The easy guide to employee background checks in India

Published

May 3, 2023

When hiring employees in India, background checks are a crucial step for verifying a potential employee’s credentials, as resume fraud is widespread.

  • In 2012, one in five CVs of Indian employees in the IT sector were believed to have false or misleading information.
  • According to a more recent 2021 Global Benchmark Report by HireRight, 70% of hirers found discrepancies in Indian candidates’ employment histories.

In addition to flagging dishonest work experience histories, background screenings can also help eliminate the risks of bringing on a potential threat to your company.

But for global companies, navigating the background check process can be daunting. You need to know what's allowed under Indian laws, including how you're obligated to handle and store your employees' sensitive data.

If you're looking for a guide to running comprehensive and legally compliant employee background checks in India, you've come to the right place—read on to learn more.

Table of Contents

  • Are you legally required to run background checks on Indian employees?
  • It isn’t mandatory to run background checks on employees in India.
  • Is it legal to run background checks on Indian contractors?
  • What types of background checks do businesses run on Indian employees and contractors?
  • What types of background checks are illegal in India?
  • When should you conduct background checks for Indian employees?
  • The easiest way to run a background check on an Indian employee or contractor
  • Background check mistakes to avoid in India
  • Frequently asked questions about background checks in India

Are you legally required to run background checks on Indian employees?

It isn’t mandatory to run background checks on employees in India.

Employers are allowed to request information about job applicants that is relevant to the position, including criminal background checks, education verification, and employment history.

Employers need to obtain informed consent from job applicants before conducting background verifications. It’s the employer’s responsibility to protect the applicant’s personal information and maintain confidentiality, and use the information gathered only for legitimate purposes.

Is it legal to run background checks on Indian contractors?

Provided you have the contractor’s consent, yes—it’s legal to run background checks on contractors in India.

What types of background checks do businesses run on Indian employees and contractors?

In India, you can conduct different types of pre-employment screenings, based on a new hire's role. Here are some of the most common background checks you can consider:

  • Criminal record checks. Indian employers can look into a prospective hire’s criminal history by examining public court records. You can contact local police stations for this, or look at available cases online through the Indian government’s National Crime Records Bureau.
  • Employment history. You can contact the human resources or payroll departments of a new hire's previous employers to verify their dates of employment, salary, and reason for leaving.
  • Reference check. You can contact any references provided by a new hire and ask about job performance in their previous employment.
  • Work authorization. You can ask for proof that a new hire is legally allowed to work in India. This may be proof of citizenship or a work visa.
  • Education history. Employers can contact educational institutions to request graduation dates, information on the course of study, and degree or diploma obtained.
  • Credit reports. Employers can use a prospective hire’s PAN card to run a credit check to verify credit history and outstanding debts. Credit checks are common for candidates in finance, but are seldom run in other fields.
  • Social media profiles. Employers can look through any public social media information a new hire has posted. They can ask to access private profiles, but applicants are not required to comply.

What types of background checks are illegal in India?

Background checks should adhere to privacy rules established by India’s Information Technology Act. Employers need consent to collect and store sensitive personal data including:

  • Financial information
  • Health conditions and medical records
  • Sexual orientation
  • Fingerprints (and other biometric information)
  • Passwords

India also has Sensitive Information Rules that require a company to publish and distribute information regarding how they’ll handle any privacy data it collects.

When should you conduct background checks for Indian employees?

Indian employee background checks should be conducted as part of the pre-employment screening process, typically after a conditional offer of employment has been made to a job applicant.

Employers should also provide written notice to the job applicant that a background check will be conducted and obtain their written consent.

The easiest way to run a background check on an Indian employee or contractor

There are several different companies and screening services that can run background checks on employees in India, including Rippling, Sterling RISQ, and HireRight.

The easiest by far is Rippling, because background checks are directly integrated into the onboarding flow. Just enter basic hiring info like salary and start date, and Rippling does the rest:

…and everything else they need from day one. See Rippling today.

Background check mistakes to avoid in India

  • Collecting too much data. It’s crucial for employers to mind India's privacy laws and how they emphasize minimum data collection. This means only collecting the data that's necessary for you to have for the new hire's role.
  • Not getting employee consent. India's privacy laws also require employers to obtain consent from applicants before beginning the verification process. Indian companies must also be upfront with candidates about what data they are using to run their background check, who their personal information is being shared with, and why.
  • Not getting ISO 27001 certification. This designation is part of the global Information Security Management System (ISMS) that gives best practices for handling sensitive data and lessening the risks of a security breach.
  • Skipping the background check. A successful employee screening process guarantees you hire an honest candidate most suitable for your role.

While the process can seem complicated and time-consuming, Rippling makes it easy to run background checks in India.

Frequently asked questions about background checks in India

Are background checks legal in India?

Yes, background checks are legal in India, provided they are conducted in compliance with Indian privacy laws and other applicable regulations.

How do privacy laws affect background checks in India?

India’s regulations outlaw the excessive collection, use, and disclosure of sensitive personal information. To adhere to India’s privacy protections during pre-employment screenings, you should make sure to:

  • Only collect candidate information relevant to the role.
  • Let the prospective employee know what information you’re gathering and why.
  • Obtain written consent.
  • Not share your new hire’s data.

How should Indian employers consider criminal history revealed from a background check?

Employers must be careful not to use criminal history information to make blanket disqualifications of applicants. They must also ensure that criminal history information is only considered when relevant to the job requirements, as people with a criminal record are a protected class under Indian human rights law.

Which industries demand the biggest need to run background checks?

Background checks are less common in India than in other countries. But you should run one if your prospective hire is dealing with any sensitive or complex information that requires proper, specialized training. It’s also important for employees who work with children or other vulnerable populations with special needs.

During the hiring process, you should run screenings for workers in:

  • Finance
  • Healthcare
  • Legal services
  • Construction
  • Education
  • Government Services
  • Energy and Utilities
  • Any other field that requires a special certification

What are the benefits of running background checks in India?

Background checks come with many benefits for employers, including:

  • Enhanced security. Background checks can help filter out job applicants who would pose a threat to the company or its employees.
  • Protection against negligent hiring. Companies can be held responsible for hiring employees who later engage in public misconduct. Background checks reveal past misconduct, helping mitigate this risk.
  • Better hiring quality. Background checks help filter out candidates with discrepancies or inconsistencies in their work or educational backgrounds. They verify that applicants are who they say they are, and that their stated qualifications are accurate.
  • Protection from occupational fraud. Background checks protect your company's reputation by helping avoid dishonest and fraudulent job seekers.

Onboard new hires and run background checks with Rippling

With Rippling's Talent Management System, you can seamlessly onboard new hires and set them up for success. Just enter basic hiring info like salary and start date, and Rippling does the rest—including running a legally compliant background check and e-verifying the results.

Ready to hit the ground running with every new hire? See Rippling today.

Rippling and its affiliates do not provide tax, accounting or legal advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for tax, legal, or accounting advice. You should consult your own tax, legal, and accounting advisors before engaging in any related activities or transactions.

last edited: July 13, 2023

The Author

Jackson Knapp

Jackson is a writer from DC, based in Los Angeles. For Rippling, he writes about the global workforce and specializes in hiring trends in Australia, India, the Philippines, and Japan.

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