When an employer decides to hire or promote an employee, they should have a non-discriminatory legally compliant background screening program in place. Not only does this help employers ensure they are hiring the right person for the position, it also limits their organization’s exposure to negligent hiring claims.
Yes. The Fair Credit Reporting Act (FCRA) was enacted October 26, 1970 to regulate how employers use public record information (i.e. court records, driving records, verification, etc.) on background screening reports.
Consumer Reporting Agencies (CRA) are entities that collect and disseminate information about consumers to be used for employment purposes. CRAs have responsibilities under the FCRA which include:
Policies are in place to deter any claims of discrimination brought against an employer, which includes a background screening policy. By implementing a background screening policy, employers will be able to:
A compliant background screening program should consist of seven crucial sections:
It is estimated that a negligent hiring claim can cost an organization up to $300,000 in damages. If it is a class action claim, that number can increase into the millions. Now consider that job applicants tend to falsify their resumes and/or job applications. On average, 30% of resumes misrepresent the truth, generally regarding a candidate’s education and employment history.
Here are other advantages of performing employment background checks:
Pursuit to Section 606 of the Fair Credit Reporting Act (FCRA), employers must obtain a signed disclosure and authorization form from the subject (i.e. the applicant) of the report before requesting an employment background check. Providing the applicant with notices explaining their rights under federal and state law is also mandatory.
In a compliant background screening program, all employment background screening reports must comply with Federal Law (FCRA) and state law where applicable. The Fair Credit Reporting Act (FCRA) states that only certain information can be contained on an employment screening report. For example, bankruptcies that are older than 10 years may not be reported on an employment credit report. Criminal convictions that have been disposed (meaning a verdict was given in the case) that are older than seven years may not be reported on an employment background screening report.
Any public record information bearing on the applicant, including information about their character, general reputation, personal characteristics, and/or mode of living, which can involve personal interviews with sources as neighbors, friends, or associates.
These reports may contain information regarding:
As opposed to the price an organization will pay from a negligent hiring claim, background checks are considered to be very inexpensive. Public record information is rapidly reducing in cost; however, employers must still be cautious and carefully review the information provided by their background screening vendor. Accuracy of the information contained on the background report should be an employer’s paramount concern when conducting employee screening.
The turnaround time of receiving reports depends on the type of searches being conducted. For instance, if databases are being utilized (i.e. nationwide criminal, sex offender registry, and social security trace), the information will come back instantaneously.
If research is required for any searches requested (i.e. county level criminal search, verification of employment/education, and reference check), there will be a longer turnaround time for the information to come back. On average, county level criminal searches take between 24 – 48 hours to complete in most cases. If there are records indicated, the turnaround time may be affected.
Verification of employment and education depend on how the information is stored. For example, larger companies may use a third party system to facilitate the employment verification or education verification process (where in most cases, verification are instant) whereas smaller companies will have their Human Resources Department provide the employment verification.
A compliant background screening program may take either approach.
When an employer decides to implement a compliant background screening program, it is imperative that they select the right Credit Reporting Agency (background screening vendor).
Below are qualities that employers must look for when deciding on a background screening vendor:
Just like with any other professional service, organizations should “leave it to the experts.” When it is a dynamic and fluid field such as employment background checks, hiring a third party background screening organization to perform background checks should be a no brainer for businesses.
Here are a few reasons why utilizing a third party background screening organization will benefit a business:
This means hiring the right person for the right position, which can only be achieved by conducting thorough employment background checks.
Hire a qualified Consumer Reporting Agency to help your organization develop a compliant background screening program, procure compliant Federal and State background checks, and make a well-informed hiring decision.
One out of every six crimes occurs in the workplace and homicide is the second leading cause of workplace death in the U.S.
National Credit Verification Service reports that 25% of the MBA degrees it verifies on resumes are false.
72% of shrinkage is due to employee theft.
34% of all job applications contain lies.
30% of small business failure is caused by employee theft.