A Guide to Employee Background Checks in Australia

Employee background checks should be an integral part of your hiring process in Australia. Although not mandatory, they are a common practice, especially in education, healthcare, finance, banking, security, law enforcement, government, and the public sector.

Australia is known for its strong economy, highly skilled workforce, and business-friendly legal environment, making it an attractive location for international companies looking to expand in the APAC region. However, the growing skill gap in Australia, especially within sectors like technology, underscores the critical need for thorough employee background checks.

This due diligence not only ensures the right match for skill-specific roles but also fortifies the employer's standing in maintaining a compliant and secure working environment.

That’s why in this article we’ll cover:

• How to run an effective and legal employment screening in Australia
• What are the common types of employee checks in Australia
• Step-by-step process of a thorough employee screening
• What mistakes to avoid when performing a background check in Australia

What should employers know before running a background check in Australia?

An employee background check is the process of verifying a potential hire’s work history, education, professional qualifications, and any criminal records they might have. It’s particularly beneficial to run before finalizing an employment offer or signing a contract, ensuring the candidate meets the company's standards and requirements. 

In Australia, employee background checks are conducted under the framework of the Privacy Act 1988, while the Australian Information Commissioner (OAIC) oversees privacy issues, including those related to employee screening.

• Privacy Act 1988 regulates how personal information can be collected, used, and disclosed by organizations. This includes the handling of personal data during the background checking process for potential or current employees. Organizations must ensure that any personal information collected for background checks is relevant, and obtained lawfully, and the individuals are informed about the collection and its purpose. Additionally, the Act mandates the secure management of this information to protect individuals' privacy rights
• The Office of the Australian Information Commissioner (OAIC) is an independent agency of the Australian Government, acting as the national data protection authority for Australia. It has a wide range of responsibilities including privacy protection, freedom of information oversight, and government information policy functions. The agency is dedicated to upholding individuals' rights to access government-held information and ensuring the protection of personal information.

Are background checks legal in Australia?

Background checks are legal in Australia, but they must be conducted in compliance with the Privacy Act and other relevant laws. 

Employers must obtain consent from the individual before conducting a background check, and the information gathered must be relevant to the individual's suitability for the role. Failure to adhere to these regulations can result in legal ramifications for the employer, including fines and reputational damage.

What types of background checks are illegal in Australia?

In Australia, certain types of background checks are restricted or considered illegal due to privacy and discrimination laws. Global employers should stay clear of:

• Conducting checks on spent convictions (previously convicted individuals who have not reoffended) is prohibited except in specific circumstances 
• Using genetic information or conducting checks based on race, religion, or sexual orientation is considered discriminatory and is, therefore, unlawful 
• Unless it's highly relevant to the role, accessing an individual's credit history can be seen as an invasion of privacy. Roles that typically justify such checks include positions in finance and banking where financial responsibility is crucial
• While verifying the legal right to work is standard, delving into an individual's nationality or birthplace can be discriminatory

In Australia, the penalties for violating privacy laws, particularly in contexts like background checks, can be quite severe. Organizations can face fines up to AUD 50 million, three times the value of any benefit obtained from the violation, or 30% of the entity's adjusted turnover during the breach period, depending on which amount is greatest. This is outlined under the civil penalty provisions in the Privacy Act, which include serious or repeated interferences with privacy​.

Common background check industries in Australia

In Australia, many sectors perform background checks on employees to maintain workforce integrity and dependability. Background screenings are especially common in industries such as:

• Education: Background checks are crucial in the education sector, especially for roles involving contact with children. Criminal history checks and working with children clearances are often mandatory
• Healthcare: Healthcare organizations prioritize background checks to ensure the safety of patients and the integrity of the healthcare system. This includes thorough credential verifications and criminal history checks
• Finance and banking: Given the sensitive nature of financial information, the finance and banking sectors frequently conduct financial history checks and stringent employment verifications
• Government and public sector: Background checks are integral to maintaining the integrity and security of government institutions and public services. This includes comprehensive checks for security clearances and criminal history
• Security and law enforcement: These industries require rigorous background checks, including criminal history, character assessments, and psychological evaluations, to ensure the suitability of candidates for roles involving public safety

Types of background checks in Australia

Effective employment screening in Australia covers essential aspects to evaluate a candidate's abilities. Knowing these areas helps employers tailor screening processes to meet job requirements and legal standards.

Background check mistakes to avoid in Australia

Whether you’re hiring employees or contractors in Australia, there are a few things you shouldn’t do as an employer when it comes to background checks:

• Failing to obtain consent: Conducting a background check without the individual's consent violates privacy laws and can result in legal consequences for the employer
• Discriminatory practices: Using information from background checks to discriminate based on race, religion, or other protected attributes is unlawful and can lead to discrimination claims
• Neglecting to verify qualifications: Failing to validate the educational and professional qualifications of a candidate can result in hiring unqualified individuals, posing risks to the organization
• Inadequate record-keeping: Poor documentation of the background check process can lead to compliance issues and challenges in case of disputes or legal inquiries
• Overlooking spent convictions: Conducting checks on spent convictions without legal authorization can lead to breaches of privacy laws and potential legal repercussions

A step-by-step guide to employee background checks in Australia

Employers looking to recruit talent in Australia should treat the list of steps as a guideline, to ensure legal and effective employee background checks.

1. Obtain consent: Before commencing a background check, employers must obtain written consent from the individual. This consent should outline the specific checks that will be conducted and how the information will be used
2. Verify identity: Confirm the individual's identity using reliable documents such as a passport or driver's license to ensure that the background check pertains to the correct person
3. Check criminal history: Conduct a criminal history check through the Australian Criminal Intelligence Commission (ACIC). This check is essential, especially for roles that involve working with vulnerable populations or handling sensitive information
4. Verify qualifications: Verify the educational and professional qualifications claimed by the candidate through direct contact with the educational institutions or relevant licensing bodies
5. Verify employment history: Contact the candidate's previous employers to validate their employment history, job responsibilities, and performance
6. Check references: Reach out to the provided references to gain insights into the candidate's work ethic, skills, and suitability for the role
7. Check financial history: While not common, some roles may require a financial history check, especially for positions involving financial responsibilities or access to sensitive financial information
8. Check the right to work: Verify the candidate's right to work in Australia, ensuring compliance with immigration laws and regulations
9. Screen social media: Conduct a responsible and lawful review of the candidate's publicly available social media profiles to assess their professional conduct and reputation
10. Document and report: Document the findings of the background check and ensure that the process complies with the Privacy Act. Provide the individual with a copy of the report and allow them to address any discrepancies

You can also automate this process using Deel, and get a fast employee background check, with results coming in a matter of minutes.

Run employee background checks with Deel

There’s no need for HR to log into yet another platform or manually chase documents. With screenings in over 200 countries and territories (and counting), for employees and contractors, you can manage background checks for global hires with a single source of truth without leaving the Deel platform.

Are you looking for an easy and safe way to run a background check? It only takes minutes to get results with Deel.