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?
Tom Lawson, the founder of APSCREEN, the oldest screening firm in the
country, says ¡°The necessity of a background check has been
established now, and that's why we are seeing such a proliferation of
people getting into the business - particularly because the internet
makes it an easy field to enter because of the low start-up costs.¡±
Lawson continues, ¡°But back in 1980, when we practically invented the
concept of employment screening, companies had to be convinced that
there was a good reason to spend money on background checks. We have
always been a business that focused on training our specialists to
screen applications for completeness, thoroughness and accuracy and
provide our customers with
individualized service. This trend of online databases is very
disturbing to us because the potential for error and liability is very
high.¡±
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 llimited 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. 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:
1. The bridge software used to import the jurisdictional data into the
database company's memory banks can never be 100% reliable, as long as
the compiler is gathering information from ¡°foreign¡± repositories
2. The computer has to handle many different formats while compiling
information into a standardized format so that some of the data simply
does not transfer.
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
nformation 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:
¡¤ Premises liability for not safeguarding customers from employees who steal, lie, cheat or injure
¡¤ Negligent hiring liability in the event of violence or fiduciary
malfeasance, for not providing other employees a safe place to work
¡¤ Termination or investigation of the individual who hired an
applicant who later steals from the company or exposes the company to
the above-mentioned liabilities.
¡¤ Litigation under officer/director liability theories because of
incompetent or inept hiring practices involving the company and/or
person who hired the employee
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.
