Risks of skipping pre-hiring background checks and how to avoid them

Pre-hiring background checks confirm that a candidate is who they say they are and that their record, credentials and work history match what they told you. Skipping them saves a few days, but it leaves you open to negligent hiring claims, fraud, fake candidates and regulatory breaches. Running them badly carries its own legal risk, so the goal is a check that is consistent, consented and fair.

TL;DR: This guide explains what pre-hiring background checks cover and the six biggest risks of skipping them, from negligent hiring lawsuits to the rise of fake candidates. It then shows why a badly run check can be as costly as no check, walks through the legal steps in order, and explains where background checks sit next to identity and skills checks so you verify both a candidate's past and their ability to do the job.

What are pre-hiring background checks?

Pre-hiring background checks are reviews of a candidate's history that an employer runs before a hire becomes final, usually after a conditional job offer. A typical check confirms identity, searches criminal records, and verifies past employment, education and professional licences. Some roles add credit, driving record or drug screening where the law allows it.

Most US employers use a consumer reporting agency to run the checks. Once a third party compiles the report, the Fair Credit Reporting Act (FCRA) applies, which sets rules on disclosure, consent and how you act on what you find. The FTC's guide for employers lays out those rules, and the EEOC adds that any check must be used without denying equal opportunity. For a short definition, see the background check glossary entry.

What do pre-hiring background checks include?

Pre-hiring background checks include a set of searches you pick by role, not one fixed report. A cashier, a nurse and a finance controller need different checks. The table below maps the common check types to what each one confirms and the risk it reduces.

Our guide to background checks covers each type in more depth, and the reference check best practices post covers the questions to ask.

What are the risks of not performing background checks?

The risks of skipping pre-hiring background checks fall into six groups: negligent hiring liability, fraud and theft, fake credentials, fake or proxy candidates, regulatory breaches and unsafe workplaces. Each one can cost far more than the check itself, and several of them, such as a fraud loss or a safety incident, cannot be undone once they happen.

The scale is not small. In HireRight's 2025 Global Benchmark Report, a survey of more than 1,000 HR, risk and talent acquisition professionals, more than three in four businesses said they found candidate discrepancies in the previous 12 months. The most common were undisclosed criminal convictions and gaps between claimed and real education or employment.

1. Negligent hiring claims

Negligent hiring is a claim that an employer knew, or should have known, that an employee posed a risk and hired them anyway. If that employee harms a customer, patient or coworker, the injured person can sue the employer as well as the employee. Courts look at what a reasonable check would have found for that role.

Skipping a check for a role with access to vulnerable people, homes or money makes that claim much harder to defend. Our negligent hiring glossary entry explains the legal test in plain terms.

2. Fraud, theft and insider data risk

Fraud and theft risk rises when people with access to money, customer data or systems are not screened. A past conviction for fraud is not proof of future fraud, but for a payments role or a database administrator it is information you are expected to weigh. Jamie Kohn, a senior research director in Gartner's HR practice, put it sharply in 2025: "Candidate fraud creates cybersecurity risks that can be far more serious than making a bad hire."

3. Fake credentials and inflated experience

Fake credentials are the most common thing a check uncovers. Degree mills, invented job titles and stretched employment dates all show up in the HireRight data above. In licensed fields such as nursing, accounting and engineering, an unverified licence is not just a bad hire. It can put patients, clients and your own licence to operate at risk.

4. Fake or proxy candidates

Fake candidates are a newer risk and a fast-growing one. Gartner predicts that by 2028, one in four candidate profiles worldwide could be fake, and in its 2025 survey of 3,000 job seekers, 6% admitted to interview fraud such as having someone else interview for them (HR Dive report on Gartner's research). HireRight's survey found one in six businesses had already seen ID fraud in hiring, and three in 10 more were not sure.

A post-offer background check catches some of this, but by then the fake candidate has passed every interview. Identity checks need to start earlier, which the section on sequencing below covers.

5. Regulatory breaches

Regulatory breaches follow when a role legally requires screening and the check is skipped or incomplete. Healthcare, financial services, childcare, education and transport all have role-specific screening rules set by law or by licensing bodies. Missing one can mean fines, failed audits or loss of a contract, on top of the hiring risk itself.

6. Unsafe workplaces, team trust and turnover

Unsafe workplaces are the risk employees feel first. A hire with an undisclosed history of violence or harassment puts coworkers and customers in danger, and the people who leave first are often your strongest performers. Even when nothing dramatic happens, a bad hire costs time, money and morale; our breakdown of the cost of a bad hire shows where that money goes.

Key takeaway: Skipping a check rarely saves more than a few days, while the losses it invites are often permanent. Decide which checks each role needs once, in writing, so no recruiter has to make that call under deadline pressure.

Is a badly run background check riskier than none?

A badly run background check can be as costly as skipping one, because the FCRA and anti-discrimination law govern how you check, not just whether you do. Most employer lawsuits over background checks are not about what a check found. They are about missing consent forms, missing notices or policies that screen out protected groups.

• Statutory damages add up fast: Under FCRA section 1681n, a willful violation carries damages of $100 to $1,000 per person, plus punitive damages and attorney fees. Across thousands of applicants, a single faulty form becomes a class action.
• Disclosure forms are a frequent target: In April 2025, a federal judge in California reviewed a proposed $1.3 million settlement covering 29,628 applicants over a disclosure that was not clear and stand-alone (JDP case summary).
• Blanket criminal-record bans invite discrimination claims: The EEOC position is that a criminal-record policy must be job related and consistent with business necessity, and checks must be applied the same way to everyone.
• Fair chance laws limit timing: NELP's fair chance tracker lists 37 states with fair chance rules for public jobs and 15 that extend them to private employers, plus many cities and counties. California's Fair Chance Act bars employers with five or more employees from asking about conviction history before a job offer.

Pro tip: Audit your disclosure form before you audit your vendor. The form must be a stand-alone document with no liability waiver or extra legal text, and it is the single most common reason employers end up in FCRA litigation.

How do you run pre-hiring background checks legally?

Running pre-hiring background checks legally means following the same seven steps, in the same order, for every candidate in a role. The steps below follow the FTC and EEOC guidance for US employers. Check state and city rules too, and get legal advice for roles in regulated industries.

1. Write a screening policy: List which checks apply to which roles and why each one is job related.
2. Make a conditional offer first: Some fair chance laws, such as California's, require it, and it keeps criminal history out of early screening.
3. Disclose and get written consent: Give a stand-alone disclosure and get the candidate's written permission before ordering any report.
4. Run the checks through a compliant provider: Certify to the provider that you followed the FCRA and will not misuse the report. Our list of background check software for HR compares options.
5. Review each result case by case: Weigh how serious the offence was, how long ago it happened and how it relates to the job.
6. Send a pre-adverse action notice: If the report may change your decision, send a copy of the report and the FCRA summary of rights, and give the candidate time to respond or correct errors.
7. Make the final decision and notify: If you withdraw the offer, send an adverse action notice naming the provider and explaining the right to dispute. Store and later dispose of reports securely.

Most checks come back within a few business days. Delays usually come from county court searches, international records or past employers that are slow to confirm dates.

Where do background checks fit in the hiring process?

Background checks fit near the end of the hiring process, after a conditional offer, while identity and skills checks belong at the start. That split matters more now that fake and proxy candidates are common. If identity is only confirmed after the offer, a fraudulent candidate has already used your recruiters' and interviewers' time.

A sensible order looks like this:

• At application and first assessment: confirm identity, test job skills and check for cheating.
• At interviews: confirm the same person turns up, and probe the experience the candidate claims.
• After a conditional offer: run the pre-hiring background checks your policy sets for the role.
• Before day one: complete right-to-work and any role-specific regulatory checks.

Testlify does not run background checks, but it covers the earlier half of this order. Candidates take role-specific skills tests from a library of 3,500+ tests, with 20+ proctoring checks such as photo ID verification with face match, webcam snapshots, tab tracking and AI assistance detection running during the test. See anti-cheating and proctoring for how each check works.

What do pre-hiring background checks miss?

Pre-hiring background checks miss anything that is not on a record. A clean report shows that a candidate has no relevant convictions and that their stated history is real. It says nothing about whether they can write the code, run the payroll or calm an angry customer, and a first-time offender will pass every check.

That is why the strongest hiring processes pair a background check with direct evidence of skill and judgment. A structured integrity test adds a view of how a candidate approaches honesty and rules at work, and skills tests from the Testlify test library show whether they can do the job. For how these pieces fit into one screening stage, see our guide to pre-employment screening.

In my work with hiring teams, the gap I see most is not a missing background check. It is a process where the background check is the only verification step, so teams learn about a skills mismatch months after a clean report cleared the hire.

Frequently asked questions (FAQs)

Bottom line

Skipping pre-hiring background checks trades a few days of speed for exposure to negligent hiring claims, fraud, fake candidates and regulatory breaches. Run the checks each role needs, after a conditional offer, with stand-alone consent and the full notice steps. Then close the gap a background check cannot cover by verifying identity and skills early, with tests from the Testlify test library and proctoring built into every assessment.