Who goes there?

September 1, 2004 By    

The passing of Labor Day signals the end of summer and the time to beef up your work force for the rigors of another busy winter heating season. You post your trusty “Now Hiring” or “Drivers Wanted” sign outside for passing traffic to see, and maybe drop a few bucks to run a classified ad in the local newspaper. It’s a simple routine that has worked for years.

But beyond the information they put on their job application, how well do you really know the individuals who will be representing your business in the community?

The government helps identify qualified drivers through hazmat certification. (See sidebar, page 24.) If that’s the only requirement you have for hiring drivers in your company, however, you may be asking for trouble.

 A Social Security number verification can uncover false identities used by job applicants who are trying to evade screening of their personal history.
A Social Security number verification can uncover false identities used by job applicants who are trying to evade screening of their personal history.

According to Barry Nadell, president and co-founder of InfoLink Screening Services, a third-party employment screening firm in Chatsworth, Calif., the U.S. Department of Justice reports that one out of every 32 adults is a convicted criminal. Two-thirds of those are re-arrested within three years after release from prison.

Hiring applicants with criminal records or serious driving infractions carries serious legal risks. For example, if you hire someone who has a history of driving drunk and the employee causes an accident while on the job, you can be sued by the victims and/or their families under the concept of “negligent hiring.”

Criminal history can pose an even more serious problem. There have been cases where drivers or other employees with unchecked criminal backgrounds were hired and given access to customers’ homes. Crimes committed by the employee against the customer (assault/battery, rape, murder, theft, etc.) have resulted in lawsuits against the employer.

Another third-party screening company, American DataBank, claims employers lose 72 percent of all negligent hiring suits. A civil jury in Oakland, Calif., for example, awarded $11 million to a woman’s husband after she was murdered by a man who came to clean the carpets.

Screening Statistics

Many companies use third-party screening services to weed out undesirable applicants before they are considered for the payroll.

According to American DataBank, 45 percent of all applicants they screen have a criminal record, bad driving record, a workers’ compensation claim or bad credit history. Of those applying for positions in the transportation industry, 89 percent of those screened have false information on their resumes. Twenty-eight percent have one to three violations on their driving records, 28 percent have a negative credit history, 12 percent have filed workers’ compensation claims and 5 percent have a criminal record.

According to American DataBank, 28 percent of screened job applicants applying for positions in the transportation industry have one to three violations on their driving records.
According to American DataBank, 28 percent of screened job applicants applying for positions in the transportation industry have one to three violations on their driving records.

InfoLink’s statistics are similar. Among applicants in the transportation industry who have been informed there will be a background check and have authorized it in writing, 47 percent had problems in their driving background, 27 percent had problems on their credit report, 22 percent had discrepancies when their previous employers were called, 13 percent had criminal convictions, and 6 percent falsified their education background.

Where do all of these rejected applicants go next for employment? What about the prospects who didn’t even apply because they know the employer performs a thorough background check?

According to officials at private screening firms, they all gravitate toward employers who don’t do background checks.

Consultant Louis Rovner, president of Rovner & Associates in Woodland Hills, Calif., helps clients decide who should be hired based on screening and interviewing strategies, including the use of employee selection tests.

“I don’t provide third-party background screening services, but I do advise all of my clients to use them,” he says. “These services are usually inexpensive and provide a lot of good information.”

A recent survey conducted by the Society for Human Resource Management found that more companies are focusing on formal background checks of applicants in response to increasing levels of employee violence in the workplace. In 1996, 51 percent of human resource managers conducted criminal background checks. Today, 80 percent do. Nineteen percent conducted credit checks six years ago; the rate is 35 percent today.

AmeriGas Partners has been conducting third-party background checks for almost two years.

“It’s been working well, and I base this on the information we get about people who don’t get into our company,” reports Joe Geeter, corporate employee relations manager for the nation’s largest propane retail operation. AmeriGas has about 6,300 employees at 645 outlets spread across all 50 states.

Companies that hire drivers or other employees with access to customers' homes or premises can be held liable for crimes committed by the employee.
Companies that hire drivers or other employees with access to customers’ homes or premises can be held liable for crimes committed by the employee.

“We have uncovered everything from shoplifting to manslaughter, and these were people who knew we were going to do background checks and signed releases allowing us to do so.”

The Process

Simply notifying applicants that you use third-party screening helps scare away the majority of undesirable applicants.

Another way to narrow the field is to create a long and detailed employment application, since the easiest way to deny employment to an undesirable applicant is for falsification of information on an application. If you ask few questions and a background screen finds questionable information that you didn’t ask on the application, you must decide if the information is sufficient to deny employment.

Employment screening can be done under the guidelines of the Fair Credit Reporting Act, which states: “The term ‘consumer report’ means any written, oral, or other communication of information by a consumer reporting agency bearing on a consumer’s credit worthiness, credit standing, credit capacity, character, general reputation, personal characteristics, or mode of living which is used or expected to be used or collected in whole or in part for the purpose of serving as a factor in establishing the consumer’s eligibility for… employment purposes.”

Most screenings focus on criminal history, driving record, credit history, workers’ compensation claims and Social Security number verification. Motor vehicle, reports, for example, will contain information on DUIs, drug possessions, failures to appear, etc.

Industry experts say a criminal conviction or spotty driving record shouldn’t always prevent employment. For example, an applicant in his 40s with a juvenile offense and a clean record ever since may not be a bad employee. Each employer must judge how relevant a criminal record is based on the number and type of offense and how recent they are.

Some laws will prevent you from hiring individuals with criminal or traffic convictions for certain job positions, as well as implied employment responsibilities. For example, offenses such as battery can almost always be grounds for refusal to hire, since employers have a responsibility to prevent violence in the workplace.

“By finding out about a person’s criminal record and driving record, you can determine just how law-abiding the person is and how they feel about laws in general,” Rovner explains.

If an applicant has multiple violations, it indicates that he likes to pick and choose the laws he follows, he reasons.

“This is probably not a good thing for you, because it’s likely that the person will also want to select which of your rules he will follow. It also indicates a certain irresponsibility and lack of concern for other people,” Rovner cautions.

A Social Security number verification can help uncover false identities used by applicants who are trying to evade screening of their own personal history. If you find that the Social Security numbers don’t match, you either have someone who wrote down the wrong number (an honest mistake), or who doesn’t want to be traced (someone you don’t want to hire).

In terms of the credit check: “If a person is in enormous debt, he or she may be tempted to steal money or inventory from your company,” notes Rovner.

It is only necessary to seek an applicant’s credit information if the employee could affect you financially, such as having access to funds, credit card information or having a company gasoline credit card, according to Nadell.

As with other problems, applicants who have filed one or more workers’ compensation claims with previous employers shouldn’t automatically be disqualified. However, there are some concerns to consider.

Some individuals make a living through workers’ comp scams – getting themselves injured or faking injuries in order to live off benefits. When the payments run out, they look for new employment and the cycle starts over. There also are honest workers who are simply accident-prone and routinely get injured.

Experts say the best way to screen first for workers’ comp claims is to look at the names of the employers on the third-party screening report where the applicant filed claims. Compare this list with the names of previous employers the applicant listed on your employment application. If an applicant failed to list one or more employers on your application whose names appeared on the third-party screening report, the applicant may not want you to know about the previous claims.

The failure to fully report previous employers on the application is sufficient grounds (falsification of information) to discount the applicant.

“In other words, you don’t need to rescind an offer because they filed workers’ compensation claims, but rather because they falsified the application,” explains Nadell.

“If an applicant does list all employers where he filed claims, and if you are still considering hiring the person, then you need to make sure you can offer the person ‘reasonable accommodations’ based on their previous injuries.”

Details of Screening

A third-party background screen can cost between $4 and $80, depending on the types of searches requested, the number of references contacted and the number of counties searched for criminal activity. Unfortunately, a lack of reliable national or state criminal record databases makes it necessary to perform these searches by county.

InfoLink’s services cost anywhere between $20 and $60, according to Nadell, depending on the details requested as well as the volume of business the client provides. He says turnaround time can be one hour to several days, depending on the volume and depth of information requested.

“Our clients can request background checks via our secure website,” reports Nadell. “We e-mail the results within a few hours to two or three days.”

When you receive a screening report, check it against what the applicant wrote on application. If the information doesn’t match, you can easily dismiss the applicant for falsifying the application.

If it does match, you need to consider the information. The screening company cannot offer you advice as to whether you should or should not hire someone based on the information it provides.

“At AmeriGas, we have created a decision tree on what we will accept in terms of the information we receive from background checks,” says Geeter.

“For example, felonies are unacceptable, regardless of the type of felony, because our employees are people who visit customers’ homes.”

Applicants also are generally disqualified for misdemeanors if they involve drugs, violence, sexual misconduct or weapons.

Employers who reject an applicant based on information on his or her screening report are not obligated to reveal the report details that led to their decision.

“However, the law requires that, if an applicant asks why he was not hired, the employer must say that there was something in their report that caused them not to want to hire the person,” notes Nadell.

“You don’t need to provide the specific information. However, you do need to give the person the opportunity to dispute the information in the report.”

In those instances, the screening company will review their information.

Nadell says the rate of incorrect information is miniscule.

“In the very few cases it has happened, it is usually a situation where county court records were incomplete or incorrect, and we had to go back and get updates.”

How to Choose

AmeriGas began its search for a third-party screening service with a list of 17 providers. Geeter began to narrow the list using criteria such as how large they were, how long they had been in existence, what services they offered, turnaround time and price.

After narrowing the list to eight, he reviewed their names with colleagues. Together, they narrowed it down to three.

“I asked for proposals from these three. We then did dummy background checks of three individuals, sending their names to all three companies,” Geeter explained.

He evaluated each company’s report as well as their response times. ChoicePoint eventually won the contract, and AmeriGas has been impressed with their performance to date, Geeter says.

“I think background screening should be a requirement in our industry,” he adds. “Anytime you have employees who have this much contact with customers, we have an obligation to really scrutinize these people.”

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