1. Background Checks Kayla R. Green

2. Disclaimer The information contained in this presentation does not represent legal advice and should not be used for the purpose of forming conclusions or making decisions that impact specific workforce scenarios. You are advised to consult your own legal professional for legislation that is applicable to your company and governed by the state(s) in which your company does business.

3. Little Known Workforce Facts

4. Hires Gone Bad On average, in U.S. businesses, at least half of all new hires “don’t work out”. * Source: Fortune Magazine It costs $7,000 to replace a salaried employee, $10,000 to replace a mid-level employee and $40,000 to replace a senior executive. *Source: Recruiting Times In 1999, employers lost 60% of negligent hiring/supervision jury trials. * Source: The Reish & Luftman Practical Guide to Employment Law

5. Little White Lies 34% of all application forms contain outright lies about experience, education and ability to perform essential functions. *Source: The Wall Street Journal As many as 30% of job seekers exaggerate their accomplishments and about 10% seriously misrepresent their background. *Source: The Complete Reference Checking Book, by Edward Adler 9% of job applicants falsely claimed they had a college degree or jobs that didn’t exist. *Source: Resume Inflation: Two Wrongs May Mean No Rights, by Barbara Kat Repa

6. When Nobody’s Watching 33% of all applicants admit to being tempted to steal from an employer. *Source: Security Magazine 30% of all business failures are caused by employee theft. *Source: US Chamber of Commerce 14.7% of all applicants admit to theft of merchandise from an employer. *Source: Reid Psychological Systems (Don’t Hire a Crook, Dennis DeMay)

7. “Going Postal” On-the-job violence costs employers $36 BILLION each year. *Source: Workplace Violence Research Institute The average award in a workplace violence lawsuit exceeds $1 million per case. *Source: Workplace Violence Research Institute 57% of respondents reported that a violent incident occurred in their workplace between 1/95 and 7/99. *Source: Society of Human Resource Management, Workplace Violence Study

8. What is a background check? When most people think of a background check, also known as a background screening, they think of a simple criminal history check. In reality, a background screening is much more than that. In layman’s terms (for hiring purposes) a background check screens an individual on a number of levels to assess whether the individual can do the job required of them and are unlikely to do harm to anyone or anything. For other purposes, such as insurance, the check assesses whether the individual is a good candidate to be insured. A background screening helps your company stay safe through the criminal history check. It helps assure that applicants can do what they claim they can through employment and education verification. It checks that applicants are who they claim to be and aren’t wanted internationally. Background screenings, background checks, pre- employment screenings: Call them what you will, they help protect your company, your employees, and your clients through a number of processes and services.

9. Why Should I Run Background Screenings? Protection -Employees and clients -Assets -Liability Increase Applicant/New Hire Quality Protect Against Negligent Hiring Liability Reduce Workplace Violence Avoid negative publicity

10. Background Investigation Falsification of Background Information Falsification of Background Information Many applications and resumes contain factual misstatements or significant omissions. Many applications and resumes contain factual misstatements or significant omissions. Sources of Background Information Previous-employment records Criminal records Drug tests Education/degree documentation Professional certifications/licenses Motor vehicle records Credit history Honesty tests Social Security number Sex offenders lists Worker’s compensation records Military records

11. Medical Examinations and Inquires American With Disabilities Act (ADA) American With Disabilities Act (ADA) Prohibits pre-employment medical exams Prohibits pre-employment medical exams Prohibits rejecting persons for disabilities or asking disability-related questions until after a conditional job offer is made. Prohibits rejecting persons for disabilities or asking disability-related questions until after a conditional job offer is made. Drug Testing Drug Testing Tests must be monitored to protect integrity of results. Tests must be monitored to protect integrity of results. Genetic Testing Genetic Testing Tests for genetic links to workplace hazards Tests for genetic links to workplace hazards Tests for genetic problems related to the workplace Tests for genetic problems related to the workplace Tests to exclude workers for increased risks Tests to exclude workers for increased risks

12. Something to Consider Credit Reports Under the Fair Credit Reporting Act (FCRA), businesses must obtain written consent before seeking n employee’s credit report. If you decide not to hire or promote someone based on information in the credit report, you must provide a copy of the report and let the applicant know of his or her right to challenge the report under the FCRA.

13. Criminal Records To what extent a private employer may consider an applicant's criminal history in making hiring decisions varies from state to state. Because of this variation, you should consult with a lawyer or do further legal research on the laws of your state before exploring whether or not an applicant has a criminal past. For Federal Bureau of Investigation (FBI) checks, consult these resources: -FBI Services for Businesses -FBI Criminal History Checks for Employment and Licensing -FBI Checks on Employees of Banks and Related Entities

14. Lie Detector Tests The Employee Polygraph Protection Act prohibits most private employers from using lie detector tests, either for pre-employment screening or during the course of employment. The law includes a list of exceptions that apply to businesses that provide armored car services, alarm or guard services, or those that manufacture, distribute, or dispense pharmaceuticals. Even though there is no federal law specifically prohibiting you from using a written honesty test on job applicants, these tests frequently violate federal and state laws that protect against discrimination and violations of privacy.

15. Medical Records Under the Americans with Disability Act, employers cannot discriminate based on a physical or mental impairment or request an employee’s medical records. Businesses can, however, inquire about an applicant’s ability to perform specific job duties. Some states also have stronger laws protecting the confidentiality of medical records.

16. Bankruptcies Bankruptcies are a matter of public record and may appear on an individual's credit report. The Federal Bankruptcy Act prohibits employers from discriminating against applicants because they have filed for bankruptcy

17. Military Service Military service records may be released only under limited circumstances, and consent is generally required. The military may, however, disclose name, rank, salary, duty assignments, awards and duty status without the service member's consent.

18. School Records Under the Family Educational Rights and Privacy Act and similar state laws, educational records such as transcripts, recommendations and financial information are confidential and will not be released by the school without a student’s consent.

19. Workers' Compensation Records Workers' compensation appeals are a matter of public record. Information from a workers' compensation appeal may be used in a hiring decision if the employer can show the applicant's injury might interfere with his ability perform required duties.

20. . Background Investigation (cont ’ d) Reference Checking Methods Reference Checking Methods Telephoning the reference Telephoning the reference Use of preprinted reference forms Use of preprinted reference forms Giving References on Former Employees Giving References on Former Employees Employers can incur a civil liability for statements made about former employees. Employers can incur a civil liability for statements made about former employees. Employers have adopted policies restricting the release of reference information to name, employment dates, and job title. Employers have adopted policies restricting the release of reference information to name, employment dates, and job title.

21. Background Investigation (cont ’ d) Legal Constraints on Background Investigation Legal Constraints on Background Investigation Risks of negligent hiring and retention Risks of negligent hiring and retention Due diligence: investigating an applicant ’ s background to avoid suits for actions of the employee. Due diligence: investigating an applicant ’ s background to avoid suits for actions of the employee. Obtaining signed releases from applicants is necessary to avoid problems with privacy issues. Obtaining signed releases from applicants is necessary to avoid problems with privacy issues. Negligent hiring Negligent hiring Occurs when an employer fails to check an employee ’ s background and the employee injures someone. Occurs when an employer fails to check an employee ’ s background and the employee injures someone. Negligent retention Negligent retention Occurs when an employer becomes aware that an employee may be unfit for employment, continues to employ the person, and the person injures someone. Occurs when an employer becomes aware that an employee may be unfit for employment, continues to employ the person, and the person injures someone.

22. Background Investigation (cont ’ d) Fair Credit Reporting Act Fair Credit Reporting Act Requires disclosure of a credit check Requires disclosure of a credit check Requires written consent of applicant Requires written consent of applicant Requires copy of report be given to the applicant Requires copy of report be given to the applicant