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Excerpts of an Article in Crains Cleveland Business – March 2008
Background checks are becoming a more standard practice among companies of all sizes considering new employees, according to executives in the screening business.
Weeding out the bad seed
Although employment screening services used to be conducted mostly for larger companies, smaller firms are getting into the game. Small businesses, screening firms said, are becoming more aware of the dangers of not checking up on
potential employees, especially given the harm one bad seed could do to a modest organization. Indeed, digging into someone’s past can save a company the time, money and embarrassment of hiring a bad employee or one who is being less than honest.
The U.S. Department of Labor estimates that some 60% of job applicants fib about their educational backgrounds and about one-third of all applicants are less than truthful about their work experience or the role they played with a
previous employer. The depth of screening depends largely on the kind of job up for hire, said Ted Moss, president of Crimcheck.com, an employment screening company, located in Berea. Retailers, for instance, are keen on criminal
record checks to guard against employee theft. Technical organizations, on the other hand, are more interested in past employment and educational degree verification.
While some aspects of employment screening can be done by companies themselves — such as verifying educational degrees and past employment — most small organizations do not have the resources to do rigorous detective work. An online data search, for example, might reveal an arrest but fail to report if the applicant was acquitted or the
charges were dropped. Mr. Moss said reputable employment screening companies always verify information obtained from database searches against the actual public records filed at the courthouse, which means sifting through records that reside in the
10,000 local courts and 3,500 county courts in all 50 states. Credit reports also might contain inaccuracies that a careful analysis would unearth.
Legal pitfalls
Understanding the character and verifying previous experience of an applicant is one of the chief reasons why more companies are doing background checks, but the threat of liability also lingers. Companies increasingly are becoming more concerned about “negligent hiring,” said Michael Chesney, a partner at Frantz Ward, a Cleveland-based law firm.
The negligent hiring doctrines impose liability upon an employer who fails to
reasonably inquire into the background of a prospective employee.
A health care provider obviously does not want the liability of hiring someone with a violent or abusive past, said Mr. Chesney, who practices in the firm’s labor and employment law group. Similar issues apply when a background check
turns up a problem with a current employee. A company can be liable for “negligent retention,” he said.
“There are not a lot of negligent hiring cases, but it’s not unheard of,” Mr. Chesney said. “If something does happen, a company needs to be able to show that it took the appropriate steps to protect its employees and the public.” Conversely, companies must be aware of legalities involved with background checks. While the Fair Credit Reporting Act might not appear to apply to background screening, once a company engages a third-party to conduct preemployment screening FCRA does come into play, Mr. Chesney said.
FCRA is a consumer protection law that sets up a procedure for correcting mistakes on one’s credit record. If a prehire screening company seeks information about a prospective employee from a consumer-reporting agency, certain
notification and disclosure rules provided by FCRA must be followed.
Ultimately, it’s important to make sure any individual or organization hired to do a search knows how to apply the law. “There’s no question that employment screening is a good tool from a business perspective,” Mr. Chesney said. “It is
up to the employer to make sure prospective employees are as they represent themselves to be.”
SMALL BUSINESS
Background checks vital to finding dishonest job seekers
By JUDY STRINGER
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