How Revealing Are Background Checks?

Feb 1, 2005 12:00 PM, by MICHAEL FICKES

Does your company require background checks for prospective employees? If not, it might make sense for the security department to lobby to have them done, says Barry Nadell, president of InfoLink Security Screening Services, a Chatsworth, Calif., firm that provides background checks, drug testing and physical exams for small and large companies.

“Security departments have an interest in background checks because it will be security that will deal with disgruntled employees, termination issues and perhaps violent behavior,” Nadell says.

If a company decides to contract with a third party for background check services — and most do — then security, loss control, human resources (HR) and purchasing people should work together to choose the provider, Nadell continues. “While the purchasing department might consult on the price of these services, pricing is secondary compared to what kinds of background checks to perform, accuracy, turnaround times and legal compliance.”

Full background checks verify information provided about past employment, education, criminal record, credit, driving records and social security. Today, full checks include searches of terrorist and drug trafficking databases as well as sexual offender lists. Specialized applicants might also be checked against debarred contractor lists and national practitioner databanks. Full background checks can go on and on.

“Checking everything is overkill,” Nadell says. “For example, if a person cannot affect you financially, there is no reason to do a credit report.”

InfoLink recommends a basic investigation that includes checking criminal history, getting a motor vehicle report, and doing a social security trace. Other components might be added to the search, depending on the responsibilities that go with the position. References are critical, Nadell adds, but employers often do their own reference checks.

Are background checks really worth the trouble? According to a recent InfoLink analysis, the answer is yes.

At the end of 2004, InfoLink compiled the results of hundreds of thousands of background checks conducted during the year. The results are surprising.

The analysis found that 8.4 percent of the prospective employees considered by InfoLink clients during 2004 failed to reveal criminal histories requested on job applications.

Just more than 40 percent did not mention infractions on their driving records. Thirty-six percent hid credit problems, and 25.8 percent left out information about past employment.

Discrepancies between applications and Social Security records showed up for 4.2 percent of the applicants. Worker's compensation claims were not mentioned by 8.3 percent of applicants. Finally, 3.3 percent of applicants tested positive for drug use while their applications denied drug use.

According to Nadell, the figures justify background checks. “Federal law requires that prior to performing a background check using a third party, an employer must disclose to the individual that a background check may be conducted,” he says. “Before conducting a background check, an employer must get a prospect's authorization in writing. So our survey looked at people who knew they would be checked. ”

What does that suggest about those applying for jobs at companies that do not check records and so do not mention the issue to applicants? “I think the number of applicants who do not mention criminal convictions or other problems would be substantially higher at those companies,” Nadell says.

InfoLink clients tell their applicants a background check is coming. Still, some applicants fudge, fib and worse. One man who applied for a job with an InfoLink client revealed that he had been convicted of involuntary manslaughter. The application explained that a person riding on the back of the applicant's motorcycle fell off and was killed. The company's HR department thought the explanation was plausible and wanted to pursue employment discussions. The company asked InfoLink to conduct a background check. “The applicant had been convicted of involuntary manslaughter,” says Nadell. “But what really happened is that he killed a guy in a bar fight. That gives you a whole different picture.”

Of course, not all of the discrepancies uncovered by a background check are serious. Many have reasonable explanations.

Still the value of checking shines through in some cases. Last year, a home healthcare agency that works with InfoLink asked for a background check on a female applicant. The check revealed a conviction for burglary two years earlier. The company did not hire her. Three weeks later, InfoLink's court researcher recognized the woman in a local newspaper article. She had been arrested for the kidnap and murder of a child.

“Every company should conduct appropriate background checks on prospective employees,” Nadell says. “No exceptions.”

A VALUABLE TIP

If you are sued for negligent hiring liability, the first question your attorney will probably ask is“Did you do a back-ground check?” If your answer is “No,” and a subsequent investigation reveals an employee's prior criminal behavior, your attorney will most likely advise that you settle the case rather than go before a jury.*

*From Sleuthing 101: Background Checks and The Law by Barry J. Nadell., InfoLink Screening Services Inc., 9201 Oakdale Ave., Suite 100, Chatsworth, Calif. 91311-6520. Phone: (818/800) 990-4473.

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