Background Checks

MANY EMPLOYERS who consider using background investigation firms think only of liability protection. Courts have ruled that companies have a general duty to check criminal records for prospective employees who interface with the public or who could have an opportunity to commit a violent crime while in the course of their employment. After all, damages against employers are being awarded where the company was deemed negligent because it failed to perform a reasonable search into an employee's background prior to hiring. Therefore, a background check is seen as a simple way to minimize the exposure of a wrongful hire or wrongful retention lawsuit.

That's certainly a valid reason to employ background investigation firms. Here's a more sobering statistic: According to a 2002 report by the U.S. Department of Justice, almost 7 million Americans were on probation, in jail, in prison, or on parole—that is, approximately 3 percent of the adult population, or one in every thirty-two adults! In addition, according to recent statistics by the Bureau of Justice Statistics, recidivism is high: Some 67 percent of prisoners are rearrested for a new offense within three years of release from prison.

Moreover, every year billions of dollars are lost by businesses nationwide because of employee theft, so the odds are that convicted thieves will steal again when the opportunity presents itself. Finally, keep in mind that homicide is one of the largest causes of workplace deaths and that almost a dozen people are murdered in the course of doing their jobs every week. This is serious stuff, and employing workers without completing background checks can be a source of major liability to your company—both financially and in terms of compromised workplace safety.

On a more practical basis, background investigation firms will help you hire better employees by steering clear of candidates who have falsified their employment applications. Since industry experts approximate that 30 percent of all resumes contain some misrepresentation (most commonly in the

Education section), a sound background check will help you screen out individuals with compromised work ethics, reduce turnover, and provide you with greater peace of mind regarding your hiring decisions. And no matter how good your reference checks are, you won t have the time, resources, or authority to check into candidates criminal backgrounds.

What do you look for in selecting a background investigation firm, and how much do their services cost? Depending on the position being applied for, employers should begin with a basic, five-point search and then add additional background checking criteria as necessary. The basic five-point search will typically investigate a candidate s:

• Criminal history of all counties where the applicant resided, at least for the past seven years, along with any initial alias (AKA)

• Motor vehicle report (MVR)

• Social security verification

• Federal district court search

• Multi-jurisdictional database search

The basic criminal search should be completed by the background investigation firm at the source (as opposed to via the Internet or via CD-ROM database retrieval), with criminal searches performed at the local superior and/or municipal court for the most up-to-date records. That being said, a search of a criminal database along with searches at the local jurisdiction cast a wider net and may identify crimes in a county where the subject never lived. Just be careful not to use a database as the only method and tool for your criminal search. Various industry experts agree that database searches, although helpful, may offer a false sense of security if not used in tandem with investigations at the source of the original record (for example, at a courthouse or hall of records). In fact, if you rely solely on a database to conduct your criminal search and that particular database misses a conviction, you could likewise be held liable for a negligent hiring claim.

In his book Sleuthing 101: Background Checks and the Law, author Barry J. Nadell states (on page 29):

The information derived from public record databases may be outdated and/or inaccurate. The National Criminal Database Search should be used as a conviction locator'' only as it may provide additional criminal information not found by researching the county or state of residence or all counties found on the subject's social security trace or credit report. When using the National Criminal Database Search, it is crucial to conduct county criminal searches to perform proper due diligence and comply with the law. Identification of individuals is based on name and limited identifiers; consequently, misidentifications may occur.

The number of years of criminal history that can be typically investigated depends on the laws of your state. The MVR is important because warrants for arrest may appear on them. Driving records can likewise include driving under the influence (DUI), possession of drugs, and failures to appear before a court. The social security trace is not absolute in verifying the accuracy of the individual's social security number but is primarily used to identify counties (and aliases) where the subject has lived.

Additional searches for additional fees may include a candidate's:

• Credit report

• Education verification

• License verification

• Military records verification

• Workers compensation filings (post-offer applicants only)

• Sexual offender/child molester identification requests (for example, for school employees, home health employees, child care centers, or in any cases where companies have ''parties at risk'')

Credit reports should generally be conducted only when applicants have a fiduciary responsibility to your company or handle cash. Accounting, finance, and senior management candidates typically should have their credit histories checked. In those types of roles and positions of trust, the applicant's financial condition is likely to be relevant to the position, and a credit check can be justified. By acting responsibly in evaluating candidates' credit histories, you'll mitigate risk by protecting yourself not only from in-house loss or theft but also from actions brought by others if the employee acts wrongfully on your behalf.

The cost of a basic package ranges from $25 to $100 per search. You may be able to create your own package deals for a discounted fee by guaranteeing the firm a certain number of searches per year. Ancillary services like credit checks or education verifications may cost anywhere between $10 and $25 per search. Court fees may apply as well. Turnaround time is typically twenty-four to seventy-two hours; however, education verification or out-of-country searches may take longer.

In addition, it is critical that your background investigation firm follows the laws established under the Fair Credit Reporting Act (FCRA) as amended by Congress in 1997 and the Consumer Reporting Employment Clarification Act of 1998 as well as applicable state laws. Penalties for non-compliance include actual and punitive damages as well as costs and attorneys' fees. In some cases, civil or criminal penalties may apply.

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