For a senior software professional in Pune, a nightmare began three years after he left a company he had worked with diligently for over two decades. A new role at a leading multinational was within reach, until his background verification (BGV) report returned flagged as “Amber.”
The reason: a “pending full-and-final settlement” remark. He had since worked for three years elsewhere, but the same note resurfaced, this time through a client-side verification that reopened an inquiry long settled in practice.
His new job hung in the balance, his reputation questioned by an automated flag and an unresponsive HR chain.
It took weeks of mediation, repeated follow-ups, and an official intervention by the Forum for IT Employees (FITE) before the issue was resolved.
The full and final dues were cleared, the client closed its inquiry, and the BGV finally turned “green”. What stayed with him though was not relief, but disbelief.
“Imagine losing an opportunity because of a three-year-old remark,” says Pawanjit Mane, president of FITE’s Maharashtra chapter. “And all because there are no clear, fair, or time-bound rules for background checks in India’s IT sector.”
A System Meant for Integrity
In India’s multi-billion-dollar technology industry, where compliance and reputation are sacrosanct, background verification was once a simple administrative process. Employers confirmed service tenure through relieving and experience letters, sometimes cross-checking provident fund (PF) records.
Over time, as moonlighting scandals and fake experience certificates drew headlines, the system became stricter, and far more intrusive.
Today, verification agencies routinely reach out to former managers for feedback on work ethics, project performance, and even interpersonal behaviour.
Smaller and mid-sized firms, Mane says, sometimes use the opportunity to settle scores. “We’ve seen cases where employees are punished for leaving at short notice or for raising workplace complaints,” he says.
In one instance, six women from a Pune-based IT company were denied their relieving letters after they accused a senior executive of sexual harassment.
“The employer refused to give documents unless they apologised and withdrew their complaints,” recalls Mane.
“We had to go to the Labour Commissioner’s office multiple times over three months. Only then did they get what was rightfully theirs.”
Such incidents are not isolated. FITE receives a steady flow of complaints every month, around 15 on average, from professionals whose job offers were revoked, projects withdrawn, or contracts frozen because of ambiguous or unresolved BGV remarks.
Many of these cases arise from simple clerical mismatches in PF dates or from employers who have since shut down and cannot be reached.
How the Problem Began
The roots of the current BGV tangle trace back to a small section of employees who, during India’s IT hiring boom, provided fake experience credentials to secure better roles.
Despite being illegal, fake certificate services still persist online, exploiting job competition, verification gaps, and India’s fragmented employment records.
While seemingly low-risk, using such documents is a criminal offence that can lead to termination, blacklisting, and prosecution.
In response, major IT firms tightened their checks, introducing PF and UAN cross-verifications, digital records, and multi-source background reviews.
Fraud became easier to detect, but the crackdown also brought a new wave of collateral damage for genuine employees caught in procedural or administrative lapses.
A Process With Loopholes
Harpreet Singh Saluja, president of the National Information Technology Employees Senate (NITES), confirms that BGV-related grievances are now a regular occurrence.
“We keep getting complaints from employees whose verifications get delayed or fail because of miscommunication or arbitrary remarks,” he says.
A former employee of an Indian IT giant, who requested anonymity, described how flawed some third-party checks can be.
“Some vendors don’t even visit the candidate’s address. They just make a phone call, tick boxes, and submit a report,” the person told AIM.
Online forums echo these frustrations. In one widely shared Reddit post last month, a professional recounted being terminated barely a month after joining a product firm over an alleged BGV failure, despite having submitted valid documents. Their profile was deleted immediately, they were pressured to sign confidentiality papers, and their provident fund account wasn’t linked. “It was traumatic,” the user wrote.
Another user recently said their background check at a global IT services firm failed because they couldn’t provide PF details or Form 16, as their salary had been below the TDS threshold.
Even after producing bank statements, the verification team refused to accept them. Commenters explained that PF or UAN data has become the default verification source, and lacking it can trigger an automatic failure, an indication of how opaque and rigid the process has become.
When Red and Amber Decide Futures
In BGV parlance, a “green” means everything checks out. “Amber” indicates a pending query, while “red” signals non-clearance, a verdict that can end a career overnight.
“Employees leave secure jobs after getting an offer, only to be told that their BGV has failed,” says Mane, who is himself an IT employee.
“The previous company won’t take them back; the new one won’t hire them. They’re left jobless overnight, all because the verification process lacks transparency and regulation.”
He believes background checks should be limited to factual elements, service tenure, PF records, police verification, and relieving letters.
“Everything else, like assessing performance or behaviour, should be done during the interview,” he says.
“A background check cannot become a backdoor performance appraisal.”
More Awareness
From an industry standpoint, background checks have always been part of IT hiring. Neeti Sharma, CEO of TeamLease Digital, says the process has become more visible, but not necessarily more punitive.
“There hasn’t been a major rise in disputes,” she notes. “What’s changed is awareness, both employers and employees now realise how critical BGVs are for job security and future opportunities.”
She acknowledges, however, that reputational risk is real.
“A negative or incomplete BGV can follow someone across jobs. Transparency is key, employees must be informed of any negative findings and given a fair chance to respond,” Sharma says.
She believes the solution lies in standardisation, not centralisation.
“A shared, digital industry platform managed by verified BGV partners could make checks faster and fairer,” she adds.
“It would ensure data privacy while giving employees the right to clarify or correct information.”
The Need for Clear Rules
Legally, India’s Digital Personal Data Protection (DPDP) Act, 2023 sets a strong framework for handling personal data during background checks, emphasising privacy, consent, and data security.
Employers must obtain informed consent, collect only relevant information, and protect it with adequate safeguards.
However, laws stop short of defining a universal verification process or timelines, leaving companies wide discretion in how they implement checks.
That gap, experts say, is where most of the current problems arise.
FITE has urged the Ministries of Labour and IT to introduce clear, uniform standards, restricting BGVs to factual employment records, and requiring them to be completed before an employee resigns from their current job.
Mane insists this is not a call for more regulation but for consistency. “We’re not asking for money or compensation,” he says. “Just fair, time-bound rules. If companies already follow good HR practices, they should have no objection to formalising them.”
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