With the proliferation of recent high-profile corporate and clergy scandals, workplace violence incidents, and terrorist attacks, it seems inconceivable that some still question the necessity of background screening. Numerous studies have documented the staggering costs associated with replacing a bad hire, employee theft, and negligent hiring lawsuits. Yet others have quantified the alarming percentages of resume misrepresentations and applicants with criminal records.

SHRM survey

A survey conducted by the Society of Human Resource Management (SHRM) revealed a significant increase in the percentage of companies that performed criminal checks on job applicants between 1996 and 2003, and the percentage that performed credit checks nearly doubled. In 1996, 51% of companies conducted criminal background investigations. That number increased to 80% in 2003. Companies reported that 19% conducted credit checks in 1996, which escalated to 35% in 2003. Yet the percentage that checked employment (84%) and personnel references (92%) in 1996 declined slightly to 79% and 80%, respectively, in 2003. Educational reference checking remained relatively consistent from 51% in 1996 to 55% in 2003.

With the increasing level of sophistication in perpetrating resume fraud and with many companies providing only limited reference information, we might assume that employers perceive information to be more factual as well as easier to obtain than is truly the case. It is every HR professional's responsibility to understand the ideological foundation of a screening program as well as the technical aspects of its components.

Legal considerations

A consistent screening program can minimize liability exposure based on allegations of discrimination and negligent hiring. However, numerous federal and state guidelines dictate the propriety of job application materials, interviews, background investigations, and hiring procedures. Among the most important of these are the Fair Credit Reporting Act (FCRA), the Age Discrimination in Employment Act, the Americans with Disability Act, and the Civil Rights Act/Equal Opportunity Employment Commission (EEOC). These guidelines evolve continually and must be reviewed and adapted accordingly. Furthermore, there are specific requirements for employee screening in select industries or positions regulated by federal government agencies.

The recent amendments to the FCRA perhaps anticipated the credit check's expanding significance as a screening tool, no longer relegated to those potential hires in money-handling positions. Applicants must be advised of, and consent to in writing, the intent to obtain a credit report, and they must be given a copy of the report and a summary of their rights if adverse action is taken based on its contents.

Understanding criminal history searches

With the growing reliance on criminal background information, we must examine what a criminal history search encompasses. Despite names implying the contrary, there is no single, comprehensive source for accurate and up-to-date criminal information short of fingerprinting potential new hires for submission to the Federal Bureau of Investigation. A Federal criminal search reveals convictions based only on federal law, which does not include state and county violations. The National Criminal Record Locator accesses a repository of records from state and county courts, but does not encompass all states. Many states have centralized criminal record repositories, but not all are accessible, nor do they draw from all court sources. Often there are cumbersome access requirements, costs and prolonged turnaround times that affect the timely reporting of results. County court searches are characteristically the most up-to-date and accurate; however, each search is limited to a single county. County records can be supplemented by lower, district, or municipal court information.

Consideration should be given to searching an applicant's residential and employment history for a period of seven years as well as searching alias and/or maiden names in the same jurisdictions. Liability exposure can also be created through lack of diligence if the search conducted is not reasonably comprehensive and a record is missed.

Both the FCRA and the EEOC establish strict guidelines for the procurement, dissemination, and adjudication of criminal information. Recognizing the limitations of the various sources, the FCRA requires that steps be taken to verify that information obtained corresponds to the applicant and is accurate, complete, and up-to-date. Whether information is obtained directly by the employer or through a Consumer Reporting Agency, it is the employer's responsibility to understand the informational source, the compliance status of any reporting agency, and their obligations to the applicant.

The EEOC provides that a criminal record alone may not be sufficient to deny employment. The adjudication standard must take into account the underlying behavior and gravity of the offense, the amount of time passed, and the nature of the position sought.

Maximizing results of reference checking

Sophisticated fraud schemes are making it more difficult to confirm the veracity of applicant-provided information. A CNN.com article in March 2004 ("Resume fraud gets slicker and easier") reported that in addition to websites offering phony degrees and toll-free verification numbers, computer hackers have infiltrated university databases, adding job candidates to class lists. Therefore, it is strategically critical to conduct other background inquiries, attempt to verify provided information through additional sources, and examine discrepancies.

Companies that verify only basic and objective employment information as a matter of policy or for fear of defamation liability should be equally concerned with the liability exposure created by failure to divulge negative information resulting in future harmful actions of an employee. As truth is a defense for defamation, companies and HR professionals are obligated to enact policies prescribing the timely and consistent documentation of an employee's negative performance or behavior and resulting disciplinary actions. If only limited information is provided by traditional sources, more detailed information, including eligibility for rehire, reason for leaving, and job performance should be secured from former supervisors.

Rather than relying on information provided by the applicant, independent confirmation of the address and telephone number for any educational or employment reference is recommended. Similarly, while an employer may request applicant-provided references, others should be independently developed and interviewed through the course of the investigation.

Spotting red flags

Adverse information in one search component may not be sufficient for rejection. Scrutinize for undertones of dishonesty, documented evidence of violence and substance abuse, unexplained gaps in employment, variances in social security numbers and addresses, and significant or repeated discrepancies between applicant-supplied and source-reported information.

Whether a company undertakes an internally managed screening program or engages the services of an outside screening vendor, successful implementation requires ongoing training and education in employment issues, legislation, and screening and interviewing techniques. A consistent screening program is the first step in identifying strong candidates, promoting diversity, reducing discrimination and liability, and creating a safe and secure workplace environment.

Alan T. Sklar is President of Creative Services, Inc, a personnel screening services firm. He is also a NEHRA member. He can be reached at (508) 339-5451 or asklar@creativeservices.com.