Employee Background Check 101

Employee Background Check 101

56% of all job applications contain incorrect facts, 65 million Americans have criminal records, but there is a 41% error rate in the national criminal database!
Jared Rosenthal
Published on

Vital Background Check Information for Employers

FACT: 65 million Americans have criminal records.

FACT: 56% of all job applications contain incorrect facts (Society of Human Resource Management, a/k/a “SHRM”)

According to the latest SHRM poll, 96% of human resources departments conduct background checks on prospective employees. But not all background checks are adequate. And if you do it wrong, you expose your company, staff, and clients to enormous risk, danger, and liability.

Negligent Hiring Lawsuits

If one of your employees decides to go postal, or injures another employee, or does something illegal, lawyers will swarm. Other employees – especially the ones that were injured by the bad actor – can sue you for “negligent hiring”. They can claim, in effect, that you should have known better. You should never have hired this individual. Why? Because it would have been prudent and quite simple to run a background check. Not just any background check, but the correct one.

Look, it’s a fact that around 5% of all American workplaces witness an incident of workplace violence each year, according to OSHA. Let’s assume that many of those people committing violent acts in the workplace were, in fact, screened before hiring by one of those 96% of all companies that claim they run background checks. How did they slip through the cracks? Does just running a screening insulate you from the serious risk of negligent hiring lawsuits? Absolutely not.

First, let’s look at what exactly the risk is: Faulty hiring cases have had verdicts up to $40 million (Gurtin vs. Nurse Connection, et. al., 2002), and employers have lost over 79% of negligent hiring cases (Public Personnel Management, 2001). Got your attention yet?

The Benefits of a Thorough Background Check

A basic background screening may comprise of a database search, which reports on criminal records, perhaps driving records, social security number verification, and/or a sex offender registry search. A survey conducted by the Los Angeles Times revealed that about one-third of US employers utilize credit checks for screening potential recruits, though this practice remains controversial. Still others prefer verifying claims made on the resume and during the actual job interview. More comprehensive searches check references, verify employment history, and check licensure, education, and other certifications claimed by applicants.

Off Limits for Background Checks

There are some records that are off-limits even for background checks. According to the Privacy Rights Clearinghouse, the following things shouldn’t be seen by an employer, lest the applicant claim discrimination in hiring: civil suits/civil judgments/arrest records after seven years, financial accounts placed in collection more than seven years ago, and paid tax liens post seven years. (Note that a more lenient standard may be applied if a criminal conviction is reported by the media and in the public domain).

Why Background Checks Can Go Wrong

Amazingly, there is a 41% error rate in the national criminal database. The reasons for errors include: data misclassifications due to prior identity theft, arrests of a family member, convictions of people with similar names and DOBs, incomplete data, inaccurate data entry, and the list goes on and on. In fact, many US counties do not even report their crime data to the national crime index.

What is the National Criminal Index, anyway?

For one thing, it doesn’t include federal crimes. Therefore, it’s really a conglomeration of state and county crimes. So, you have thousands of independent jurisdictions reporting up through the chain to this one, massive database. And as they say: “garbage in, garbage out”. The National Consumer Law Center has reported that database reporting from the national crime index regularly presents bungled up records, missses vital information, discloses expunged information, discloses arrests that didn’t lead to convictions (a big “no-no”), and misclassifies crimes.

What’s a Company to do?

Health Street recommends that all background checks include a repository search, which can be bundled conveniently as a Court Record Package. This eliminates the errors and incompleteness that are known to occur in the national criminal databases. Actual human beings reviewing actual courthouse records – to find the most current, complete, and accurate criminal records available – is the best way to go to protect your company from hiring criminals and to prevent your company from being named in a negligent hiring lawsuit.

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