This Workplace Watch article focuses on background checks – why and how this tool is used to assist employers in making good hiring decisions. We will also explore the specifics of background checks – what information can be included, details of why background checks are important and who is able to conduct background checks. This and more, in this edition of the Workplace Watch series, brought to you by Doherty Employment Group.

Background checks are becoming more commonplace in today’s business environment. The current emphasis on security and safety in society and business has dramatically increased the number of companies who are choosing to conduct pre-employment background checks. No longer are employees being hired or promoted solely on information supplied through an application form or provided in an interview. Instead, businesses have moved to a new level of verification to validate the information provided about a person’s background and experience. Although it is not a new phenomenon, some federal and state positions require background checks as a condition of hire. 

Why Do a Background Check?
Employers check potential and current workers for several reasons including: 

• Executive management liability.  Corporate executives, officers and directors now face a degree of scrutiny in both professional and private life due to recent corporate lawsuits. 

• False or inflated information.  Reports indicate that 30% to 40% of all job applications and resumes include some false or inflated facts.

• Federal and state laws.  Certain positions require that background checks be conducted. 

• Availability.  The availability and ease of accessing computer databases is helping employers find it more feasible to conduct background checks. 

• Protection from negligent hiring.  The threat of liability and lawsuits give employers reason to be cautious in checking an applicant’s past. Employers no longer feel secure in relying merely on their instincts as a basis to hire. 

• Current events.  Events in the world, including terrorist actions and guerilla tactics have led to an increase in employment screening in addition to heightened security and identity-verification strategies by employers. 

• Child abuse and child abductions.  New laws have been passed in recent years that require criminal background checks for anyone who works with children. 

What Aspects of a Person’s Past Can Be Checked? 
Background reports can range from a verification of an applicant's Social Security number to a detailed account of the potential employee's history and acquaintances. Here are some of the pieces of information that may be included in a background check:

• Driving records

• Vehicle registration

• Credit records

• Property ownership

• Education records 

• Court records

• Criminal records

• Social security number

• Past employers

• Military records 

• Incarceration records 

• Sex offender lists

Who Conducts Background Checks?
You can conduct a background check on your own or hire a company to do them for you. In the current information age, it is relatively easy for employers to gather background information themselves.  Much of it can be found through various websites allowing employers to log on to public records and commercial databases.  This information may not be completely accurate at all times so it is important to work with a trusted source. You should also use information obtained from some sources as a supplement to other information, not as a sole determinant of eligibility for hire.

As an alternative, a company can outsource background checks to a third party that specializes in employment screening or private investigation.  When background checks are outsourced, the Federal Trade Commission through federal legislation called the Fair Credit Reporting Act (FCRA) regulates the background checking process.  The Fair Credit Reporting Act imposes significant responsibilities on anyone involved in the background check process.  Candidate notifications, both before a check is done and after a check is done are required.  Additionally, if a company decides not to hire a candidate based on the results of a background check, additional notifications and actions are required to comply with the FCRA.

• Bankruptcies after 10 years

• Civil suits, civil judgments, and records of arrest, from date of entry, after seven years

• Paid tax liens after seven years

• Accounts placed for collection after seven years

Generally, when a company conducts background checks on its own without using an outside party, it will not be subject to the provisions of the FCRA.

Summary
Background checks can result in a higher quality applicant pool, reduce legal exposure, reduce the possibility of theft or embezzlement, reduce workplace violence and give employers peace of mind.  They can also be expensive, take a lot of time due to state and federal timelines, result in inaccuracies such as mistaken identity or wrongful convictions and may have an adverse impact on your organization (creation of mistrust among existing employees).

Companies are now instituting diverse and sophisticated selection tools to determine the best candidates for a position or organization.  Background checks are one such tool.  Understanding what is included and how they are conducted will help assist you in making good hiring decisions for your company.