The most prominent trend in the employment screening industry has been
a proliferation of online databases offering cheap background checks. Any
one can access the internet and with a quick search be able to purchase,
for example, criminal records for a low fee. While that is very appealing
to companies looking to trim the budget on background checks, it may in
fact be a dangerous trend.
What do the companies say that have been running background checks, back
when employment screening "industry" was just a concept and not an accepted
practice?
The Dangers of Databases - Caveat Emptor of the Quick Turnaround
Databases are only as good as the search logic used to retrieve stored data,
and search logic is expensive and only as good as the amount of money the
database companies are wiling to invest in it. Unfortunately, the advent
of the internet has made starting an online business easy for anyone. As
a result, many companies that start an internet "data selling" business
do so because the start-up costs are small which means the databases can
only provide limited information.
Even worse, most online database providers lack an intimate working knowledge
of how to screen potential applicants. Their focus is on selling units of
information for profit.
Database companies cannot simply use off-the-shelf software to retrieve
publicly compiled repository information. It comes in too many proprietary
"operating systems' and while good, expensive search logic helps to delineate
between the different languages of the information entered into the database
company's archival system, it can NEVER be 100% "competent", even if it
is a very "robust" retrieval architecture.
By the sheer science of databasing, 100% information retrieval capability
is impossible, unless (as demonstrated recently by the IRS and FBI Computer
fiascos) the "source" data originates from wholly compatible systems. This
means that going in you can never expect to have a complete file when you
compile data from different systems. This results in "data drops" in which
bytes of information mysteriously disappear, as well as computer viruses
which can reside undetected in mainframes for years and indiscriminately
wipe out data, which would be undecipherable in a foreign operating environment,
such as a third party compiler.
A classic example of this occurred on January 17, 1990, when screening client
District Cablevision received a now infamous incorrect report of a felony
cocaine conviction on one James Russell Wiggins, which was not verified
for accuracy or its relationship to the subject Wiggins, and which resulted
in a serious elimination of candidacy lawsuit brought against the provider
based upon slander. This error dealt a major blow to the reputation of the
provider and resulted in the payment of a substantial monetary settlement.
(US District Court, District of Columbia; Civil Action 90-199; Wiggins (et
al) v. Equifax Services, Inc. (et al).)
Database companies outnumber legitimate employment screeners almost 75 to
1 in the industry today.1 The main problem with such vendors who advertise
"nationwide criminal checks," "statewide criminal checks," "instant", or
"online," is the veracity of the data they are selling and the competency
of the search used to retrieve the data.
Many vendors acquire data from a multitude of sources, not having any idea
who compiled the information in the first place. This data is then combined
into each vendor's own format, which often does not contain complete information.
The common term in the database industry is "data drops," which in addition
to the above meaning also means that not all of the data, such as criminal
record information from a court jurisdiction that is put into the database,
is available to be extracted, retrieved or researched. This occurs because
of the following:
This is a problem because of the technical department's inability to
inform the sales/marketing department properly as to the database's limitations
or unwillingness to tell the customer that the product it is selling may
be deficient in some areas. As a result, approximately 5 to 8% of the data
is lost. That means that there is a 92% to 94% chance (at best) to identify
a record on a candidate. Also, data drops are indiscriminate. Rape convictions
are dropped as easily as traffic tickets.
The second problem with databases is the psychological dependence they engender
on those using them. As time progresses, the databases' ease-of-use causes
the user to forget just how important it is that the database be accurate
and complete, and that the need for thoroughness in screening an employment
candidate should never vary, as to ensure consistency in the screening process,
thus precluding the successful prosecution of the employer for Title 7 claims.
The results of falling into this pattern of laziness can be disastrous as
litigation may not be far behind.
Crucial Steps in the Employment Screening Process
Historically, and until the late 1970s when the "personnel" department recognized
the need to get involved in employment screening, background checks were
performed by security departments – typically comprised of highly qualified,
and often retired professionals.
Today it's up to the HR department to create the mandatory steps needed
to develop a thorough employment screening procedure including for starters,
a positive candidate identification process. If this isn't the first step
in the background check, the results of your searches could be faulty and
therefore prove useless.
For example, critical identification data needs to be gleaned from credit
bureaus and other repositories including unused maiden names, or intentionally
omitted information such as date of birth and variations in social security
numbers. This is where the difference between true employment screeners
and data sellers comes into play. It takes years of experience to be able
to differentiate, for example, intentionally omitted information versus
an honest mistake.
The same holds true for incomplete disclosures such as partial criminal
history in which the full story can dramatically change your assessment
of the applicant. One such case involved an applicant who disclosed to the
company that she was convicted of trespassing. When the criminal check came
back, however, it was discovered that while she had indeed told the truth
that she was convinced of trespassing, she had also been convicted of trafficking
in child pornography and possession of controlled substances – a serious
error by omission.
Hiring decisions must not be made on partial, incomplete or incorrect data,
but on thorough information and a consistent application of thorough scrutiny
of all of the information regarding criminal, credit, work and education
history, driving attitude, whether or not the candidate has completed the
application completely, as well as identity disclosure.
A screener must have extensive knowledge about each vendor source to make
the appropriate follow-on decisions that develop into a full and comprehensive
report.
Online databases don't provide highly trained researchers who can spot "red
flags" and other indicators in an application that demand further consideration.
You can only get this kind of service from an interactive screener who has
years of experience in processing background checks.
Another reason online databases can be cause potential liability is because
most databases contain information that may not be used in the screening
process such as arrest records, or unadjudicated matters, or matters for
which an expungement exists at the Court but is not reflected in the database.
As previously stated, professional background checks require an experienced
researcher who knows what to look for including: verifying a applicant's
true identity, obtaining verification of past employment and education,
fully investigating the applicant's criminal past (a skill that requires
an intense, and multi-level knowledge of court procedures, credit evaluation
including legal records such as bankruptcies, tax liens and judgments, driving
analysis, as well as a history of being a sex offender or involved in domestic
violence or retraining orders for stalking. All of the factors contribute
to, but may not necessarily be germane to the job description, at hand,
and while exciting, could lead an employer into court, for using the information
to deny candidacy, for inapplicability.
By now it should be fairly clear that professional background checks are
a comprehensive package that far outweigh any "bits and pieces" of information
that can be provided by any individual online database. When a person is
thinking about hiring someone and they believe that "all I really need to
do is run a fingerprint check," they are really missing the point. So much
more information is needed to make a careful, informed hiring decision.
Besides, only police departments run fingerprint checks, not employers.
Liability Risks of Not Performing Background Checks
In today's hiring environment employers face ever increasing potential for
liability from the workplace when they choose not to do background checks
on their news hires. Those liabilities include:
To prevent this type of litigation, a company must have established a
refined HR policy that includes a professional employment screening component.
You must become knowledgeable about employment laws which a good background
screener can help you with. For example, did you know that it is illegal
to make a decision to not hire someone based on an arrest record alone?
Usually, the only time it is legal for a third-party provider to release
arrest information is in the case of daycare providers and nuclear facility
workers. An employer, generally is not allowed to ask about arrests and
cannot use this information to deny employment
Critical Tips For Choosing an Employment Screener
So what should you be looking for in an employment screening company?
First of all, look for longevity. The longer a company has been providing
background checks, the more experienced it is, and as a result, the knowledge,
they will have in recognizing the signs of a "suspect" applicant. This is
a field where screeners need not only be highly trained, but have extensive
experience.
Ask for references and then call them. You want a company with an extensive
and positive track record of providing factual information so you can make
an informed hiring decision.
Look for the company's professional memberships in organizations such as
ASIS, SHRM, PIHRA, NPRRA, NAPBS, as well as others. This indicates a combined
knowledge of the screening and security industries.
Do you as the hiring company; have a complete knowledge of employment law?
If not, you need your screening company to know the laws involving background
checks. If is extremely beneficial if you hire a company that has an acute
knowledge of "negligent hiring" practices, much in the way that an Expert
Witness would know.
The company should have an intimate, thorough and long-term knowledge of
the Fair and Accurate Credit Transactions Act (FACTA), and the Fair Credit
Reporting Act (FCRA), as well as Sarbanes-Oxley, the Gramm-Leach-Bliley
Act, and the myriad local statutes that may or may not apply to the employment
process. They should also have the ability to testify for you in a court
of law if need be; or even better, keep you out of court in the first place!
Does your prospective screener have knowledge and understanding of current
HR management systems? How about corporate due diligence programs or factual
employment screening programs that train people to find fraudulent applications
and false identities?
Are you beginning to see how there is so much more to background checks
than first meets the eye?
In short, can your vendor help keep you from unwanted litigation? Unless
you or someone in your company is an expert in employment law, you are putting
your company at significant risk by using an online database provider. If
you are using any of the multitudes of online databases, it's not likely
you are protected.
Not only do these online companies increase your risk of exposure, they
may even add to it. For example, let's say you are currently using an employment
screener that does not require you to provide a signed release for each
applicant. Sounds relatively harmless, doesn't it?
The truth is what these companies have done is had you waive liability to
them when you signed up for an account so they can avoid the time and effort
it takes involved in this critical step. Their focus in on increasing their
sales; which isn't necessarily in your company's best interest.
In the case of a credit bureau audit, your company is now responsible for
producing an original signed application and therefore also liable if you
don't have one on file. A good employment screener is not only a long-term
certified credit bureau, they also provide signatures for these audits on
a regular basis and you should never even know when theses audits occur.
A typical lawsuit of this nature could cost your company six figures. There
is no upside for a company purchasing background checks to take this kind
of risk.
What type of criminal conviction research, hand-researched or online databases,
does the company provide? Most companies do not realize that there is absolutely
NO single source of information available regarding criminal convictions.
It doesn't exist – anywhere. Do they verify these discoveries against subject
identifiers and if so, how?
Does your online provider claim to have worker's compensation claim records?
Any information provided regarding worker's compensation claims potentially
provides a false sense of security for the user. The truth is the only records
available for worker's compensation are appeals, not claims, and much of
the available files are sealed because they are not as yet adjudicated.
This means the file competency rate for this type of data is about 40% –
not good enough.
Does the employment screener have international research capability? If
not, how will they screen people you might want to hire from overseas? Without
the kinds of connections and a network of relationships developed over long
periods of time, this information would be almost impossible to get.
Has the company you want to hire ever been involved in a litigation themselves
for improper screening processes? Can they provide you with at least three
long-term references? Do they have professional liability insurance including
errors and omissions? Are they FACTA, FCRA; CCRRA, and G-L-B compliant?
And of course you need to know the practical things such as cost, turnaround
time and reporting method. Many competent employment screeners are listed
in publications such as the Security Industry Buyers Guide as well as industry
publications such as those connected with the Society of Human Resource
Management (SHRM) and the American Society for Industrial Security (ASIS).
What is needed now in this industry is a standardization of compliance for
employment screeners and someone to step up and create an industry co-operative
that can police it.
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