It is estimated that a single negligent hiring claim can cost a company upwards of $500,000 in legal fees and fines. Not to mention the psychological toll a traumatic event can have on employees and management. One simple remedy that employers can use is implementing new hire criminal background checks. By consistently screening employees as part of the hiring process, businesses are proactively fostering a safe work place while at the same time lowering their liability for any type of negligent hiring lawsuits.
Here are 5 ways employers can leverage background checks to decrease chances of negligent hiring lawsuits:
1.) Conducting Fair Credit Reporting Act (FCRA) compliant background checks
When administering employment background checks, it is mandatory to comply with federal law that specifically states the following:
- Obtain signed release form from the subject of the report
- Specific notices must be given to the subject of the report
- Criminal records can only be reported if they resulted in a conviction or plea of “no contest”
- Criminal records exceeding seven years should not be reported on the background check report
- If adverse action will take place (i.e. not being hired), then the subject of the report must be able to dispute the accuracy of the information
2.) Posted signage as a visual deterrent
Something as simple as posting signs visible to job applicants that the company conducts background checks on all employees will prevent undesirable candidates from applying. This will decrease the exposure to negligent hiring lawsuits, and even save you the time and cost of having to run the background check.
3. Utilizing accurate and “up to date” information
Employers must be as mindful as smart consumers should be. Unfortunately, the majority of employment background screening companies are misrepresenting the truth when they sell you a $10.00 background check. They may claim that it is comprehensive; however, it barely scratches the surface due to the fact that they are only using stale, inaccurate online databases. Employers feel they are immune to negligent hiring lawsuits and not liable since they are conducting these type of background checks. Case law has said that the employer may still be held liable for using results of a sub-standard background check.
4. It starts with the employment application
Employers need to understand the current landscape of employment background checks. The paradigm shift is going from disclosing all past criminal activity up front on an employment application to postponing it until the first interview or in some cases until a conditional job offer has been made. This movement is called “Ban the Box,” and it is only a matter of time until it affects every employer private or public. The result is that employers now more than ever need to run background checks to confirm or divulge any criminal activity.
5. Think outside of the box: what other criminal searches are at your disposal?
Criminal background checks to an employer can mean one of many things. A nationwide criminal search, a federal criminal search, county level criminal search, or statewide criminal search. These records are all different and are housed separately. Employers need to understand the value in each search and how they can leverage the information to avoid negligent hiring lawsuits.