Back To The Future Of Employment Background Checks

Many companies realize that the most important step in the hiring process may be the pre-employment background check. Depending on the industry, some companies have screening requirements mandated by Federal and State agencies, an example is transportation companies, they must perform drug tests and check the status of employee’s commercial drivers licenses and hazardous materials endorsements. Companies in the securities industry also must perform background checks, professionals from casino workers to insurance agents are screened for a criminal history. All states have passed legislations requiring background checks in jobs that serve the vulnerable or at risk, such as the elderly, children, and disabled. These mandatory checks are usually performed by state agencies using the applicant’s fingerprints to check state and federal records.

There are several reasons why employers voluntarily conduct pre and post employment (current employee) checks. Background screening reduces the risk of negligent hiring and retention lawsuits. Two thirds of negligent hiring cases brought to court have received jury awards with an average award of $600,000. According to the Workplace Violence Research Institute, the average award in these suits is $3 million. Employers must exercise due diligence in determining if the applicant has a criminal history that may be relevant to the position and are obligated to protect their employees, customers and the general public from other employees with violent histories and are held liable because they know or should have known of the risk posed by an employee. Background checks not only help to prevent workplace violence but are a defense against liability claims. Add to this an estimate by the U.S. Department of Commerce that one third of business failures are caused by employee theft. On top of this are studies that show 50% of resumes contain false information and overstated qualifications.

Some larger companies with their own security staff perform background checks in house, while other organizations have found it much more efficient and cost effective to outsource employment screening functions to a professional screening firm. A good rule of thumb on cost is the one-day pay rule. Background checks should cost about a day’s pay for the applied position. Of course this would depend on the scope of the screen; a management position would require a more in-depth screen than a warehouse worker. This is a very low cost when compared to the alternative of possible legal and settlement expenses of negligence lawsuit or the business expenses associated with a bad hire, theft, fraud, embezzlement, etc.

Depending on the position applied for and the scope of the background check, the report may contain some or all of the following; state and federal criminal report, credit report, driver license record, past employment references, education and credentials verification, social security number trace, and OFAC (Patriot Act) search. An employer does not need to screen every applicant the same way, but the screen should consist of the same types of reports per job description. All applicants for a particular position should have the same scope of screening to avoid any appearance of discrimination and profiling. Professional screening companies check state criminal reports by sending someone to the county courthouses and manually checking court records. What counties are search is determined by the residences shown in the applicant’s credit report or social security number trace. “National criminal” databases are good secondary search tools for adjacent counties. While social security numbers are needed for credit reports, criminal records are usually filed and searched for by name and date of birth, making it imperative that DOB’s remain available to screening firms.

Background screening companies are regulated by the Federal Fair Credit Reporting Act, The Fair and Accurate Credit Transactions Act as enforced by the FTC, and the various state versions of these laws. Many state versions are stricter than the federal law and pre-empt it where stronger. A screening company must be aware of all 51 versions as they pertain to background checks and maintain compliance with all of them, and clients must certify their compliance to the screening company. The regulations and laws pertaining to screening are in constant motion as they ride a political wave, with the tide moving with each new data breach, theft, or lost laptop. The screening companies play a major role in helping their employer clients comply with new legal requirements and helping them protect their employees and business assets.

American life has only 2 guarantees and neither one of them is a background check. There is always a chance of a bad apple hiding in the bushel. What the check does is greatly reduce the chances of a company with a screening program having to eat that bad apple. The background screener is taking the information the consumer wrote on the application and that fantastic looking resume’ and either verifies it or comes up with discrepancies that could possibly have a severe impact on the hiring company. The applicant is protected by the FCRA and must be notified of any adverse findings and have a chance to dispute the report.

The Sands of Time Are Blowing, Protect Your Eyes

There recently has been action taken in some states and being considered in others to mask or redact some personal identifiers from public records, particularly social security numbers and date of birth. While social security numbers are used in credit reports, employment screening firms need date of birth information along with full names to perform a criminal records background check. Identity theft is a growing problem and consumers must be protected, but no one has had their identity stolen using date of birth information. Lawmakers have to take into account they will be harming those they are seeking to protect, law abiding citizens seeking employment. Background screening companies need to complete their reports as swiftly as possible so the employers that are depending on them can make their hiring decisions. Unreasonable restrictions on screening companies create unnecessary delays which may cause employers to decide not to wait and move on to the next applicant which thereby harms the original applicant. States that have enacted or are considering enacting legislation masking DOBs must make exemptions for FCRA compliant screening firms that are already tightly regulated, adhere to compliance standards by getting the consumer’s written authorization, provide the required disclosures, and provide a valuable service that consumers and employers want and need. Legislation at any level must include wording that clearly shows the distinction between data aggregators and background screeners. While the aggregators collect and market personal data without the consumer’s knowledge or consent, screeners make disclosures and receive consent before any search activity can begin. Perhaps the federal government should enact legislation with pre-emption for FCRA compliant background screening companies that gives them nationwide exemption. This would also have the benefit of allowing companies with offices in multiple states to have one standard hiring policy concerning the scope of a background check.

There are some private employers and legislators speaking on their behalf who have expressed a desire to be granted access to FBI criminal records. The FBI maintains a criminal record repository known as the Interstate Identification Index (Triple I), containing records from every state and territory. Every state submits records from their own central repository which in turn has been submitted by local criminal justice agencies. This allows a screener to search for a criminal history anywhere in the country at once, instead of manually going to an applicant’s individual county of residence. Criminal justice agencies base their records on fingerprints, which provide a biometric match of individual and record. This, in turn, greatly reduces the risks of false positives and false negatives from name based database checks. There are some employers in regulated industries that have access to the FBI database; other employers have background checks performed for them by various state agencies.

Sounds great, except for a few small problems. First off, volume, in 2005 the FBI processed approximately 10 million fingerprint checks for non-criminal justice purposes. Here is another small problem, the FBI records are arrest records, and half the records do not have final disposition information. This makes them unusable in states where only conviction records can be used in an employment check, such as New York. People with a criminal past have equal rights too, and are covered under anti-discrimination statutes as well as the FCRA. It is important to remember that there is no single source of complete and up to date information. Not all counties report to their states repository, those that do have their own schedule of when they do and method of reporting. There are 50 states and 50 different laws restricting criminal history reporting for employment purposes.

To summarize, it is vital for employers to hire a professional background screening company with the knowledge and ability to help a client design a screening program that is efficient, effective, and legal.