A Complete Guide to Employee Background Checks in India

Integrating employee background checks into your hiring process is crucial in India, even though they aren’t legally mandated across all sectors. However, they are particularly common in IT, banking, finance, healthcare, education, and government organizations. Employers looking to tap into India’s rich talent pool must carefully conduct thorough background checks. Overlooking this step could lead to problems similar to those faced by major companies like Accenture and Cognizant, where a lack of thorough employee verification resulted in the termination of employees with fake credentials. By prioritizing candidate screening, companies can avoid such pitfalls and make more informed hiring choices.

Here’s everything you need to know about conducting employment background checks in India

In this blog, we will answer all of your questions. We know you have some queries, which are mentioned below!

• Why are employee background checks important?
• How does companies do background check in India?
• Are background checks legal in India?
• How is an employee background check done?
• Who is the best background check company?

Let’s help you in finding the right answers!

What is an Employee Background Check in India?

An employee background check is the process of verifying the professional and personal history of potential candidates or employees to confirm the authenticity of the details they provide and determine their fit for particular positions. Through employee background checks, companies gather important information, such as criminal records, academic credentials, professional experience, and other factors that might affect job performance or the organization’s reputation.

Candidate screening helps mitigate risks and promotes a trustworthy and safe workplace environment. Conducting employee background checks in India has become a crucial step for companies aiming to hire trustworthy individuals who align with their company’s standards and requirements.

Is It Legally Mandatory to Conduct Employee Background Checks in India?

In India, organizations have no general legal requirement to perform background checks on employees across most industries. However, there are specific industries where background verifications are required, like banking, finance, IT, healthcare, and government services strongly emphasize employee background checks due to the sensitive nature of their operations and regulatory requirements.  Moreover, organizations often decide to perform employment background checks as a regular part of their hiring process to mitigate risks, ensure safety in the workplace, and maintain their reputation.

However, organizations need to comply with the regulations established by the Information Technology Act, 2000 and the Personal Data Protection Bill, 2019 to ensure they are following the law.

Before conducting employment background checks, employers should obtain consent from the individual and handle personal information with the utmost care and confidentiality. While the law does not specifically require it, written consent is advisable for proper documentation and compliance reasons.

Types of Employee Background Checks in India

Companies perform various types of employee background checks to verify that candidates are trustworthy, qualified, and fit for the positions they are applying for.  Below are some of the most common employee background verifications and screening that companies may consider:

• Identity Verification: This involves confirming the candidate’s identity using documents such as a driver’s license, Aadhaar card, passport, or PAN card.
• Educational Verification: With the growing number of fake academic universities, it is a must to verify the authenticity of a candidate’s educational qualifications. This process involves confirming the candidate’s academic qualifications, including degrees, diplomas, and certifications obtained from educational institutions.
• Employment History: Here, the candidate’s past employment details are verified, including job roles, job responsibilities, duration of employment, and reasons for leaving previous employers. Employers frequently reach out to previous employers to confirm these details.
• Criminal Record Check:  Verifying if the candidate has any criminal records or ongoing criminal cases through background check services or police verifications.
• Address Verification: Verify the accuracy of the candidate’s residential information by checking utility bills, or other official documents.
• Reference Checks: Reach out to the candidate’s former workplace (e.g., supervisors, peers, managers) to get information on the candidate’s work performance, skills, and character.
• Credit History (for Financial Roles): Review the candidate’s financial stability, loan repayment, and credit score, especially for positions in banking, finance, and accounting.
• Professional License Verification: Verifying specific certifications or licenses for positions that require candidates to have professional licenses to perform their work, such as driving permits or medical licenses.
• Drug and Alcohol Testing: Employers conduct drug screening to verify that candidates are physically capable and can perform their jobs without any impairment, especially for safety-sensitive roles like those in the manufacturing or transportation industries. 
• Social Media Screening: Reviewing a candidate’s social media profiles to assess the candidate’s online presence and professionalism. This is more common in roles that require strong public interaction​

There are legal restrictions on the information that can be gathered during an employee background check in India. Companies need to follow these rules to maintain privacy and ensure compliance.

How To Choose a Background Check Company in India?

Each business has unique hiring and screening requirements, making it essential to select a Background check provider tailored to your specific needs. Here’s a step-by-step guide to help you choose the best background verification company for your business in India:

1. Understand Your Business Needs

Assess your hiring needs by considering factors such as the hiring volume, the size of your company, the specific requirements of your industry, and your budget. Decide if you require fundamental checks like identity and employment verification, or if you need more comprehensive services such as criminal background checks, address verification, and education validation.

2. Focus on Compliance

Select a background check company that follows Indian data privacy regulations, like the Information Technology Act, 2000, along with other relevant labor regulations. This will help ensure ethical screening practices and lower legal risks.

3. Turnaround Time

Conducting timely background checks is essential for effective hiring. Choose a company that has a strong track record of providing accurate results without compromising on the quality of verification.

4. Customizable Screening Services

A reliable background verification company should provide customizable packages that cater to the specific needs of your business, including checks that are relevant to particular industries or job positions.

5. Accuracy and Reliability

The provider must employ rigorous verification processes to ensure the information they provide is both precise and reliable. Errors in background checks can affect hiring decisions and employee trust.

6. Reputation and Reviews

Research the company’s reputation by reading reviews, case studies, and client feedback. Established companies with a solid track record in India’s diverse job market tend to be a more reliable option.

7. Cost-Effectiveness

While it’s essential to consider affordability, it’s equally important not to sacrifice quality. Take the time to compare pricing structures and the services provided to ensure you’re getting the best value for your investment.

8. Technology and Automation

Look for background verification companies with advanced technology, such as digital consent forms, mobile-friendly workflows, and real-time tracking. Integrating these services with HRMS or ATS systems can help streamline your processes.

By considering these factors, you can partner with a background check company in India that helps you build a trustworthy and compliant workforce.

Why Companies Should Consider Performing Employee Background Checks in India?

Why is background verification important?

There are many reasons why is it important to conduct employee background checks in India.

1. Reducing Turnover Costs

Hiring candidates who resonate with the company’s values and the specific job roles can decrease the chances of early turnover, leading to better retention and lower recruitment costs.

Screening candidates reduces the chances of hiring unsuitable employees, leading to a more stable and committed workforce.

2. Risk Mitigation

Conducting background checks is essential for minimizing the risks associated with hiring unsuitable candidates. By checking credentials, employment history, and criminal records, employers can prevent hiring individuals who may have a track record of fraud, theft, or other problematic behaviors. This process helps to lower the risk of security breaches, financial losses, or workplace disruptions. Studies show that 70% of candidates provide false or misleading information on their resumes, making background checks a crucial tool for mitigating hiring risks.

3. Positive Brand Image

A background verification (BGV) helps companies avoid hiring candidates who might damage their reputations, especially those involved in financial fraud or unethical practices. Businesses that conduct Background checks in their hiring process are seen as responsible and trustworthy employers, which can improve their reputation and build trust among clients, partners, and employees. 

4. Maintaining a Safe Workspace:

Creating a safe work environment should be a primary concern for any employer. By conducting background checks on employees, especially criminal records and other relevant checks, companies can avoid hiring individuals with violent backgrounds, which could threaten the safety and well-being of other employees. 

5. Legal Compliance

Certain industries, such as finance, healthcare, and IT, require businesses to conduct employee background checks in India to comply with industry-specific regulations. For example, the Reserve Bank of India (RBI) mandates background checks for employees in financial institutions to prevent fraud. Failing to conduct proper background checks could result in legal consequences, regulatory fines, and reputational damage.

6. Improved Quality of Hire

By conducting thorough background screening on potential employees, companies can hire the right candidate for the role. Employment background checks offer a clearer understanding of a candidate’s qualifications, past employment, and personal integrity. This not only confirms that the individual is qualified but also ensures they fit well with the company’s culture and values. Employers can avoid hiring individuals who might later be found to have misrepresented their skills or experience.

7. Gaining Competitive Advantage

In today’s highly competitive market, businesses that partner with the best background verification companies can truly stand out from the crowd. These organizations set themselves apart in the market by maintaining the highest levels of integrity, trust, and reliability within their workforce. By prioritizing comprehensive employee background checks, companies show their dedication to transparency, quality, and safety, making themselves the top choice for clients, investors, and exceptional talent.

8. Preventing Fraud and Misrepresentation

One of the key reasons for conducting employee background screening is to avoid fraud and misrepresentation. Candidates sometimes provide inaccurate or even fabricated information about their education, work history, or criminal records to boost their chances of landing a job. By verifying these details, employers can ensure that they select only honest and qualified candidates. This practice helps to prevent financial losses and damage to reputation that could arise from hiring dishonest employees. A 2023 study by SHRM (Society for Human Resource Management) found that as many as 50% of resumes contain false information, which can only be revealed through a comprehensive background verification process.

When Should You Conduct Employee Background Checks in India?

Running employee background checks in India is most effective when done during the pre-employment screening process or after a conditional offer letter has been issued. This process helps ensure that candidates possess the necessary qualifications and align with the company’s standards and requirements, while also protecting against potential risks. Additionally, periodic background checks can be beneficial for industries that manage sensitive data or operate in high-security environments.

What is the Process of Employee Background Check in India?

There are several background screening firms in India, such as SpringVerify, that can help you verify all details smoothly. Here’s a step-by-step approach to conducting employee background checks:

1. Candidate Consent:

Once a potential candidate is selected, it’s important to inform them about the background verification process. Keeping the candidate aware of this step ensures they are ready to provide the necessary information and documents. Being transparent about this process is crucial, as accessing someone’s details without their consent can lead to privacy violations and legal issues.

2. Information Collection:

To start the background check, background check companies ask the candidate to submit the following documents:

• A government-issued ID with an address (Aadhar card, Driver’s license, or Voter ID)
• Final year academic mark sheet
• Relevant educational certificates
• Offer and experience letters from previous employers
• Reference contact details from past workplaces
• Social media profiles link

After gathering the required documents, follow these steps to verify the candidate’s information:

3. Data Verification:

• Confirm the educational qualifications by reaching out to the relevant institutions.
• Contact previous employers to validate the candidate’s work history, including roles and duration.
• Search national and regional criminal databases, including the National Crime Research Bureau, CBI’s Most Wanted, and the defaulters list from RBI and SEBI. Also, check public court records from district and Supreme courts.
• Review the candidate’s social media activity for any potential red flags, such as inappropriate behavior, discriminatory comments, or signs of substance abuse.

4. Final Result:

Once the background screening process is completed, update the candidate on the results. If there are any discrepancies, ask the candidate for clarification. If the verification is successful, you can move forward with the next steps in the recruitment process.

How Can SutraHR x SpringVerify Help With Background Checks in India?

SutraHR’s partnership with SpringVerify offers businesses a seamless solution for both recruitment and employee background checks in India. By integrating SpringVerify’s fast and reliable verification platform into SutraHR’s recruitment services, companies can now recruit top talent while ensuring the candidates meet all necessary verification standards.

SpringVerify provides essential background checks, including criminal record verifications, educational qualifications, and employment history, typically within 48 hours. With certifications like SOC 2 Type II and ISO 27001, SpringVerify guarantees that the process is secure and adheres to industry standards. This integration streamlines the hiring process, cuts down on manual work, and helps businesses make informed decisions faster, ultimately improving the overall onboarding experience.

Through this partnership, SutraHR offers a comprehensive solution that saves time and minimizes the risks associated with hiring unverified candidates, which is crucial for businesses looking to grow efficiently and securely. 

If you’re seeking a reliable and experienced background verification company in India, contact us today. 

Frequently Asked Questions

1. Is background verification done for contract employees?

Background checks can indeed be performed on contractors and freelancers in India. However, it’s crucial to inform the candidate before carrying out these checks. Not securing consent may lead to legal repercussions for the employer.

2. Which company is best for background verification?

SprinVerify stands out as one of the top background check companies in India. They offer quick, reliable, and precise background checks to help maintain a secure workplace. With a support team available around the clock, you can swiftly receive answers to your questions. Make well-informed hiring choices with this highly regarded background verification service

3. What kind of background check do most companies run?

Typically, businesses in India perform various types of employment background checks. These checks often include criminal record verification, employment history verification, education, and professional qualification verification, as well as identity and address verification. Companies may also conduct reference checks. Depending on the industry and role, companies might additionally perform drug testing, credit history checks, and social media screenings. 

4. How much time does background verification take in India?

Background verification in India generally takes around typically takes 7 to 15 business days. This timeframe can vary based on the complexity of the checks and the responsiveness of the sources involved. Each background verification is different, therefore it may take 3-5 days for one candidate while it could take longer for another.

5. What types of background checks are illegal in India?

In India, certain types of background checks are considered illegal, including those related to caste, religion, sexual orientation, and medical history, unless they are directly relevant to the job. Employers need to be careful not to violate privacy by asking for personal information that isn’t related to job performance. Moreover, conducting checks without consent or using dishonest methods is prohibited. 

6. Is BGV done after the offer letter?

Yes, Background Verification (BGV) is typically conducted after the offer letter is issued but before the candidate’s final onboarding. It ensures that the candidate’s qualifications, experience, and background align with the company’s requirements. 

7. List of Top 10 Employee Background Verification Companies in India.

Here is the list of the top background verification companies in India, known for their reliability, accuracy, and comprehensive services:

• SpringVerify
• AuthBridge
• Millow
• Helloverify
• First Advantage
• IDFY
• iChek
• Quinfy
• Equal Connect
• ZippedScript

8. What will happen if background verification fails?

If an employee does not pass the background check, they could be terminated and placed on the No-Hire list, meaning they would be ineligible for future employment with that organization. Furthermore, if you apply for a job and do not pass the background verification, the employer could disqualify your application without any notification.