Employee Background Checks in India

Employee background verification is an essential part of the hiring process. There are multiple resume fraud cases registered every year. Therefore, an employee background check in India is a compulsory step employers follow while onboarding candidates. For the last few years, resume fraud cases in India have increased from 20% to 40%, especially in the IT, finance, and consulting sectors.

Background checks in India are equally essential and safeguard for your company. If you plan to hire employees from India, this guide blog will help you understand the necessary steps you need to take with relevant information.

Legal requirements for employee background check in India

While no law prohibits or mandates employee background checks in India, several legal aspects and regulations govern how employers can conduct and utilize them. Here’s a breakdown of the key points

General regulatory framework

• Information Technology Act, 2000 (IT Act) & Information Technology (Reasonable Security Practices and Procedures and Sensitive Personal Data or Information) Rules, 2011 (SPDI Rules): These regulate the collection, storage, transmission, and use of personal data, including sensitive personal data (SPD) like financial information, health records, and biometric data.
• Supreme Court, India, Judgement on Privacy, declared privacy a fundamental right, setting stricter data collection and processing guidelines.

Key requirements for background checks

• Consent: Employers must obtain written informed permission from candidates before conducting any background checks involving SPD.
• Purpose limitation: The purpose of the background check must be legitimate and relevant to the job, and employers cannot collect more data than necessary.
• Data security: Collected data must be stored securely and accessed only by authorized personnel.
• Disclosure and accuracy: Employers must disclose the type of information collected during the check and allow candidates to review and rectify any inaccuracies.
• Fairness and non-discrimination: The background check process must be fair and not discriminatory based on protected characteristics like religion, caste, or gender.

Types of background checks in India

Several types of background checks are commonly conducted in India, depending on the nature of the job and the employer’s requirements. Here’s a breakdown of the most frequent ones

1. Identity verification

• Aadhaar card verification: Verifies the candidate’s name, address, and photograph against the national database.
• PAN card verification: Confirms the candidate’s tax identification number and basic information.
• Voter ID verification: Authenticates the candidate’s citizenship and address through the electoral roll.

2. Educational qualification verification

• Direct verification from institutions: Contact the candidates’ educational institutions to confirm the authenticity of degrees and diplomas.
• Online verification platforms: Utilizing official databases like the Digital Universities Consortium (DUC) for instant verification.

3. Employment verification

• Contacting previous employers: Reaching out to former employers to confirm dates of employment, job titles, responsibilities, and reasons for leaving.
• Salary slip and reference check verification: Examining salary slips and contacting references provided by the candidate.

4. Criminal record check

• Police verification: Obtaining criminal history information from the relevant police authorities, usually limited to severe offences.
• Public court record search: Accessing publicly available court records for specific details.

5. Other checks

• Credit report check: Primarily for positions with financial responsibilities, with the candidate’s consent.
• Drug test: For safety-sensitive jobs or based on company policy.
• Social media screening: Only with specific justification and data privacy adherence.

List of background checks in India that are illegal

In India, there isn’t an explicit “list” of illegal background checks, as no single law dictates what kinds of information employers can or cannot gather when vetting potential employees.

Instead, the legality of a background check rests on multiple factors and regulations related to data privacy and personal information.

Here’s an overview of what employers should avoid

Unrelated information

• Collecting data irrelevant to the job or qualifications: Gathering information like caste, religion, political affiliation, marital status, family details, or medical history beyond what’s necessary for specific roles (e.g., health-related occupations) is typically deemed unlawful.
• Excessive social media monitoring: While employers can check professional pages relevant to the position, extensive personal social media surveillance without valid justification or candidate consent is intrusive and potentially illegal.
• Financial records: Accessing a candidate’s financial records without explicit consent for specific purposes (e.g., fraud prevention) is unlawful.

Unfair and discriminatory practices

• Checks based on protected characteristics: Using background checks to discriminate against candidates based on factors like gender, race, religion, caste, nationality, disability, or age is strictly prohibited.
• Unvalidated or biased sources: Relying on unverified information or sources with inherent biases can lead to discriminatory practices.
• Lack of transparency and consent: Not obtaining written informed consent from the candidate before conducting background checks involving sensitive personal data (SPD) is illegal.

Additional points

• Employers must disclose the type of information they intend to collect during the check and allow candidates to review and rectify any inaccuracies.
• The background check process must be fair and comply with data security regulations outlined by the Information Technology Act and the Information Technology (Reasonable Security Practices and Procedures and Sensitive Personal Data or Information) Rules.

When employers need background checks in India

In India, background verifications start only after onboarding confirmation but before releasing the offer letter to the employee.
To start the verification process, getting the consent and the disclosure from the employee is compulsory. Disclosure forms keep the employers safe in case employees raise any issues in the future.

Background checks mistakes in India

Background checks in India can be a valuable tool for employers but can also lead to problems if not conducted properly. Here are some common mistakes to avoid

Consent and data privacy

• Not obtaining written informed consent: This is a fundamental requirement for collecting sensitive personal data, and neglecting it can lead to legal consequences.
• Collecting more information than necessary: Focus on data relevant to the job and avoid gathering unnecessary personal details like caste, religion, or medical history.
• Storing data insecurely: Ensure proper data security measures are in place to prevent unauthorized access or breaches.

Verification and accuracy

• Relying on unverified sources: Double-check information from previous employers, educational institutions, and other sources to ensure accuracy and legitimacy.
• Ignoring discrepancies: Don’t dismiss inconsistencies in the candidate’s information without investigation. Give the candidate a chance to explain and provide clarification.
• Biased or discriminatory practices: Avoid using background checks to discriminate against candidates based on protected characteristics like gender, religion, or caste.

Background checks in India are a daunting task. There are multiple factors involved for consideration. Before releasing the offer letter, you need to take care of all the measures.

Or you can do it more systematically with the help of a platform – Global Squirrels.

How does Global Squirrels help with employee background checks in India?

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Step 2: Request your requirements, select the candidates and interview them

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Step 4: Once you are satisfied with the candidate’s background verification data, the platform helps you generate an offer letter

The easy-to-use platform also helps calculate compensation and manage leave sheets, attendance sheets and other payroll-related activities. You can avail of all assistance at $199/employee/month + payroll cost.

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Bottomline

Ultimately, whether or not to conduct an employee background check in India should be made on a case-by-case basis, considering the specific role, potential risks, and legal requirements. By weighing the factors mentioned above and following responsible practices, employers can utilize background checks effectively to make informed hiring decisions while protecting candidate privacy and complying with data protection regulations.