Does Unemployment Show Up on a Background Check?

A background check can be a nervy time for any applicant. Even if you know there’s no logical reason to worry, our brains lead us down dark paths to completely illogical conclusions. Another layer of anxiety we often come across is whether unemployment shows up on a background check and whether this might raise red flags. 

In short, however, it’s a no. Background checks typically focus on verifying past employment, criminal history, and sometimes credit but won’t flag time spent away from employment. Let’s take a closer look at this. 

What Information Can Unemployment Offices Disclose?

All information held by unemployment offices is private and confidential, meaning that whatever a person’s status is or has been and what benefits they might have received cannot be disclosed to third parties. 

However, if an employee conducts an in-depth background check with employment verification, it will almost certainly show gaps in job history that might cause an employer to ask some questions. 

Can Employers Still Find Out if a Candidate Was Unemployed?

Employers are often keen to examine a candidate’s employment timeline to gauge their level of experience and expertise and assess how quickly they move from job to job. Generally, steady employment over several years is preferable to somebody who changes jobs every six months, but that’s up to the employer to assess. 

If there are holes in the employment history and the applicant makes no attempt to explain it on their resume, an employer will likely inquire, especially if the application is for mid- to high-level positions. Employers like to see a nice, smooth work history, preferably one that shows development over time, and unexplained gaps—however innocent they might be—are usually enough for employers to want to find out why. 

Should Gaps in Employment Be a Red Flag?

Unemployment isn’t necessarily the red flag of doom that many people assume it to be. While unemployment bias still remains, it’s significantly less than in the past. Sometimes, people take a little time to redirect their careers, care for a loved one, or simply take a little break after a particularly stressful working period. 

The key is to be honest, open, and upfront about any gaps in employment history. If the gap can be clearly explained, and shown it wasn’t simply laziness, the interviewer may even react positively.

How Much of an Employment Gap Is Acceptable?

There’s no magic number here, and it usually depends on why the employment gap exists. If someone took two years out to care for a dying relative, it’s hard to imagine many employers seeing that as a negative. However, if they took two years to get back into work after a particularly stressful work period, that might raise some questions. 

The current unemployment rate in the U.S. is 4.1% – although many believe that figure to be much higher because of how unemployment is assessed. The reality is that millions are unemployed for countless reasons, but that shouldn’t be seen as an immediate negative.

It all boils down to context. What was the reasoning behind the employment gap, and how can it be explained clearly and convincingly to a potential employer? Candidates should be upfront about gaps in employment on resumes. 

A person doesn’t necessarily have to list “unemployed,” but can include details about freelance work, volunteer activities, or even personal projects worked on during that time. Showing that they used your downtime productively can help shift the conversation in the candidate’s favor.

Final Thoughts

Employers cannot legally access information about unemployment. However, they can add two and two to get a rough idea of employment history and where gaps might exist. It’s important to remember that unemployment gaps aren’t necessarily red flags as long as they can be explained, so candidates should be upfront when applying for a job instead of hoping it might slip through the net. Unemployment is a natural part of life and shouldn’t be viewed with the same stigma as in the past. 

If you’re an employer looking to be sure that background checks are carried out accurately and comprehensively, look no further than ScoutLogic. We provide thorough background checks, including employment verification, criminal history, education verification, and much more, to ensure you have the best possible person for the job. 

David Garcia

David Garcia, co-founder and CEO of Scout Logic, is an industry leader in the bulk background check world. With his strategic acumen and expertise in the HR sphere, specifically in hiring, recruiting, legal compliance, background checks, and resume screening, he’s an invaluable asset and consultant.

David's counsel extends across the boards of ScoutLogic, YipitData, and Supplier.io, drawing from his impactful stints on the boards of Infutor and Avetta. With an extensive 25-year journey, he champions unparalleled B2B commercial leadership within data & analytics, significantly shaping the HR landscape.