Question: Should I do a background check before hiring an employee and if so, how do I do that?

Answer: No, it’s not required, but, yes, do some form of background check on potential employees to ensure you are getting a person who will be a good fit for the business.

The cost of hiring and training employees is too high not to at least call references, the easiest form of background check. That can be as simple as calling references and previous employers, checking criminal records or doing a full investigative consumer report. Care needs to be taken not to violate privacy rights, so it’s important to know the rules beforehand. Information on what is allowable and what is not can be found at,, or by contacting your business attorney.

Many companies use outside agencies for a thorough pre-employment background check. This is definitely an option, but be sure to check on the credibility of the agency. What experience does it have? What resources does it use? Is it a reputable business?

Here are some questions to ask the screening company:

• Do you follow Federal Credit Reporting Act and applicable state and federal laws?

• Will you provide guidance about the proper use of the screening information?

• Will you provide the proper forms and seek the required permission from job applicants?

• How will you investigate any inaccurate information or handle a complaint by a job applicant?

Due to the complexity of human resources issues, legal requirements, time needed to process payroll and the tax reporting requirements for employers, many small businesses choose to use an employee leasing agency, payroll processing company or temporary employment agency to handle hiring, background checks, payroll processing and tax reporting.

Hiring good employees is worth the effort to do some form of background check, even if you just call references and previous employers.

(Arlene M. Soto is the director of the Southwestern Business Development Center. To ask a question call 541-756-6445, e-mail, or write 2455 Maple Leaf, North Bend, OR 97459. For more information, visit