Criminal background checks conducted during the hiring process can both save employers money and protect their business.
“If your employees come in direct contact with your customers and cause them harm, your business can be liable if that employee has a criminal record,” says Jessica Ford, CSP, vice president of operations for Ashton Staffing, Inc. “A background check can also provide insight into an individual’s behavior, character and integrity.”
Recently, the Equal Employment Opportunity Commission updated its policy on the use of criminal background checks during the hiring process to discourage discrimination based on race or national origin.
Smart Business spoke with Ford about the importance of criminal background checks and how recent changes are impacting the process.
Why should an employer conduct a criminal background check during the hiring process?
Employers check potential and current workers for several reasons. The things an employer wants to know about a candidate can vary by industry and job function. The most common reasons for conducting a criminal background check are to alleviate negligent hiring; identification verification; checks for a history of child, handicap and elderly abuse; corporate scandals; and most of all to make sure the applicant is telling the truth. It’s estimated that more than 40 percent of resumes contain false or misleading information. Employers want to insure that what they are getting in an employee is what they were promised. The employer might perform a background check to find out whether a candidate actually graduated from the college they said they did or to confirm the candidate worked at their previous employers during the time stated on their resume or job application.
When conducting a criminal background check, what should employers look for and why?
Employers should evaluate each background on an individual basis based on the position the applicant is applying for. Anyone working with children in the state of Georgia must be fingerprinted and processed through the Georgia Bureau of Investigation. This comes as a result of events occurring during the past 10 years. Adult supervisors such as Little League coaches, teachers, day care workers and even the people serving children lunch at school fall under this guideline. Felony convictions of any kind or misdemeanors involving violence, drugs or abuse would result in the applicant not being hired.
When screening potential executives, directors and managers, employers should look for any discrepancies in their job history, verify their education, check their financial history and look for any “white collar” crimes like embezzlement.
There are unique issues surrounding the production and manufacturing industry when it comes to hiring. Many of these positions offer low wages and attract those with few skills or time invested in education. For these positions, you should evaluate what is vital to your organization. Candidates who have a history of violent crimes or felony drug convictions, such as distribution in the past seven years, are probably not a good idea. If the candidate has a record of theft, consider what that could mean for your business and the types of products you produce or sell. Also take into consideration how long ago the candidate was convicted and if it was a single incident.
What has changed because of the Equal Employment Opportunity Commission’s updated policy on criminal background checks?
In April of this year, the EEOC issued new guidance on the consideration of arrest and conviction records in employment decisions. It determined that the use of an individual’s criminal history during the interview and hiring process could constitute discrimination and makes an attempt to discourage using the information differently based on an applicant’s race or national origin.
As a best practice, you should only consider convictions when reviewing criminal background checks, not arrests. Arrest records are not proof of criminal conduct, as they might not report the actual outcome of the situation so they should not be used as grounds for exclusion. Conviction records, on the other hand, typically serve as sufficient evidence that a person engaged in a particular conduct. These records are more reliable and the use of them by an employer is more defensible.
The EEOC does not have the authority to prohibit employers from obtaining or using conviction records. It simply seeks to ensure that such information is not used in a discriminatory way, which is why they are suggesting companies stop using a blanket policy, such as no felony convictions in the last seven years. Instead, review each criminal background result on a case-by-case basis and make sure your requirements make sense for that position. Review the credit and financial history of anyone who will be working in accounting, for instance.
How will these changes affect the way an employer uses criminal background checks for employment screening?
Lawsuits are on the rise. If an employee’s actions hurt someone, the employer could be liable. The threat of liability gives employers reason to be cautious when checking an applicant’s past. A bad decision can wreak havoc on a company’s budget and reputation as well as ruin the career of the hiring official. Employers no longer feel secure in relying on their instincts as a basis to hire. On the other hand, though, if you are too stringent and have unrealistic expectations for position then you are setting yourself up for an EEOC charge. Anyone who has ever been involved in an EEOC investigation can tell you it is not something you want to do.
If an employer is unsure of his or her rights regarding criminal background checks, call your corporate attorney or even the EEOC. The commission is very helpful and can give you very unbiased advice.
Jessica Ford, CSP, is vice president of operations for Ashton Staffing, Inc. Reach her at (770) 419-1776 or email@example.com.
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When trying to learn information about an individual, many companies turn to online background checks to uncover or confirm information. However, doing so could prove a mistake if this is the primary step taken to understand an individual’s background, as relied upon information may not be fully verified.
Hiring a licensed investigator can not only help ensure high-quality information is obtained, it can also facilitate the analysis of this information to provide a complete picture of an individual, says Theresa Mack, CPA, CFF, CAMS, CFCI, PI, a senior manager with Cendrowski Corporate Advisors.
“A simple background check may provide an incomplete picture of an individual and overlook critical information,” says Mack. “By hiring a licensed investigator to conduct background due diligence, you can ensure that no stone is left unturned.”
Smart Business spoke with Mack about how a licensed investigator can help your business uncover the information you need and put it in an appropriate context.
Why should a company hire a licensed investigator to conduct background due diligence activities rather than perform an online background check?
Most online or database-driven background checks are actually ‘record checks.’ In other words, data from records is compiled and the quality of source information is not thoroughly verified.
For some purposes, this cursory check of public records may be sufficient. However, depending on the information found, the nature of the background check, the check’s intended use and the access to confidential/proprietary information that a potential employee may have, a complete background due diligence investigation may be warranted.
A background due diligence investigation, as performed by licensed investigators, is far from a cursory background check. No single record or method of search is generally employed; instead, an investigator uses multiple resources to verify data accuracy and corroborate information. Thus, background due diligence investigations help reduce the risk of client reliance on false information.
What process is employed by investigators to perform background due diligence activities?
An investigator generally works on a six-step methodology: prepare, inquire, analyze, query, document and report. This methodology is highly applicable to background investigations.
An accurate and comprehensive investigation is based upon existing, determined and verified information. Leaving no rock unturned and making every conceivable effort to locate all possible information is generally the objective of an investigator.
Investigators will tailor their activities to suit the needs of their clients, which typically include attorneys, businesses and individuals. Client needs will define both the records checked by the investigator and the type of documents that can be released to the investigator and the client.
Where will an investigator begin his or her research?
An investigator often begins the research process by examining open source information. In this instance, open source refers to sources that are overt and publicly available, as opposed to covert or classified sources; it is not related to open-source software or public intelligence.
Open source information includes public documents that are created over a person’s lifetime, allowing the investigator to follow a paper trail leading to a complete history of the individuals being searched. These may include court filings, property tax documents, vehicle registrations and social media sources, among others.
Open source intelligence is a form of intelligence collection management that involves finding, selecting and acquiring information from publicly available sources and analyzing it to produce actionable intelligence.
How does an investigator evaluate source information?
Any record that is kept or provided is only as good as the chain of events involved in its creation. While doing online record checks simply provides information on an individual, investigators are often tasked with evaluating the veracity of the source data.
Record maintenance, storage and dissemination procedures can often impact the accuracy of information. Typos, misprints and mistakes introduced by human error can also affect the accuracy of records. These latter items are often seen on personal credit reports, criminal convictions and even civil litigation histories, which, although they are official records can nonetheless contain errors.
Processes for updating records can also have an impact on the accuracy of information, as records are only as accurate as their frequency of update. Some records are never updated and may provide stale data if a user is unaware of this underlying issue.
Finally, the method data that warehouses employ for acquiring information critically impacts information integrity. For instance, the provider may have purchased information from a secondary source. In such an instance, it is essential that the provider have accurate retrieval processes and is knowledgeable about handling special data items.
Each of these issues is evaluated by an investigator over the course of conducting background due diligence activities.
Theresa Mack,CPA, CFF, CAMS, CFCI, PI, is a senior manager with Cendrowski Corporate Advisors. Reach her at (866) 717-1607 or firstname.lastname@example.org.
Who have you hired lately? What do you know about their backgrounds? Is the information they provided on their resume or application accurate? The National Credit Verification Service says that 25 percent of the MBA degrees it verifies on resumes are false. College and university registrars report that at least 60 percent of the degrees they are asked to verify are falsified. The Wall Street Journal reports that 34 percent of all job applications contain lies regarding experience, education and the ability to perform essential functions of the job.
Smart Business spoke to Ron Williams at Talon Companies about how business owners can avoid the liability of making a bad — or dangerous — hire through the proper use of background checks.
Why should employers be concerned with accurate background checks?
Consider these statistics:
- 30 percent of small business failure is caused by employee theft
- Internal employee-related thefts occur 15 times more often than external theft
- Embezzlement losses exceed $4 billion every year
- ‘Other’ employee crimes cost businesses an estimated $50 billion annually
What do business leaders need to know when hiring employees?
Even more deadly than fiscal loss due to employee dishonesty is workplace violence. Not to mention the harm it causes employees and the company’s reputation, statistics show that the average award in a workplace violence lawsuit exceeds $1 million per case and, overall, on-the-job violence costs employers $36 billion per year.
One of the easiest and most effective ways a company can protect itself and its assets against loss of any type is to hire the right people. Although obvious, this advice is seldom heeded by employers, who rely on intuition in making hiring decisions more often than established facts learned through background checks.
Most businesses have neither the expertise nor the time to wade through the mountains of information from an almost infinite number of sources, all available to verify and check the background of an applicant. By failing to perform even the most rudimentary background check on a potential employee, employers are exposing themselves to liability for negligent hiring and, after the fact, for negligent retention.
What is negligent hiring?
Today, it is fairly common knowledge that employers have an obligation to provide a safe work environment for their employees. But not everyone is aware of the consequences that can stem from negligent hiring and/or negligent retention of employees.
Negligent hiring occurs when an employer does not exercise ‘reasonable care’ in hiring a new employee. More and more, legal actions are resulting in judgements that find employers liable for negligent hiring situations when an employee was hired into a position without the proper checks in place to verify that individual’s history. An employer who hires someone with a history of criminal behavior, when that emp;loyee harms another employee, client, or vendor, is likely to be held accountable. Additionally, employers run the risk of being held liable for negligent retention if they do not respond appropriately to signals from current employees that they may pose a threat to those with whom they associate through work.
What can happen to an employer who does not conduct appropriate background checks?
As an example, an armored truck company in Los Angeles paid a $12 million settlement in a negligent hiring and training lawsuit. The suit alleged that the company did not adequately investigate an employee’s past work record or provide adequate driver training.
In a federal court in Tennessee, a store customer was inured when restrained by a security guard who had identified the customer as a shoplifter. The customer was awarded $10 million in damages, claiming negligent hiring and failure to properly train the guard.
In Dallas, Texas, a suit against the owners and management of an apartment complex was settled for $5 million. The suite filed by family members of a deceased tenant, alleged that the tenant was killed by the assistant manager’s brother. The suit claimed that management was negligent in hiring as assistant manager without conducting a criminal background check. In this example, it was not even an employee who was identified as the murderer, yet the employer was cited for not conducting simple criminal background checks.
What should employers do to prevent these kinds of suits?
Because employers are held accountable if they knew, should have known, or had any reason to believe that an employee or prospective employee posed a risk of threat to others, it is essential that thorough background checks be conducted and documented.
At a minimum, every employer should carefully inspect the information recorded by an applicant on his or her application. Are any patterns of short-term employment noted? Ask the applicant for his or her explanation, then verify their explanations through a reliable background check agency. Social Security number verification, criminal and civil record searches and credit reports should all be part of an employer’s pre-employment screening program.
Proper screening of employees makes it possible for an employer to make an informed decision about applicants before they are hired and brought into the workplace. Such basic practices give an employer the ability to create a safe and profitable work environment and protect against loss.
For more information on background checks of all types, please contact Talon at (714) 434-7476.
Ron Williams is the CEO at Talon Companies. Reach him at (800) 808-2566 or email@example.com. Reach Talon Companies Headquarters at firstname.lastname@example.org, (800) 808-2566, or www.TalonCompanies.com.
Talon Cyber Tec is a subsidiary of Talon Executive Services, an independent risk management firm providing full spectrum services to secure corporate assets and prevent loss due to malevolent acts.