What is pre-employment screening? Types, steps, and considerations for employers

Making the right hire matters for every business, but the stakes can feel higher when you have a small team. One role can shape your daily workflow, your customers' experience, and your budget. Not to mention, plenty of owners find hiring hard. According to the QuickBooks Small Business Insights survey, 34% small businesses said hiring was a challenge.

Pre-employment screening can make one part of that process more manageable. It gives you a consistent way to verify job-related information before making a final decision, so you can hire with more confidence.

This guide explains what pre-employment screening means, which types of checks exist, why employers use it, what laws apply, and how to run the process in a fair, legally sound way.

What is pre-employment screening?

Pre-employment screening is a set of checks an employer uses to verify a job candidate's information before making a final hiring decision. In this guide, screening typically takes place after interviews, once you've identified a candidate you're seriously considering for the role.

Screening is broader than a single background check. A pre-employment background check is one method you might use, but screening can also include reference checks, skills assessments, and verification of work history or licenses. The checks you choose should relate to the role.

Types of pre-employment screening

The most common types of pre-employment screening include identity and work authorization verification, criminal background checks, employment and education verification, reference checks, skills assessments, driving record checks, credit checks, and drug testing. Not every role calls for every check. The table below can help you match the right type to the right situation.

Identity and work authorization verification

Before running any optional screening, you'll verify that a candidate is authorized to work in the United States. This is done through Form I-9, which all U.S. employers are required to complete for every new hire. The I-9 process, governed by the U.S. Citizenship and Immigration Services (USCIS), is separate from consumer background reports and applies to every employee regardless of citizenship status.

Always verify current I-9 and E-Verify requirements directly with USCIS before completing this step.

Criminal background checks

Employers may review certain criminal-history information when it's lawful and relevant to the job. When and how you can use that information may be limited by federal, state, or local law, including rules about when you're allowed to ask.

A past record doesn’t automatically disqualify a candidate. Many states have ban-the-box or fair-chance laws that restrict how and when criminal history comes into play. Review the rules for every jurisdiction where you hire, and consider working with a qualified consumer reporting agency (CRA) to stay on the right side of those requirements.

Our guide on how to do background checks walks through this in more detail.

Employment and education verification

Employers may confirm a candidate's work history, education, licenses, certifications, or professional credentials. Keep these checks tied to the position. For example, verify a required license for a licensed role rather than checking credentials the job doesn't use.

Reference checks

Reference checks allow you to contact a candidate's professional references to learn more about their work history, responsibilities, and job-related strengths. To keep the process fair and defensible, ask every reference the same set of questions. Consistency matters for both accuracy and legal compliance.

Skills and aptitude assessments

Job-related skills assessments can help you evaluate whether a candidate has the technical or practical ability to perform the specific tasks required for the role. Common examples include coding tests for a developer role or a writing sample for a content position.

Assessments won't predict future performance with certainty, and no test eliminates risk entirely. Use them consistently across candidates for the same role, ensure they're accessible, and tie them directly to actual job requirements.

Driving record and license checks

A driving record or professional license check may matter when driving or a valid license is part of the job, such as a delivery or commercial driving role. For commercial drivers, review the current requirements from the Federal Motor Carrier Safety Administration (FMCSA) or the appropriate state licensing authority.

Credit checks

Credit checks may be relevant for roles that involve direct financial oversight, cash handling, or access to sensitive accounts. However, many states and localities restrict or prohibit their use for positions where financial history isn't directly tied to the job. Credit checks are not appropriate for most roles.

If you’re considering a credit check, confirm it’s lawful in your jurisdiction and relevant to the position’s requirements. When obtaining a report through a third-party provider, follow the Fair Credit Reporting Act (FCRA), including providing a clear, standalone written disclosure, obtaining the applicant’s written permission, and following required notice procedures before and after taking an unfavorable hiring action based on the report.

Pre-employment drug testing

Pre-employment drug testing rules vary widely by state, locality, role, and industry. Some safety-sensitive positions in regulated industries may have specific drug and alcohol testing requirements set by federal agencies. Other states have expanded protections for employees, particularly around marijuana, that affect what testing is permissible and how results can be used.

Don't build a drug-testing policy based on assumptions. Verify current federal and state requirements for your industry and location before including testing in your process.

Why do employers use pre-employment screening?

Employers screen candidates to make fair, informed hiring decisions based on job-related facts. Screening can't guarantee a good hire or remove all uncertainty, but it can support a consistent, well-documented process.

Screening may help you:

• Verify job-related qualifications and experience
• Support workplace and customer safety
• Meet requirements for certain regulated roles
• Apply the same hiring criteria to every candidate
• Spot discrepancies that may just need a simple clarification

The goal is confident, consistent hiring, not fear. A screening report is one source of information, and it works best alongside interviews, references, and your own judgment about the role.

Pre-employment screening laws and compliance

Pre-employment screening laws depend on the type of check you run and on where your business and your candidate are located. There's no single nationwide process, so review the rules for every place you hire and for the specific checks you use.

Fair Credit Reporting Act

The Fair Credit Reporting Act (FCRA) is a federal law that may apply when you use a third-party consumer reporting agency to run a background check. An FCRA background check isn't limited to credit history; it can cover criminal records, employment history, and more.

Under the FCRA, employers generally must give the candidate a separate, standalone disclosure, get written authorization, and follow specific adverse-action steps before and after deciding not to hire based on a report. These steps are detailed and easy to get wrong, so confirm the current requirements with the Federal Trade Commission (FTC) and the Consumer Financial Protection Bureau (CFPB).

Anti-discrimination laws

Your screening criteria shouldn't be applied in a way that discriminates against candidates based on protected characteristics. The Equal Employment Opportunity Commission (EEOC) offers guidance on using background information fairly. Keep your criteria job-related and apply them consistently to everyone considered for the same role.

State and local requirements

Fair-chance and ban-the-box laws, credit-check limits, drug-testing rules, and timing and notice requirements vary by state and city. A process that's fine in one location may not meet the rules in another. Check the requirements in every location you hire.

Privacy and data security

Candidate information, like Social Security numbers, financial records, and background check results, should be shared only with the people who genuinely need it and stored securely. Avoid retaining more personal information than necessary.

There’s no single universal retention period for all screening records. Your obligations will depend on applicable federal and state laws, any agreements with your screening provider, and your own company policies. When you're ready to bring someone on board, connect your screening records to the rest of your new hire paperwork process and make sure everything is stored and disposed of appropriately.

How the pre-employment screening process works

A consistent pre-employment screening process protects both you and your candidates. Here's a step-by-step overview.

Step 1: Define the role and relevant checks

Start by reviewing the job description. What tasks will this person perform? What risks are associated with the role? Choose only the checks that are relevant to the job and lawful where you hire. Avoid running every available check by default. More is not better when screening isn't tied to the job.

Step 2: Create consistent screening criteria

Decide in advance how you'll evaluate job-related information, and put it in writing. Apply the same criteria to every candidate for the same role. When possible, have a qualified professional review your process.

Step 3: Provide required notices and obtain authorization

The notices and authorization you need depend on the type of screening you're running. For any consumer report obtained through a third-party CRA, verify current FCRA disclosure and written authorization requirements with the FTC before proceeding. FCRA disclosures must be provided separately. Don't combine them with other onboarding paperwork unless current law explicitly permits it.

Step 4: Run the selected checks

Use a reputable, FCRA-compliant screening provider for any consumer reports. Before committing to a provider, confirm their data sources, dispute resolution process, compliance support, and turnaround times. A good provider can make the process much smoother, but be aware that using a screening vendor doesn’t transfer your legal obligations as an employer to them.

Step 5: Review results in context

Look at each finding in relation to the job. One item in a report may not tell the full story, and records can sometimes be incomplete or incorrect. Where required or appropriate, give the candidate a chance to explain or dispute the information before making a decision.

Step 6: Follow required adverse-action steps

If you plan not to hire someone based on a third-party report, the FCRA generally requires specific notice and timing steps, including sharing a copy of the report and a summary of the candidate's rights. These steps are detailed, so verify the current requirements with the FTC before you act.

Step 7: Document the decision and protect records

Use the criteria you set earlier to keep hiring decisions consistent. Document the process without collecting more personal information than you need, protect candidate data, and follow the record retention and disposal rules that apply to your business.

For more information on what comes next, check out our guide on how to hire employees and prepare for onboarding.

Pre-employment screening best practices

Use this checklist to keep your process focused, consistent, and legally sound.

• Choose checks based on the role, not habit
• Write down your screening criteria before you review any reports
• Apply the same criteria consistently to all candidates for the same position
• Obtain all required disclosures and authorizations before starting any third-party check
• Use a reputable, FCRA-compliant screening provider
• Review results carefully rather than relying on pass/fail summaries alone
• Give candidates a fair opportunity to address errors or discrepancies
• Protect candidate data—limit access to people who need it
• Check federal, state, and local requirements regularly, as laws change
• Train everyone involved in screening and hiring on your written policy
• Document the process and decisions without collecting unnecessary personal information
• Have your screening policy reviewed by a qualified employment attorney

How QuickBooks Workforce helps

Hiring comes with a lot of moving parts, from candidate details and screening steps to offer letters, new hire paperwork, and employee records. Keeping everything connected can make the process easier to manage, especially when you don’t have a dedicated HR team.

With the Workforce Premium + Plus bundle, QuickBooks offers hiring management tools that support applicant tracking, digital offer letters, and an automated I-9 process from collection through storage. QuickBooks Workforce also integrates with Checkr within the recruiting workflow, so cleared candidate information can move into onboarding with less duplicate data entry.

Ready to simplify hiring and team management? Explore QuickBooks Workforce to see how it can help you move from candidate to new hire with a more connected process.