An individual who unexpectedly loses his job can typically file for unemployment insurance compensation to help him get by until he finds another source of income. If you are currently receiving unemployment, you may worry that it will prevent you from being hired. However, in most cases, unemployment insurance claims don't appear on employer background checks.
About Background Checks
Employers typically perform background checks on a potential employee to verify the validity of the information he provided on his employment application. Background checks typically contain information about the applicant's driving records, medical records, workers' compensation claims, credit history and criminal history. Credit and criminal history is especially important for jobs in the financial services industry. Background checks also screen your Social Security number, court records, education information, bankruptcy, neighbor interviews, character references, drug test records, past employers and property ownership.
Under federal law, employer background checks can't show bankruptcies the individual filed more than 10 years ago, civil judgments, lawsuits and arrest records that occurred more than seven years ago, paid tax liens entered more than seven years ago and most other negative information that is more than seven years old. However, criminal convictions can appear on the report indefinitely. Although unemployment insurance claims don't usually appear on the report, there is no law that prohibits the information from appearing, nor is there a law preventing employers from using such information for hiring decisions.
Although most background checks don't list unemployment insurance claims explicitly, they usually list past employers and dates of employment. Employers may also ask you how long you have been unemployed and if you filed for unemployment insurance compensation. They may also ask your previous employers about the nature of your discharge. Finally, potential employers may learn that you are receiving unemployment compensation by contacting your personal references or viewing your social networking profiles.
Some employers consider your credit report when deciding whether to hire you, but collecting unemployment insurance compensation won't damage your rating. Receiving unemployment insurance compensation won't typically prevent you from obtaining new work. However, some employers may hesitate to hire an individual who has been unemployed for a long period, whether or not he is currently receiving benefits.