We almost hired a bookkeeper last year who looked perfect on paper. Two references, clean interview, asked smart questions about our chart of accounts. The background check came back with a fraud charge from 2019 she hadn't mentioned. We moved on the same afternoon.
I hear the same pushback from owners with 12 or 15 employees: we know everyone, we don't need that. You do. A basic background check runs about $30 to $75 per person through a service like Checkr or GoodHire. That's roughly two hours of the new hire's salary. There is no version of this math where skipping it makes sense.
Run them on every role, not only the ones touching money. The receptionist has keys to your office. The warehouse hire knows when the building is empty. The salesperson has your customer list on their laptop within a week. "Trust but verify" is the entire job of an owner once you're past ten people, and the verify part costs less than lunch.
For a 15-person company, I keep it tight. County criminal records for the last seven years. National sex offender registry. SSN trace to confirm the person is who they say they are. Employment verification for the last two jobs — not five, two. If the role touches money or driving, add credit and motor vehicle records respectively. That's it. You don't need a private investigator package for a $55,000 office role.
Timing matters. Run the check after a conditional offer, never before. Running pre-offer creates legal exposure around adverse action and discrimination claims in most states, and it wastes money on candidates who'll decline anyway. Your offer letter should say the offer is contingent on a satisfactory background check and reference verification. One sentence. Your attorney should look at the language once and then you reuse it forever.
The adverse action process. If something shows up and you decide not to hire, federal law (FCRA) requires you to notify the candidate, give them a copy of the report, and give them a window to dispute it before you finalize the decision. Most small business owners I know either don't know this exists or hope nobody notices. The fines are real and the lawsuits are worse. Your screening vendor will handle the paperwork if you turn the feature on. Turn it on.
One more thing: ban-the-box rules vary by state and city, and so do rules about what you can ask and when. This is a five-minute call with an employment attorney, not a Google search at 11pm. Talk to your attorney before you write your offer letter template, not after a candidate complains.
If you're building out a hiring process for the first time and want a second set of eyes on the offer letter, the screening workflow, or the adverse action steps, send us a note. This is the kind of cleanup that's much cheaper before the bad hire than after.
— Amanda @ SBATC
