Authored by Ted L. Moss, CPP

In nearly every U.S. state, courts have ruled that employers owe a special duty to their employees and clients to protect them from the harmful or criminal acts of other employees.  Financial awards and public fallout from instances where a company’s employee has caused harm to another employee can be excessively large and often punitive.  At the heart of many of these rulings is one overriding element of employer responsibility: responsible hiring practices. Negligent hiring litigation is a growing problem and statistics show that employers lose 79% of all negligent hiring suits.

 Responsible hiring means that an employer has made active and reasonable attempts to discover any historical indication, whether criminal,  characteristic, or propensity, that would provide ample warning in regards to the safety of his or her employment.  To establish negligent hiring, the harmed person generally must show that 1. The employer did not exercise reasonable care in hiring the person, 2. The employee had dangerous tendencies which should have been apparent if the employer had exercised reasonable care, and 3.  The employer placed the employee in a position where others could be injured.

Many companies have a legal obligation to perform background checks on employees if they will be placed in certain situations. Some of these might include:

Working in close contact with children

Supervision of children or the elderly

Access to personal residences or personal property

Responsibility of providing safety to others

Driving and transportation

Access to guns or weapons

In these cases, driving records checks, criminal and sex offender checks, and verification of identity are the norm. But even those businesses that are not legally required to perform background checks on employees can be found liable for negligent hiring, because from the perspective of the courts and the government, every single employer has a responsibility to perform due diligence to determine at least the  employee’s fitness to perform the job safely.

What level of screening is enough to mitigate risk?

Reviewing the employment application and verification of references is not always enough.  The level of screening should be proportionate to the level of inherent risk that the position entails.  Some basic factors to consider should be:

 Conduct a thorough background check for criminal records/sexual offender lists/identity verification

Review driving record history and verify educational history/degrees/employment records

Conduct an in-depth interview, with investigation into any employment lapses

Verify all references

Psychological testing

Consider a professional review of the resume for potential fraud

 Drug Testing

If this list seems excessive, consider the fact that the fee for a professional screening firm to conduct the above testing would usually not exceed the cost of two days salary for most entry level employees.  Most of the above can be conducted in-house, (click here for a listing of free public records)  if the company has access to a specially trained HR professional dedicated to administering the hiring process.  The law is very specific to what public and criminal records can be used when making the hiring decision, so make sure that your new hire administrator is well trained in the various federal, state, and local laws pertaining to hiring.  If hiring a professional pre-employment screening firm, make sure they are adequately certified and knowledgeable regarding CRA (consumer reporting agency) regulations. 

(View The Article On Smart Business)

“Statistically, companies end up with fewer turnovers when they screen employees because they hire the right candidate to begin with,” says Ted L. Moss, founder, president and CEO of Crimcheck.com, a Berea-based background check company.

Moss, a certified protection professional, says the two main types of screening are instant checks that check criminal history and comprehensive checks, which cover a criminal record check and verification of employment, education, credit and driving history.

“We know it’s important to make sure we’re not hiring a criminal, but why?” Moss says. “It’s to protect customers, provide a safe work environment and ensure that the company runs smoothly and is profitable.”

Moss says that first you should decide which type of check is most appropriate for your organization, and then find a company that suits your needs.

“It isn’t just looking on the Internet but finding organizations that have outlined what the best practices are,” he says. “Also, ask people you know from business and find out what they’re doing and who they’re using.”

You also need to determine the scope of the check, how far into the person’s background you want to go, how much information you want and how you are going to apply it to the hiring process.

You can either do pre-employment screenings on your own, or you can use an established company, which can educate you about the different types of screenings and how you can use the information obtained.

“It’s like, you can hire a plumber to fix your pipes, or you can get a book and figure out how to do it yourself,” Moss says. “You can do these things yourself, but it takes some expertise to make sure you’re doing it correctly.”

When using pre-employment screening, many employers want the information immediately, and while instant checks are possible, they might not be the best choice for your company.

“Think about it — instant check or hire this company that says, ‘It’s going to take 24 to 48 hours to get this check,’” Moss says. “It indicates that someone’s doing a little more work.”

But even with the extra time, something in the candidate’s background may get overlooked because a pre-employment screening isn’t as in-depth as a full-blown background check.

And remember, no one is perfect. Even if your candidate doesn’t have a spotless record, there may be some things you are willing to overlook.

Moss says pre-employment screenings are worth the cost of between $75 and $100 because the alternative is much more expensive.

“Considering it can cost between $7,000 and $15,000 to hire and train a new employee, the investment of $75 to $100 up-front is probably smart money,” Moss says.

Moss says the benefits of pre-employment screenings are immense.

“The Society of Human Resource Management says that 45 percent of all resumes contain at least one major fabrication, and the U.S. Chamber of Commerce says that 33 percent of U.S. business bankruptcies are due to employee theft and embezzlement,” he says. “It’s risk mitigation. It’s a necessity; it’s like buying insurance. Providing a safe work environment for your employees and customers is the goal. You increase productivity and profits and reduce turnover.”

“It’s just a smart business decision. Having the information up-front allows you to make a better hiring decision and run your company more efficiently.”

Successful pre-employment screenings

Ted L. Moss, founder, president and CEO of Crimcheck.com, offers these tips for successfully using pre-employment screenings.

Evaluate. Ask yourself why you’re doing it, what your risks are, how it would benefit your company, what your budget is and what return you expect on investment.

Determine the scope and define the categories and types of jobs you have in your business. If you have a lot of sales-people, you’re going to want to run the driving records of potential candidates. If you have people dealing with money or confidential information, you might want to run a credit report.
Decide if you want to do it yourself or outsource it.

Do your research. Find screening partners who are truly concerned about your needs. Do they take the time to understand your business? Do they offer education and training? Will they come on-site and train your employees? Can they offer technology to suit your needs? Are they flexible? Are they recognized in the industry? Lastly, check their references and the Better Business Bureau to make sure they are a viable candidate.

Centralize your screening process. It’s much easier if you pick one person to be the main point of contact and filter information through that person because he or she can be your in-house expert and work with your provider. The provider is then constantly educating that person and updating him or her about any industry changes or new legislation.

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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

Forrester Research, citing its released report “BPO’s Fragmented Future”, said, “Firms looking to outsource core business processes like human recourses to gain cost savings may not find one single vendor that can manage such complex offerings.”

Forrester surveyed 82 senior executives and held interviews with early BPO adopters, and reported inflexible contracts and difficulty managing vendors.

HRO Today just carried an article about outsourcing background checks with the title “Staffing Firm Finds a Better Option In Outsourcing Screening Services.” According to the story,

A privately held staffing company based in Seattle, Parker Staffing Service, LLC, provides temporary, contract, and full-time work in administrative, call center, IT, IS, development, QA, healthcare IT, and sales and marketing positions. Its staffing division focuses on the Pacific Northwest, while the technical and search divisions place candidates nationwide. Parker decided to outsource background checks on every candidate it placed.

If your HRO provider is in charge of selecting your pre-employment screening provider, that leaves your company twice removed from this important function.

The following incident may illustrate the fact that staffing firms and HROs are still not taking pre-employment screening seriously enough and are putting both their business and their client at risk.

A 30-year old woman, high on crack, drove her vehicle into a crowd enjoying the Unifest Food and Music Festival in D.C., causing injury to 40 people including 7 kids. At the time of the incident, Ms. Bell was employed by a DC temporary staffing company on a receptionist assignment for the office of former mayor and now D.C. council member Marion Berry. After hearing of the horrific event, Berry’s office terminated the woman’s assignment. They also terminated their contract with the staffing company because “they may not have properly investigated her background prior to placing her in office.”

Pre-employment screening may be the HR function you want to maintain control of… One aspect of HRO, pre-employment screening, may be the one sector of an HRO’s offerings that you may not want to utilize. The pre-employment screening industry is heavily regulated. A plethora of federal, state and local laws regulate the use of criminal records for pre-employment screening purposes, and your HRO most likely is not specialized enough to keep up with legislation.

Certain states require pre-adverse action and adverse action letters, some states limit the number of years criminal records can be searched, others specify that certain types of criminal records cannot be used at all. It is doubtful that any BPO or their low cost vendor, could maintain updated knowledge of every key bit of legislation, and implement accordingly by state.

The types of background checks that can be conducted vary enormously in quality and scope. The use of third party data brokers who sell database checks for criminal searches is an alarming trend. There is no national database search for criminal records, period. But this is just how these data brokers misleadingly name their products, as national database checks. Only by reading the fine print can one see that their definition of national means: criminal and sexual offender records from some states, and incarceration records from others. By partnering with a professional pre-employment screening vendor, your company can be sure of the quality of the background check your potential employees are receiving.

Professional pre-employment screening agencies such as those who are members of the National Association of Professional Background Screeners (NAPBS) maintain adherence to legal qualifications because they remain abreast of current legislation and FCRA (Fair Credit Reporting Act) requirements. This is one of the most complex service industries that cater to businesses today. A single FCRA violation fine can amount to as much as $50,000. Hiring a partner who is knowledgeable enough to help mitigate any potential risk from a negligent hiring lawsuit should be a main focus when outsourcing pre-employment screening.

In 1991, Moss began CrimCheck to provide investigative and security consulting services to businesses. With the help of his brother, a basement phone line and $100, Moss got out his name by making cold calls to area companies, slowly but surely building a sizable company.

Mr. Yachanin expresses the opinion that “our country was founded on principles of freedom and liberty, and law–abiding citizens should be able to choose to be anonymous in as many aspects of their lives as they see fit.”

While some may argue that the constitution may or may not guarantee privacy specifically, it certainly does not do so, and should not be assumed to provide blanket anonymity. Here is the real dilemma: On one hand, I certainly would like to know if my neighbor is a child molester or a convicted felon. On the other hand, if I have a criminal conviction on my record, I don’t want anyone to know about it. You can not have it both ways.

As the President of Crimcheck.com, a pre-employment screening firm, and also as a citizen, I am deeply troubled by proposed legislation which may limit access to criminal record data. Ostensibly this move is intended to protect the public from identity theft. Not only will such laws not protect the public, it will place them in grave danger. In our business, we access these records on behalf of employers who want to make sure that they are not hiring a child molester as a bus driver, a multiple DUI offender to drive public transportation, or a thief to come into your home in a service capacity. Keeping in mind that your workplace may perform these same checks to protect you, take the following points into consideration:

• Public criminal records are used to help businesses mitigate risk from the 100 Billion dollar a year employee theft problem which results in 1/3 of U.S. companies going out of business.
• Public record checks also help reduce losses from negligent hiring and workplace violence which costs Americans another 50 Billion dollars a year. Public records reduce the cost to businesses from workplace drug abuse which is another 50 Billion dollar drain on our economy.
• The open access to public record information with the identifiers intact (name, address, date of birth) is crucial to public safety by providing a safe work and business environment.

Today, “Identity Theft” is a media buzzword. It seems that privacy issues and especially the availability of public records, are in the news on a daily basis. While identity theft is a concern, only a small percentage of such crimes are committed using public records information. In fact, over 25% of identity theft occurs through “dumpster diving” or sifting through trash. Another 30% occurs at the consumer’s home or place of residence by co-workers or family.  30% occurs at the point of transaction or sale. The remainder is from telemarketing fraud, mail fraud and a number of other scams perpetrated by identity thieves. In fact there is no specific data to indicate that public records is are source for identity thieves at all!

So when you apply for a credit card, read the small print. Realize that you are giving them the authority to sell your information about your buying habits, address and phone data, and perhaps your social security information. When you sign up for your driver’s license, which is a privilege and not a right, there is implied consent that they can share that information with insurance companies and insurance companies can in turn share that information with others. Be aware of what information you give out, and understand that as the times change and the information superhighway in some way infringes on your privacy, freedom of information and thought are what ultimately keep us free and safe.

· What is a “National Criminal History Database”, and is it a complete search tool?

· What are the “Best Practices” for conducting pre-employment screening?

Performing background checks in-house

An employer can elect to conduct their background checks themselves; however, the amount of time it would take for one manager to familiarize themselves with the complex maze of legislation covering this topic would be prohibitive. In addition, adherence to the federal Fair Credit Reporting Act (FCRA) guidelines alone could fill one full time position, depending on the volume of background checks performed.

Is your HR Manager informed regarding some of the following legal issues?

o Arrest records, records that extend beyond reporting period scope, sealed or special disposition cases, and deferred adjudications may not be considered when screening applicants.

o Certain states require that an applicant be given a copy of their background check, even if they do not ask for one.

o If a decision is made against hiring an applicant based upon their background check results, they must be notified of such, and given time to respond before an employer takes any adverse action.

o Certain states limit the scope of background checks to 7 years.

Additionally, if you are a national employer, maintaining compliance in a multi-state environment may prove to be nearly impossible. That is why many employers elect to use a Consumer Reporting Agency (CRA), or pre-employment screening company.

The Fallacy of the “National Criminal Records Search”

Many online sites offer an inexpensive “national criminal records search”, which purports by its title to be national in scope. In reality, the only “national” criminal record search is maintained by the FBI and is not available for public or private researchers. There is no central repository for federal, state and local criminal records.

Not all states and counties report

The shortcomings of these databases are many. There are more than 3600 counties, 10,000 federal, state and local courts, and 50 state repositories around the United States. Only some states and counties submit their criminal record information to any type of statewide or “national” database.

Impermissible records may be reported

Criminal records submitted into these databases are not screened for pre-employment use. Therefore, arrest information not resulting in convictions, records that extend beyond reporting period scope, sealed or special disposition cases, deferred adjudications, and many other record types that may not be permissible for use for pre-employment screening purposes may be included in the database. The FCRA and various states have legislation in place which limits what type of records may be used for pre-employment screening purposes.

Database records may provide misleading misdemeanor coverage

Many database resellers imply that both felony and misdemeanor crimes are reported in their database searches. In fact, in most cases, the only misdemeanor crimes that are reported in a “national database check” are those that have been reduced from a felony. Over 70% of all crimes committed are at the misdemeanor level and these include crimes that are critical to a safe hiring decision, such as domestic violence, theft, assault, driving under the Influence, and gun crimes. The only way to search for these records is at county and city level.

In summary, a national criminal record database search provides a wide, yet incomplete net. When using such a resource, results provided must be screened by someone who is knowledgeable in the various intricacies of FCRA compliance and other multiple state and federal legislation.

Best practices for pre-employment criminal records searches

In evaluating any pre-employment service provider, find one that offers the “industry standard” for criminal records checks: a multiple jurisdiction felony and misdemeanor criminal record search, combined with a social security number trace.

The SSN trace helps identify potential jurisdictions in which the applicant may have lived, providing a residential history of the applicant for a period of approximately seven years.

The criminal background check should encompass a criminal history search at the county and city level, for each area of residence, which is designed to reveal felony and misdemeanor convictions.

A pre-employment screening provider should make it clear whether or not they release all criminal history information, leaving it to the employer to familiarize themselves with federal FCRA, state and local employment laws, or if they provide pre-screened, FCRA and state compliant information. If your company does not have a certified, Human Resource professional on staff, who is familiar with employment screening compliance issues, it would be best to employ a screening provider who is familiar with all legislation, a member of a professional screening association such as NAPBS (National Association of Professional Background Screeners), and a member of ASIS International.