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Handle employee background checks correctly to lessen liability

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in Employment Background Check,FMLA Guidelines,Hiring,HR Management,Human Resources

by Hope A. Comisky, Pepper Hamilton LLP, Philadelphia

More and more employers are conducting criminal background checks on prospective and current employees, and that means employers are asking tough questions about prior arrests and convictions in the application process.
    To avoid potential liability, your company needs to develop practices and procedures for managing the process. You need to understand applicable state and federal laws concerning background checks.
    If you conduct background checks, you're not alone. According to a survey by HRfocus, 85.9% of employers perform criminal background checks.

Background check advantages

Those checks often reveal potential problems. For example, Kroll, a risk consulting firm, found that 9.1% of the people they investigated in 2006 had criminal records. In addition, 33% of employers perform credit checks, according to a Harris Interactive poll.
    Background checks can help companies reduce costs arising from employee thefts, embezzlement, violence, absenteeism and turnover. They minimize exposure to negligent hiring claims and encourage honesty among employees and applicants. Background checks also can help employers determine whether applicants are qualified for employment, and identify job seekers who provide incorrect personal and work histories. They can establish whether current employees are qualified for promotions or transfers, or are appropriate for positions involving confidential information.
    Many employers choose third-party vendors to conduct background checks because of their cost-effective expertise in pre-employment screening. Vendors also have the ability to conduct nationwide searches to obtain the most accurate and complete records. Vendors know how to detect attempts to use false identities and to sort out cases of mistaken identity.
    Background checks aren’t just for your own employees. Don’t neglect to conduct background checks on temporary workers and ask staffing agencies to run checks on outsourced workers. Failing to screen them can expose your company to liability.

Checking the right way

When conducting background checks, consider the following legal guidelines:
Actions must be job-related. Employers that use background checks during the hiring process must, when faced with a challenge, be able to establish that the practice is job-related and consistent with the needs of the business.
Special situations apply to criminal arrest records. According to guidelines established by the EEOC, employers who make decisions based on an employee’s or applicant’s criminal arrest record must examine the circumstances surrounding the arrest, provide an opportunity for the individual to explain it, and then conduct an additional investigation to assess the person’s credibility. To reject a candidate based on a criminal background check, the conduct leading to the arrest must be job-related and relatively recent.
Proper disclosure required for credit checks. Employers performing credit checks must obtain employees’ or applicants’ written authorizations before seeking reports, as well as provide clear and conspicuous disclosures stating that the employers may obtain reports for employment purposes. If an employer takes an adverse action based on the report—such as terminating an employee or not hiring an applicant—the employer must give the individual a copy of the report and a written description of consumer rights under the Fair Credit Reporting Act.

Special PA considerations

Pennsylvania restricts the extent to which employers generally may rely on a job applicant’s criminal history in making hiring decisions. Under the Criminal History Record Information Act, employers may consider felony and misdemeanor convictions—but not arrests—during the hiring process. However, employers may consider such convictions only “to the extent to which they are related to the applicant’s suitability for employment in the position for which he has applied.” Employers must provide written notice to applicants if they make decisions not to hire based on criminal history record information.

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Hope A. Comisky is a partner in the Philadelphia office of Pepper Hamilton LLP (www.pepperlaw.com), a Philadelphia-based multipractice law firm with 450 lawyers in seven states and the District of Columbia. She concentrates her practice in employment-law counseling and training. Hope can be reached at (215) 981-4847 or comiskyh@pepperlaw.com.
    Christopher P. Zubowicz, an associate with Pepper Hamilton, assisted in the preparation of this article.

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