Start an Employment Background and Drug Screening Service

1. 1

   Learn the FCRA process cold

   Background screening for employment is governed by the Fair Credit Reporting Act. Before any check runs, the employer must give the candidate a clear standalone disclosure and get written authorization. If a report might lead to a negative decision, a pre-adverse-action notice (with a copy of the report and a summary of rights) must go out first, then a waiting period, then a final adverse-action notice. Getting this wrong carries statutory damages per violation and class-action exposure. This process is your entire value; master it before you sell anything.

2. 2

   Set up vendor relationships

   You do not build a screening database; you resell one. Sign reseller or partner agreements with a reputable consumer reporting agency (such as Checkr, Sterling, First Advantage, or GoodHire) and, for drug testing, a certified lab collection network (such as Quest Diagnostics or Labcorp). Your margin is the spread between your negotiated wholesale rate and your client price, so volume pricing matters.

3. 3

   Build compliant forms and a documented workflow

   Create the standalone disclosure, the written authorization, and the pre- and post-adverse-action notice templates, and document the exact sequence and timing. This paperwork is what protects the client and justifies your fee. It should be reviewed by an attorney familiar with FCRA before you use it.

4. 4

   Know the state and local overlay

   Ban-the-box and fair-chance laws in many states and cities restrict when in the hiring process a check can be run and how criminal history can be used, and EEOC guidance calls for individualized assessment rather than blanket exclusions. You need to know the rules in every state where your clients hire. This complexity is exactly what employers pay you to handle.

5. 5

   Handle DOT and regulated drug testing correctly

   For DOT-regulated employers (transportation, aviation, pipeline, transit) drug and alcohol testing follows strict federal protocols including random testing pools, return-to-duty processes, and Medical Review Officer oversight. If you serve these clients, you must run the regulated process precisely; if you do not, be clear about that boundary. Non-DOT testing is simpler but still needs chain-of-custody discipline.

6. 6

   Sell speed plus compliance

   Two things win this business: turnaround and correctness. When your screening comes back in 24 to 48 hours and is provably compliant while a competitor takes a week and cuts corners, you win the account. Target employers with 50-plus staff who handle their own hiring but have no dedicated compliance person, and lead with the risk they do not know they carry.

7. 7

   Price per screen and per package

   Charge a per-candidate fee that layers your service margin on top of the vendor cost, with tiered packages (basic criminal, comprehensive multi-search, drug panel add-ons). Bill monthly on completed screenings. Volume with your vendors improves your spread on every order.

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Best for: HR, recruiting, or compliance-minded operators who will get the FCRA process exactly right, every time

Not for: Not for anyone who will treat the FCRA and adverse-action steps as red tape to shortcut; a single skipped notice can cost a client real money and end your business. Not for people who want to compete purely on price against online check mills. And not for someone unwilling to keep up with a shifting patchwork of state and local screening laws, because that vigilance is the service.