Background Checks - Pre-Employment Screening

For the last couple of months, I have been working with H4B / PeopleCheckers.com. I mention this because of the increased pressure on small businesses to do mandatory background checks. As a consultant, I get many questions regarding background checks and hiring, and while I generally refer these questions to experts in these fields such as PeopleCheckers.com - from experience, I am an advocate of conducting extensive background checks on people – before I hire them. Having been burnt by employee/partner dishonesty – I know the results of misplaced trust.

Pre-employment screening has been gaining ground out of necessity. Gone are the days of a simple reference check and a few phone calls to screen new employees. Today when you shake a person’s hand, you may end up losing fingers if you are not careful. One only has to read the newspapers to know that we are a growing society of security concerns, corporate scandals, and workplace violence.

Pre-employment screening incorporates a variety of different methodologies. The use of Psychological testing, Lifestyle Profiling, background checks, and drug testing are all warranted today. With all the requirements, changing mandates, and increased complexity, the use of a professional firm to conduct these deeper searches is cost justifiable and warranted today.

Background checking is a popular method of pre-employment screening. Over 96% of HR professionals report that their companies do background checks of new hires, up from 66% in 1996 according to The Society for Human Resource Management Workplace Violence Survey.
Investigating the background of a potential hire can help minimize the risk of negligent-hiring lawsuits. You and your company can be held liable for the actions of a new employee especially if you did not perform a background check. Example: A day care center hiring a known pedophile. A hospital hiring a Doctor whose qualifications are bogus, or a school - hiring a coach who is a convicted sex offender.

Prior to beginning a background check, it's important your small business comply with the Fair Credit Reporting Act and the American with Disabilities Act.
Employee Background Check Precautions

Using a outsource pre-employment screening company is not a replacement for a qualified HR Department. In fact, if anything, it is an enhancement of quality gained by using qualified personnel, in partnership with professional investigators. Using a professional firm lessens the potential for a lawsuit as well by shifting the burden of accuracy to the pre-employment screening firm and minimizes the risk of negligent-hiring lawsuits.

You and your company can be held liable for the actions of a new employee especially if you did not perform a background check.

Prior to beginning a background check, it's important that you comply with the Fair Credit Reporting Act and the American with Disabilities Act.. Under the FCRA, your small business is required to have employees sign a disclosure form granting authorization to perform a background check. The FCRA is not just restricted to credit reports but includes all “consumer reports." Laws will vary from state to state in how and what information can be used during the pre-employment screening process.

For instance, your state laws may prohibit using certain aspects of a criminal record during a background check. Your state may have different laws, such as California's Investigative Consumer Reporting Agencies Act. Consult with local regulators and legal counsel before going too deep into the criminal past of a new hire.

Employment Background Checks and Federal Law, the FCRA

The federal Fair Credit Reporting Act (FCRA) sets the national standard for employers who want to find out more about an applicant or current employee. Sometimes mistaken for the credit reporting law, the FCRA covers much more than credit reports. It is enforced by the Federal Trade Commission (FTC), www.ftc.gov.
The FCRA covers “consumer reports.” In addition to credit worthiness information, it covers information about a person’s “character, general reputation, personal characteristics, and mode of living.” This is the type of information you as an employer usually need to know. Thus, whether a credit check is included or not, an employment background check is a type of “consumer report” that is covered by the FCRA.

Be aware: For an employment background check to qualify as a “consumer report” under the FCRA, it must be prepared by a third-party consumer-reporting agency.

Many small business agencies such as SCORE or the Small Business Administration (SBA) can provide counsel. Visit your government’s websites on FCRA and ADA. Background screening should now be a standard practice of operating a successful small business.

If you want additional information, contact Charles Douglas at PeopleCheckers – a Division of H4B, Inc. Mr. Douglas has been conducting forensic level investigations on people and businesses for 20 years and he is an excellent advisor. Office Phone 720-898-5487 or write him at CDouglas@PeopleCheckers.com
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Copyright 2008 - Gary A. ClarkGary Clark is a Freelance Commercial Writer and Web Content writer who for 25 years has been both a Consultant and instructor of Small Business Entrepreneurship. He can be reached by e-mail at GAClark@Write4me.net, or by phone at 719-536-0505- Mon thru Fri / 9:00 AM to 5:00 PM (MST)