What is a pre-employment background check?

A pre-employment background check is a screening process used by employers to verify a job candidate’s identity, employment history, criminal record, and other relevant information before officially hiring them. The goal is to ensure that the person you're about to bring onto your team is trustworthy, qualified, and a good fit for your business.

For small business owners, background checks can be a vital tool in reducing risk, especially when employees will handle cash, sensitive customer data, or operate without constant supervision. Homebase simplifies the hiring process and helps you stay compliant by keeping all applicant documentation, notes, and communication in one place—even as you evaluate candidates and conduct checks.

Why background checks matter for small businesses

In small teams, a single hire can have a big impact. If the wrong person is brought on board, it can lead to theft, customer complaints, lost productivity, or legal problems. Background checks help you make more informed hiring decisions and create a safer, more reliable workplace.

A background check can help you:

• Protect your customers and employees
• Reduce legal and financial liability
• Verify work and education history
• Uncover potential red flags early
• Build a more trustworthy team

What’s included in a background check?

Not all background checks are the same. The level of detail and the areas reviewed can vary depending on the provider, the role, and legal regulations in your state.

Here are the most common components:

• Identity verification: Confirms the candidate’s legal name, Social Security number, and address history.
• Criminal background check: Searches for misdemeanors, felonies, or other offenses. These checks are typically run at the county, state, and federal levels.
• Employment history: Verifies the candidate’s previous jobs, titles, and dates of employment. Some checks also include reasons for leaving.
• Education verification: Confirms degrees, diplomas, and other credentials.
• Driving record (MVR): Important for delivery drivers or any role involving company vehicles.
• Credit check: Less common in hourly roles, but may be relevant for positions that involve financial responsibility. Note: this requires written consent and has stricter legal requirements.
• Drug testing (optional): Some employers require a drug screening as part of the hiring process, though it’s less common in hospitality and retail.

Always tailor your background checks to the nature of the job—and stay compliant with state and federal laws.

Legal requirements and compliance

Background checks are regulated by laws designed to protect job candidates’ rights. Small businesses must follow these steps to stay compliant:

• Get written consent – You must obtain written permission from the candidate before running a background check. This is a legal requirement under the Fair Credit Reporting Act (FCRA).
• Provide clear notice – If you plan to use information from a background check to make a hiring decision, you must inform the candidate.
• Give a copy of the report – If you choose not to hire someone based on the results, you must provide them with a copy of the report and a summary of their rights.
• Allow time for a response – Candidates have the right to dispute inaccurate or incomplete information before you take final action.
• Avoid discrimination – You must apply background checks consistently and avoid using them in ways that could disproportionately affect protected groups.

States and cities may also have “ban the box” laws that restrict when and how you can ask about criminal history—so be sure to check your local regulations.

When should a background check be run?

Timing is important. Background checks should usually be conducted after a conditional job offer is made, but before the employee starts working. This avoids unnecessary screening costs and legal complications.

The general process looks like this:

1. Post the job and interview candidates
2. Make a conditional offer to your chosen candidate
3. Get written consent and run the background check
4. Review results and make a final hiring decision
5. Provide required notices if you rescind the offer

Best practices for small businesses

• Use a trusted screening provider – Avoid manual searches or DIY methods
• Be consistent – Apply the same screening standards across similar roles
• Keep results confidential – Limit access to sensitive information
• Focus on job relevance – Only consider information that affects job performance or safety
• Document your process – Maintain records of consent and communication

How Homebase helps streamline hiring and onboarding

Homebase makes it easier to move from applicant tracking to onboarding without missing a step. You can organize all candidate documentation, communicate with your team about each step, and track where candidates are in the hiring pipeline.

With Homebase, you can:

• Post jobs and track applicants in one dashboard
• Digitally collect onboarding documents, like tax forms and consent waivers
• Coordinate background checks as part of the hiring workflow
• Send offer letters and onboarding tasks seamlessly
• Store hiring records securely for compliance

Explore Homebase Hiring and Onboarding to simplify your hiring process, protect your business, and build a stronger team from day one.