- THE MAGAZINE
At one time or another all of us have hired people without checking references and backgrounds. Heck, we have done it without having the prospective employee fill out an application. We have at times failed to call previous employers, request a Department of Motor Vehicles (DMV) check, bond the individual or check their attitudes.
This is not prudent today with lawsuits more the rule than the exception. Nothing is more crucial to continuing the growth of a company and avoiding legal action than selecting and hiring employees. It’s more than selecting well-qualified people: It’s also a matter of carefully checking applicants and following the letter of the law to protect ourselves. The reality is that employers can be held legally responsible for the actions of their employees.
Diligent Research: The law recognizes only three degrees of diligence: (1) Common or ordinary, (2) High or great and (3) Low or slight. In my opinion, each of us must use high or great diligence in our hiring procedures.
Courts have made it quite clear that when a service person enters a home or place of business, he must have been screened.
Employer Responsibility: Employers can be held legally responsible for wrongful acts carried out by their employees. The list of precedent setting cases is long. Basically, we have to hire wisely and legally. Background checks can be done by any of several agencies.
Guidelines for Pre-Employment InquiriesAccording to the National Business and Legal Reports, the guidelines for hiring must be strictly adhered to.
Discrimination: The Federal Civil Rights Act of 1964 states that employers may use any professionally developed ability test provided that the results are not used to discriminate. We need to test and at the same time we must be aware of the accompanying legal problems with the tests.
Having an overall program is critical. It should start with a job description and trait list, and move through recruiting, screening interviews, testing, reference checks, comprehensive interviews and a final decision-making session.
When interviewing, many employers make the mistake of concentrating on the applicant’s skills and achievements, which are easy to discover and evaluate. Unfortunately, they ignore behavior traits, which are very difficult to discover and can have tremendous negative and legal impact.
Testing: In recent years testing has become both more attractive and more controversial. On one hand employers have turned to tests to develop objective, cost-effective ways of identifying the best candidates. On the other hand applicants, employees and minority group advocates have challenged tests as discriminatory and intrusive.
When you test for skill, knowledge and abilities make certain that the tests are related to an essential job function. Be sure, too, that reasonable accommodations are made for anyone with a disability.
There are many different tests to consider: Intelligence, aptitude, achievement, personality and honesty. We will focus on Honesty Tests—sometimes called Integrity Tests. These are professionally developed psychological tests designed to determine an applicant’s integrity by measuring his attitude toward dishonesty and propensity for theft-type behavior.
Employer use of these tests has risen dramatically since polygraph test were outlawed (with a few exceptions). A study by the Office of Technological Assessment questions whether Honesty Tests work as advertised.
However test publishers, employers and some researchers say they can reduce employee theft and other dangerous illegal behavior.
Applicant screening must be non-discriminatory and take into consideration that there are permissible and not permissible inquiries. Employers who use honesty tests have fewer problems than those who don’t use them.
Application Forms: Be very careful in choosing the questions you ask on application forms, by phone and interviews before an employment offer is made. Federal law requires employers to conduct the screening and hiring process in a non-discriminatory manner.
There is a two-prong test which determines if pre-employment inquiries are discriminatory: (1) if the inquiry tends to affect members of a protected class differently than it does the applicant and (2) if the inquiry is not justified by a bona fide occupational qualification or business related job necessity.
You should be extremely careful when considering whether or not to delve into the criminal records of applicants. Many courts have frowned upon employers who make employment decisions based on arrest records—an arrest without a conviction does not evidence any wrongdoing.
Further, refusing to hire all applicants with a prior conviction without a business necessity justification has been held to be discriminatory because it tends to disqualify a disproportionate number of minority applicants. On the other hand, rejecting applicants with a history of theft convictions can be justified by business necessity when an applicant will be entrusted with valuable property. Owners and managers must guard against ending up in court as defendants by failing to inquire into the prior criminal background of an employee who commits a crime on the job.
Equal Employment Opportunity Commission (EEOC): According to the EEOC revised policy statement regarding arrests and convictions employers may reject an applicant with a criminal conviction if they take specific things into account: These include the nature and gravity of the offense; the length of time elapsed since the conviction (or in cases where jail time was served since the applicant’s release) and how closely the conviction relates to any requirements of the job. The use of this information allows employers to legally reject an applicant.
Untruths: Some applicants and employees are less than truthful. The general consideration for employers is the increase in negligent hiring, retention and defamation lawsuits; spiraling recruitment and training costs; and an upsurge in workplace violence and theft.
More and more employers feel they have a right to know as much as possible about applicants and employees. Coupled with the fact that survey companies report that as many as 30% to 50% of all job applicants either lie or embellish facts on employment application forms and during personal interviews, the need to investigate and confirm employment data is even more critical.
Privacy Rights: However, in an effort to appropriately balance an employers need to know with an employee’s privacy and equal employment opportunity rights, many federal and state laws regulate the type and amount of information that employers can obtain. Therefore, those interested in conducting background investigations must be fully aware of each law’s specific requirement. They must tailor their employment practices accordingly or face the financial sting of stiff penalties.
Arrest & Conviction Records: There is no comprehensive federal law that regulates an employer’s investigation or use of an individual’s arrest and/or criminal conviction records. One must be careful as this could result in a disproportionate screening of minorities. Evidence of a criminal conviction, its nature and the related circumstances could be information that an employer arguably must consider in light of his company’s primary business (e.g., security, child care or home care provider). My thinking is that carpet cleaning/floor care also fall into this category.
Background Checks: Securing fingerprints as a condition of employment is perhaps the most intrusive of the background checks. Therefore, in an absence of governmental requirements, most private employers arguably have no reasonable basis for fingerprinting employees.
However, federal law does mandate that, in certain instances, such information must be obtained and processed for verification and checking: Child care workers, public and private school employees are two areas that are included. My argument for fingerprinting is that cleaners/floor care employees are in homes where children are present.
Financial Credit Reports: Under the Fair Credit Reporting Act (FCRA), credit-reporting agencies can provide background financial and personal information on prospective and current employees to employers. The act distinguishes between two types of reports. The standard consumer report must be requested first. It provides general financial and personal data information regarding an individual’s payment history, overall indebtedness, addresses of records, etc.
The second is the investigative report. It provides in-depth information regarding an individual’s character, general reputation, personal characteristics, mode of living, etc., obtained through interviews with neighbors, friends, professional associates and acquaintances. This type of report is very intrusive and requires that you inform the potential employee about it.
Educational Information Release: If you are checking on the applicant’s education and licenses you must follow the Family Educational Rights and Privacy Act. It can prohibit schools from releasing that information. The key is to get a written release from the applicant.
Reference Checks: Applications forms should include an employment history section for the applicant to tell why he left one place of employment for another. Vague responses (i.e. career change or work difficulties) aren’t always the whole story. Therefore, previous employers and supervisors could prove to be valuable resources for obtaining additional work history, general character, or performance information.
Despite state reference immunity laws, many previous employers insist on a corporate mantra of “name, rank, and serial number” to thwart potential defamation and other legal claims. However, some times important information can be obtained. You should always require an applicant to sign a release statement that authorizes you to contact past employers for job reference information.
Legally Using Data: Obviously, there is a lot of information that can be gotten legally. Perhaps the biggest challenge is not deciding what information to gather, but how to appropriately request such information and use it in a non-discriminatory and lawful manner. Try to keep these things in mind in your due diligence process.
Editor’s Note: While this article highlights some of the legal areas, it is not legal advice and ICS readers should seek good legal counsel for addressing their specific issues.
SidebarBackground & Reference Checking Guide
- Only research information in which there is a legitimate need to know.
- Request individual background checks only after making a job offer.
- Maintain as confidential all background information.
- Keep personnel records under lock and key.
- Develop and maintain a comprehensive and clear policy regarding the company’s right to conduct background checks.
- Provide every applicant and employee with an opportunity to explain any potentially damaging or negative background information both before and after discovery.
- Include a statement, placed above the applicant’s signature line summarizing the types of background checks that may be conducted.
- Insert a notice that providing false or misleading employment information can result in a refusal to hire, and if discovered after employment begins, can result in discipline or discharge.
- Require month and year designations for all employment and education information.