News Reporter | NUPIAO
Excessive background checks are creating a new barrier in the job market.
On the evening of July 19, NUPIAO reported that a job seeker, Mr. Wang, passed two rounds of professional interviews with a major tech company (let’s call it “Company D”) and received an official offer. But then, he hit a wall during the third-party background check, and the company ultimately rescinded his employment.
The whole mess started because of a traffic accident lawsuit from years ago that was already settled. Back in 2023, Mr. Wang rented a car and got into a collision. The traffic police said it was his fault. Since his insurance didn’t cover the full amount, the injured party sued him and the rental company. By October 2024, a court ruling was handed down, and Mr. Wang paid the remaining 84,000 yuan in compensation. The case was closed with no record of bad credit or court-ordered restrictions.
To Mr. Wang, this old lawsuit had nothing to do with the tech development job he was going for. But the background check firm, “Company L,” found the court record and flagged it as a medium-risk “yellow light” in their report. Based on that, Company D backed out of their hiring promise.
On July 20, NUPIAO contacted a background check firm called “Liechacha” as a potential employer. When asked what they can check, a customer service rep said it depends on the company’s needs. They can even look into lawsuits, including divorce cases, but usually only if the candidate gives permission.
That same rep also stressed that they review everything before issuing a report. If the candidate disagrees, they can talk to the hiring company.
Liechacha’s website claims that based on their experience, 36% of orders have fake references. By contacting HR departments independently, they say they can get a real picture of a candidate’s work history. They also boast a huge database of HR contacts and a verification system, promising to deliver reports within three working days to speed up hiring.
In the beginning, third-party background checks were meant to help companies verify things like education, work history, professional licenses, and criminal records—stuff directly related to the job. But as industries like tech, finance, and manufacturing grew, companies got more worried about risk. Pre-employment background checks quickly became standard, and the market just kept growing.
As I understand it, background check results usually fall into four categories: green light, blue light, yellow light, and red light. Green means everything checks out fine. Blue light means minor discrepancies. Yellow light flags risks like unverifiable education or made-up job dates. Red light means fake info, more than six months of fabricated experience, or bad records. A red light usually means the offer is canceled.
Li Jian, a lawyer at Beijing Jingshi (Tianjin) Law Firm, told NUPIAO that according to the Labor Contract Law, employers have the right to know basic info about a worker that’s relevant to the job—like skills, education, and work history. But they can’t go digging into things that aren’t job-related, and they need to finish the check before sending the offer. Otherwise, they risk liability. Also, background check firms need proper authorization and can only use public info. If they don’t, they could be breaking the Personal Information Protection Law. Their own risk ratings (red, yellow, etc.) don’t have any legal basis.
Lawyer Li also advises job seekers to be careful when signing a background check authorization. Ask the employer upfront what the hiring standards are and figure out if you meet them. If you have a civil lawsuit, you can ask the court to keep your name private in public records. Most importantly, save all your communications with the employer and the background check company in case you need to fight for your rights.
Here’s the kicker: To start his new job on time, Mr. Wang had already quit his old company, booked a flight to a new city, and rented an apartment near the office. All that time, money, and opportunity went down the drain. He tried to appeal the background check with Company L, but they told him only the hiring company can request a review. And even if Company D did ask, the “yellow light” rating wouldn’t change.
Mr. Wang’s story isn’t unique. Last December, NUPIAO reported that a fresh graduate named Zhu Qi passed multiple rounds of interviews for a management trainee spot at a fast-moving consumer goods company and even got to the salary negotiation stage. But then, during the background check, they found an unresolved contract dispute lawsuit, and the company pulled the offer.
Companies have a real need for background checks, but as the industry has expanded, we’re seeing a lot of problems. Too much data collection, indiscriminate risk ratings, and more. Many background check firms charge extra for different modules. Besides basic info, they offer add-ons like civil lawsuits, marriage disputes, and personal loans. They lump all litigation records together as risk factors, without considering the type of case, whether it’s closed, or if it’s even relevant to the job.
This chaos has even spawned a shady underground market. On e-commerce and social media platforms, you’ll find “anti-background check” services that claim they can remove court records or scrub lawsuit info from background check databases. They promise a full refund if they fail.
Right now, there’s no specific law in China that governs pre-employment background checks. The rules are scattered across labor law, personal information protection law, and the civil code. There’s no unified industry standard. So we’re stuck in a tug-of-war: companies need to manage risk, but workers have a right to privacy and equal job opportunities. Where’s the line? We still need clearer regulations, better industry practices, and more court cases to sort it all out.
