What Can Cause a “Failed” Background Check? What Employers Should Know

Sadie . March 11, 2024

When hiring new employees, it is essential to carry out a comprehensive background check. It helps employers bring trustworthy, safe, and qualified individuals on board. However, not all background checks come back clean, and employers need to understand the warning signs of a “failed” background check. This article will explore the common issues that can lead a background check to fail and what employers should do when encountering these issues. We will also discuss how Vertical Identity, a leading employment background check provider, can assist employers in conducting compliant and reliable background checks.

12 Common Warning Signs On a “Failed” Background Check

Workplace and Customer Safety

Ensuring workplace and customer safety is a top priority for employers. The following issues found on a background check might implicate workplace safety concerns:

Certain Criminal Convictions

Not all criminal convictions indicate that an applicant is unqualified for a position. However, certain convictions should warrant further scrutiny. These include:

  • Assaults
  • Domestic violence crimes
  • Sexual crimes
  • Drunk driving convictions for driving positions
  • Violent crimes
  • Theft
  • Embezzlement
  • Robbery
  • Burglary
  • Murder

It’s important to assess the relevance and recency of the conviction to determine its impact on job duties and workplace safety.

Poor Driving Record

For positions involving driving, applicants with a poor driving record can threaten public safety. Employers should consider the applicant’s driving history, especially if the Department of Transportation regulates the position. Safety records of drivers for the previous three years should be confirmed to ensure compliance with regulations. The employer should follow an Adverse Action protocol if an applicant’s driving record is disqualifying.

Failed Pre-Employment Drug Screen

A failed pre-employment drug screen raises safety concerns. Employers conduct drug screenings to check for recent substance use, including THC/marijuana, cocaine, opiates/opioids, phencyclidine (PCP), amphetamines/methamphetamines, MDMA, and others as required. Failing a drug test indicates potential risks if the applicant is hired.

Reliability, Consistency, and Trustworthiness

Employers want to hire people who are reliable, consistent, and trustworthy. The following background check issues can raise concerns in these areas:

Multiple Periods of Unemployment

While a single period of unemployment is not uncommon, multiple gaps in employment history may indicate unreliability or inconsistency. Employers should dig deeper to understand the reasons behind these gaps and assess the applicant’s overall reliability.

Inconsistencies in What the Applicant Reported vs. the Background Check

Inconsistencies between an applicant’s claims on their resume and the information revealed in the background check should be carefully evaluated. Dishonesty about work history or education can raise concerns about the applicant’s trustworthiness.

Short Periods of Employment

Applicants with a history of multiple short periods of employment at different jobs may not be a reliable choice. Employers prefer candidates who demonstrate stability and commitment to previous employers. Hiring individuals with a documented history of short job tenures can lead to higher turnover rates and related costs.

Qualifications and Experience

Evaluating an applicant’s qualifications and experience is essential to ensure they are suitable for the job. The following warning signs may indicate a lack of qualifications or relevant experience:

Lacking Relevant Past Jobs

If an applicant’s employment verifications reveal a lack of relevant work experience, they may not be the right fit for the position. While some transferable skills can compensate for a lack of direct experience, employers should carefully evaluate whether the applicant’s overall qualifications align with the job requirements.

Inadequate Education/Training

Certain positions require applicants to have specific degrees, diplomas, or certifications. Some individuals may exaggerate their education or training to secure employment. Conducting an education verification can help determine whether an applicant possesses the necessary qualifications. If an applicant lacks the required diploma, degree, or certificate, the employer may choose to deny employment.

License/Credentials Issues

Certain jobs necessitate licenses or certifications under state regulations. Verifying an applicant’s professional license or conducting sanctions checks can reveal whether their credentials are valid, expired, suspended, or revoked. If an applicant’s license or credentials are not in good standing, they may not be eligible for the position.

Legal Compliance and Liability Risks

When reviewing background check results, employers must consider legal compliance and potential liability risks. The following warning signs raise concerns in these areas:

Job-Related Convictions

A background check that reveals an applicant has a conviction directly related to the job duties can create legal liability risks for the company. For instance, hiring an applicant with a recent conviction for fraud or theft as a bookkeeper could pose a risk of potential embezzlement. Employers should carefully assess the potential risks associated with hiring individuals with job-related convictions.

Refusing a Background Check

If an applicant declines to consent to a background check, it could suggest that they are withholding information. Employers have the legal right to rescind conditional employment offers based on an applicant’s refusal to undergo a pre-employment background check.

Poor Credit History or Bankruptcies

While many states limit the consideration of credit checks for employment, certain exceptions exist for roles involving finance, banking, insurance, law enforcement, or access to intellectual property or funds. Indicators of an applicant’s financial distress, such as unpaid accounts, a high debt-to-income ratio, recent bankruptcies, or a poor payment history, can raise concerns about the potential risk of fraud or theft if hired.

Failed Drug Screen

Regulated industries like transportation and healthcare may require pre-employment drug screening. Failing a Department of Transportation (DOT) drug screen or a pre-employment screen for positions involving medication access results in denial of employment.

I’ve noticed an issue with a Background Check: What Should I Do Next?

Encountering an issue on a background check doesn’t automatically disqualify an applicant. Employers should follow these steps to ensure fair and compliant decision-making:

Can Consider the Issue?

Before deciding based on negative information from a background check, employers should ensure that the issue is relevant and permissible for consideration in the hiring process.

Individually Assess Criminal Information

If an applicant has a criminal conviction, employers should individually assess the conviction in relation to the job being considered. Factors to consider: the recency of the conviction, any mitigating evidence, and the potential impact on workplace safety.

Send a Pre-Adverse Action Notice

If the employer opts not to hire the applicant due to negative information, they should issue a pre-adverse action notice. This notice should clearly identify the problem and provide a copy of the report where the information appears.

Give a Reasonable Time to Respond

The applicant should be given around five business days to respond to the pre-adverse action notice. During this time, they can provide evidence to refute the information or demonstrate rehabilitation.

Send a Final Adverse Action Notice

If, after considering the applicant’s response, the employer still decides not to hire them based on the negative background check information, a final adverse action notice should be sent. This notice should include a copy of the applicant’s rights under federal and state law.

Employers must follow federal, state, and local laws when making adverse hiring decisions based on information obtained from a background check.


A “failed” background check can reveal critical information employers must consider before hiring. Employers can protect their businesses, employees, and customers by being aware of the warning signs and taking appropriate action.

Remember, conducting background checks in compliance with federal and state laws is essential. By partnering with a reliable background check provider like Vertical Identity, employers can ensure accurate and reliable information for making informed hiring decisions.


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