • Are subject to legal requirements like obtaining candidate consent and providing a disclosure in the event of adverse findings.

When to Utilize Each Method

The decision to use informal or formal background checks, or a combination of both, often depends on the nature of the position and industry. Formal background checks are essential for positions involving access to sensitive material, handling financial responsibilities, or those that involve public safety, such as in finance, healthcare, and education sectors.

In contrast, informal background checks may be suitable for positions where a candidate’s public persona and online behavior directly influence their job performance, such as marketing roles. However, neglecting the formal background check process can lead to overlooking vital information and hiring candidates unsuitable for certain critical job roles.

Impact on Hiring Decisions

Background checks, whether informal or formal, can substantially impact hiring decisions. For instance, informal checks like social media screenings can uncover unprofessional behavior or discriminatory posts, potentially impacting hiring decisions with red flags not visible in formal checks.

However, the subjective nature of informal background checks can also lead to interpretations influenced by personal bias, possibly affecting hiring decisions unfairly. While they can facilitate swift hiring decisions, they often lack the detailed verification process of formal checks, thereby affecting the overall reliability of the hiring process.

Combining Both Approaches

Instead of choosing between informal and formal background checks, why not combine both for a holistic assessment of your candidates? This strategy enables employers to obtain a comprehensive understanding of the candidate, ensuring they align with company culture and meet professional standards.

Employers can strategically combine informal background checks with formal ones by initially screening a candidate’s online presence, followed by a detailed formal check as the candidate moves forward in the hiring process. Informal checks can serve as a preliminary filter to quickly eliminate unsuitable candidates before committing to the expense of formal checks.

Navigating the Background Check Process

Navigating the background check process can seem like a daunting task. But with the right steps and careful adherence to legal requirements, it can be a smooth process that plays a critical role in securing the right talent for your organization.

The standard process for a background check involves the candidate authorizing the check, providing necessary information, and the employer reviewing the completed report, typically within 3-5 business days. Continuous monitoring and post-hire screening are vital for identifying potential risks and ensuring ongoing regulatory compliance.

Obtaining Candidate Consent

A crucial step before conducting a formal background check is obtaining the candidate’s written consent. This requirement ensures compliance with laws like the Fair Credit Reporting Act (FCRA).

Employers must provide a proper disclosure and authorization form for the applicant to sign before conducting a background check, which must include the applicant’s personal information, a list of checks to be conducted, and a statement indicating that the results will be used in the hiring decision. Failure to obtain proper consent can result in costly litigation, so employers must keep the signed authorization form securely in the applicant’s file to protect against potential FCRA claims.

Conducting the Background Check

Once consent is obtained, the next step is conducting the background check. This process can include:

  • Checking a candidate’s criminal records
  • Verifying their education
  • Verifying their employment history
  • Checking their credit score

Keep in mind that ongoing monitoring and post-hire screening are also vital. These steps can help identify potential risks that might emerge after the initial hiring process and ensure ongoing regulatory compliance.

Interpreting the Results

The final step in the background check process is interpreting the results. This phase requires a careful understanding of FCRA regulations, especially if any adverse information is uncovered.

Employers need to familiarize themselves with common criminal record terms and abbreviations to interpret the results correctly. They also need to understand the difference between felony and misdemeanor charges, as this distinction can significantly affect hiring decisions. In the end, the clarity and comprehension of the results will play a critical role in making informed hiring decisions.

Best Practices for Employers

As we’ve seen, managing background checks can be a complex process, filled with numerous considerations and legal requirements. However, with the right strategies in place, employers can ensure a consistent, effective, and legally compliant hiring process.

Using automated technology and integrating a talent engagement platform with reputable background check providers can streamline the hiring process, leading to quicker hires and a better applicant experience. It’s also essential to implement background checks as a standard part of hiring procedures to create a safe environment, protect against negligent hiring, and confirm the authenticity of job applicants. Lastly, maintaining the confidentiality of the information obtained from background checks is of utmost importance.

Adhering to Equal Employment Opportunity Commission Guidelines

Compliance with Equal Employment Opportunity Commission (EEOC) guidelines is crucial for creating a work environment free from discrimination and fostering a culture where employees can thrive. Fair hiring practices require employers to:

  • Perform individualized assessments based on the nature and relevance of the offense
  • Consider the time passed since the offense
  • Ensure compliance with the FCRA and EEOC guidelines.

Developing strong policies, training employees, promoting inclusivity, and maintaining open communication are among the best practices recommended by the EEOC. Employers should consult with an experienced attorney or their local EEOC field office to ensure their policies align with both federal and applicable state EEO requirements.

Maintaining Transparency with Job Seekers

Transparency with job seekers is another best practice that employers should uphold. It’s important to inform candidates that the purpose of the background check is for the protection of:

  • employees
  • customers
  • company assets
  • the brand

Candidates must be clearly communicated about what specific elements will be checked and reassured that their personal information will be held in strict confidence. The background check process, including what it entails and how long it will likely take, should be explained to candidates.

Maintaining a positive experience for candidates post-background check includes thanking them and providing information on the next steps and processing times.

Documenting Procedures and Decisions

The last piece of the puzzle is to document all procedures and decisions related to background checks. This documentation can help protect against potential liability for negligent hiring and ensure a consistent approach to pre-employment screening and ongoing checks for current employees.

Regularly reviewing and updating the background check policy is vital to reflect changes in laws and the needs of the business.

In Closing

Both informal and formal background checks are integral tools in the modern hiring process. While informal checks offer a quick, cost-effective way to gain initial insights, formal checks provide a thorough and regulated process for deeper verification. Employers must navigate this process with care, ensuring legal compliance, accuracy, and thoroughness. By combining both methods, maintaining transparency with job seekers, and adhering to EEOC guidelines, employers can make informed hiring decisions that contribute to a safe and productive workplace.

Does it mean you got the job if they do a background check?

Undergoing a background check doesn’t guarantee that you have the job, but it does indicate that the employer is seriously considering you for the position.

Do background checks show search history?

No, background checks do not show search history as it is considered personal information and is not included in legal or ethical background checks.

What type of background check could be considered discriminatory if conducted?

Conducting criminal background checks only on applicants of a specific race or ethnicity, or treating the results differently based on the applicant’s background, is considered discriminatory and should be avoided. Discriminatory background checks violate fair hiring practices and can lead to legal repercussions.

What type of background check do most employers use?

Most employers use Level 3 background checks, which include criminal records, education verification, employment history, and reference checks, as the most popular form of background check. County criminal history searches are also commonly utilized to pull reports from court records of specific counties.

What is the difference between informal and formal background checks?

The main difference between informal and formal background checks is that informal checks involve casual internet searches and social media reviews, while formal checks are regulated by federal laws, require informed consent from candidates, and encompass a broader range of data including criminal records.

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