RISKVUE ARCHIVE | FEATURE STORIES

Pre-Employment Screening Programs, Part 1:
Due Diligence

By Don Stebbins

Checking an applicant’s records is generally necessary in order to avoid liability for negligent hiring practices. Several factors contribute to a successful pre-employment screening program. To meet due-diligence requirements, most pre-employment screening programs should:

1. Check all references offered by the applicant.

A reference check can be just as vital as a criminal background check in assessing the character of the applicant. Most employment lawyers will verify that defending an employer on negligent hiring practices allegations can be difficult, if not impossible, where the employer has failed to check employment references. If for no other reason, employment-reference checks verify the location of the applicant for the past several years and eliminate unexplained gaps in an applicant’s history that could represent undesirable activity. A solid work history is often indicative of stable character.

2. Obtain factual information to supplement impressions gleaned during personal interviews.

The background check should only seek out information that has either been directly requested from the applicant or that the applicant could voluntarily provide. There exists a fine line between diligent background investigation and invasion of privacy. If the screening process is used as a verification process of information offered by the applicant instead of a search for information that may disqualify an applicant, the process likely will not violate individual rights.

3. Be thorough enough and transparent enough to discourage applicants with something to hide, and to encourage applicants to be truthful.

Ironically, the most effective means of sorting applicants is notifying them of the company’s intention to gather and use background information. Employers find applicants with nothing to hide are not discouraged by citing successful completion of a background check as a condition of employment. Applicants who fear they may not survive a background review are not likely to apply. Therefore, make the required consumer-reporting disclaimer a vivid part of the application process, beginning with the advertisement. Prominent notice provides sufficient transparency. Remember, applicants should be asked to sign a background search consent form to reduce employer liability and to make all applicants aware that such checks will be performed. This is especially critical with respect to criminal background checks.

4. Comply with federal and state legislation.

In addition, employers developing employment-screening processes must consider the impact of expanding legislation regarding consumer reporting, discrimination and equal opportunity hiring. In particular, employers must consider the impact of sweeping changes in three major areas: consumer reporting, disability discrimination and immigration.

Compliance With The Fair Credit Reporting Act

The Fair Credit Reporting Act (FCRA) covers far more than just consumer credit reports. By definition, the FCRA covers any information generated by an outside agency for use in hiring decisions, and mandates that employers disclose such reports before taking any action. Therefore, employers who conduct background investigations using any outside agency to gather information, including credit checks and criminal records checks, must comply with the FCRA.

Compliance with the FCRA should come almost naturally to most employers who follow basic notice, consent and disclosure procedures. Under the FCRA, employers must first provide clear and independent notice to all potential applicants, in writing, of their intent to obtain a consumer report and possibly use that report in the hiring process.

Next, the employee must consent in writing to the gathering and use of the report. Then, to obtain the report from a consumer-reporting agency, the employer must certify that it (1) has provided the applicant with ample notice, (2) will comply with the FCRA if the report results in an adverse hiring decision, (3) will not violate the FCRA or any equal opportunity employment laws, and (4) will provide the applicant with a copy of the report if the employer decides not to hire that individual. Any in-depth investigation conducted by the employer into an applicant’s character (personal interviews with neighbors, for example) is classified as an investigative consumer report and subject to higher scrutiny.

Compliance With The Americans With Disabilities Act

In theory, the Americans with Disabilities Act (ADA) is a simple piece of legislation that prohibits employers from discriminating against disabled persons. In practice, however, the implications of the ADA are much more subtle and require careful attention to detail. The ADA prohibits employers from discriminating on the basis of physical or mental disabilities, inquiring into physical or mental wellness, or maintaining work facilities that restrict the movements of disabled persons. The ADA applies to both private and public organizations with 15 or more employees, and protects applicants who, though disabled, are capable of performing the essential functions of the job based on their skill, experience and training.

The difficulty in complying with the act lies in questioning applicants during the hiring process. Before the Act, employers were permitted to inquire whether applicant’s had been hospitalized, treated for a mental condition, or treated for any physically debilitating disease. The ADA prohibits such inquiries. But employers still need information regarding applicants’ physical and mental abilities in order to make effective hiring decisions. Again, employers must make a fine-line distinction between important information and over-intrusive questions. Generally, employers may inquire into an applicant’s ability to perform job-related tasks and only job-related tasks.

Compliance With The Immigration Reform And Control Act

The onslaught of phony or doctored identification materials in the workplace can make compliance with the Immigration Reform and Control Act a little tricky. The Immigration Reform and Control Act,3 makes it unlawful to hire an individual without complying with certain employment eligibility verification requirements. For example, when an employer hires an individual, the potential employee must sign INS Form I-9, certifying first their eligibility to work, and second that the documents presented to the employer demonstrating the individual’s identity and work authorization are genuine. The employer must sign the same form, indicating which documents were examined, and attest that the documents appear genuine.

The employer must accept any documents presented by the employee that reasonably appear on their face to be genuine and to relate to the person presenting them. The Immigration Act of 1990 established that an employer’s refusal to accept certain documents or demand that an employee submit other forms of identification in order to complete Form I-9 violates anti-discrimination policies of the Act.

However, the employer-sanctions provisions of the Act authorize civil and criminal penalties against employers who employ unauthorized aliens in the United States, and further authorizes civil penalties against employers who fail to comply with the statute’s employment verification and recordkeeping requirements.

So, employers must balance the need to discover forgeries with harsh penalties associated with immigrant employment discrimination. Employers in a sense have their hands tied, in that they are required to apply “good faith efforts” to identify phony I-9 documents, yet are restrained from asking for identity verification or employment authorization other than the documents listed on the I-9. It is a fine line, with the potential for negative repercussions on either side.

Conclusion

Research aside, the only way to develop a successful pre-employment screening program, one that comports to relevant due-diligence requirements, is to dedicate company resources to the task. Often, pre-employment screening receives minimal attention, and that’s exactly how due-diligence requirements get missed.

Often a function of the human resources department, background investigations and pre-employment screening processes should be reviewed and updated regularly by corporate representatives from senior management, legal counsel and department managers. Like any corporate process, pre-employment screening requires constant review, improvement and refinement. 

ABOUT THE AUTHOR

Don Stebbins is Managing Director of Vance International Consulting. Mr. Stebbins directs domestic and international investigations, security surveys and consultations. For more information on this or other security related topics, contact Mr. Stebbens at 703-385-6754 or visit www.vancesecurity.com.

riskVue | The webzine for risk management professionals
February 2001