Finding a Reputable Preemployment Screening Provider

written on April 17, 2008 by Ted L Moss

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Consider the following points:

  • The Society for Human Resource Management states that 45% of all resumes contain at least one major fabrication
  • The U.S. Chamber of Commerce estimates that 33% of all bankruptcies are due to employee theft
  • Identity theft for employment purposes has risen 104% since 2002
  • More than two million people suffer physical attacks on the job each year and the average workplace violence lawsuit exceeds $1,000,000 per case

The truth is, regardless of what any resume might tell you, you never know who is
coming through your door, and it only takes one employee to affect your entire operation.
The best way to protect your company from the fallout of a bad hire is through a solid
background check.

From a broad perspective, you can consider conducting a background check as ‘risk
mitigation'. Considering it costs between $7,000 and $15,000 to hire and train a new employee, one could argue your most valuable assets are your employees. The simple motivation for background checks is to provide a safe and secure workplace for employees and customers, as well as to make a profit.

What defines a provider -

A company that provides pre-employment screening is called a Consumer Reporting Agency (CRA). The FCRA (Fair Credit Reporting Act) regulates information obtained by a CRA. The information that these agencies provide are called consumer reports. A consumer report can include any number of specifics on an individual including but not limited to: credit reports, criminal and civil records, driving, employment, education and licensing information.

How to choose a provider -

At the minimum, insure that a consumer reporting agency meets the following minimum requirements:

Professionalism - The CRA is a member of national professional organizations such as ASIS International, NAPBS (National Association of Professional Background Screeners), and SHRM (Society for Human Resource Management) and is certified by the CDIA (Consumer Data Industry Association) for FCRA compliance.

Expertise - The CRA should act as a partner to provide expert advise on negligent hiring issues, FCRA compliance, federal, state and local screening regulations. The CRA must have detailed knowledge on FACTA (Fair and Accurate Credit Transactions Act), Sarbanes-Oxley and the Gramm-Leach-Bliley Act, and take steps to inform and educate their clients to insure compliance and to mitigate negligent hiring risks.

Accuracy - The CRA should obtain criminal conviction data from actual court resources, never from data purchased from third party data brokers. This database information can be outdated, inaccurate and usually does not provide misdemeanor convictions (70 % of all convictions are misdemeanors, which can include assault, domestic abuse, and other violent crimes).

Thoroughness - The provider should obtain misdemeanor information from actual municipal court sources, and not report only the misdemeanors they find at the county level (these would be felony charges reduced down to misdemeanor charges). Many providers claim to report misdemeanor records but in fact, are only reporting the ones they happen to find while performing the county level search. Misdemeanor jurisdictions must be searched also.

The good news is that most background checks can be done quickly, with an industry
standard criminal check, employment verification, and driving record taking about three
days. In addition, depending on the level of verification required, the check should run less than $100 per candidate.

Can I perform background checks in-house?

There are wide varieties of resources you can use to take on part of the background check
yourself, but use caution when doing so. Much legislation governs privacy concerns and fair employment practices, and this varies by state. In addition, a driving record search, under the Driver Privacy Protection Act requires a permissible purpose and written permission from the driver. There is also the Americans with Disabilities Act which prohibits asking questions of a medical nature on employment verifications, such as inquiring about alcohol addiction or substance addictions. You must also consider Equal Employment Opportunity Commission requirements, which prohibit hiring and screening policies that might create a disparate impact on a certain population or demographic based on arrest history vs. conviction history. The process can be fraught with pitfalls, so you must be educated on many issues to be in compliance with legislation. The question is: Do you as an employer have enough knowledge of employment law, and have the time and resources to invest in learning the pre-employment screening industry? If so, then it may be cost efficient to perform background checks in-house. In most cases however, an HR department or administrator does not have the resources to run a complete and thorough background check.

Resources:

Free Public Records resources:

http://www.crimcheck.com/freerecords.htm

SHRM - Resume Fraud Statistics - http://www.shrm.org/ema/library_published/nonIC/CMS_006087.asp

US Chamber of Commerce

http://www.chamberofcommerce.com/public/index.cfm?

FCRA

http://www.ftc.gov/os/statutes/031224fcra.pdf

NAPBS

http://www.napbs.com/

CDIA

http://www.cdiaonline.org/

FACTA

http://www.treasury.gov/offices/domestic-finance/financial-institution/cip/pdf/fact-act.pdf