Questions? Here are the answers to the most frequently asked.
What is Negligent Hiring?
Negligent hiring is defined as an employer’s failure to exercise reasonable caution when hiring an employee. Today, courts are increasingly holding employers financially and legally responsible for illegal or violent actions by employees who were not subjected to reasonable pre-employment screening. Basically, the courts are declaring that the employer is legally responsible for what they know and what they should have known about their employees. If an employee causes harm to another employee or customer, and the employer knows or should have known that the individual was a risk, the courts have found the companies liable for thousands or even millions of dollars. Employers in negligent hiring cases lose more than 70% of lawsuits.
What are my obligations as an employer under the federal Fair Credit Reporting Act (FCRA)?
(1) Obtain a signed release from the applicant prior to conducting any type of background investigation
(2) Keep an applicant summary of rights on file along with individual applicant reports for a minimum of five years
(3) If considering adverse action, provide the applicant with a copy of the report and applicable summary of rights prior to taking any adverse action
How can employers avoid negligent hiring liability?
Employers can protect themselves from negligent hiring liability by thoroughly checking references and verifying all pertinent information about each job applicant before making a job offer. A criminal records search should be conducted for each place of residence a candidate has lived for at least the last seven years. Employers should check a minimum of three business or professional references with whom the applicant has worked on a daily basis within the last seven years. In addition, employers should also confirm all degrees and licenses claimed by the applicant. By taking these simple steps, every employer should be able to clearly demonstrate that reasonable care was used in the hiring process.
Why should I screen my employees with an employee background check?
There are many reasons to screen; here are just a few statistics to ponder:
- 67% of criminals released from prison in 1994 were re-arrested for at least one serious crime within the next three years (Bureau of Justice Statistics)
- The National Crime Victimization Survey, released by the U.S. Department of Justice in December of 2001, analyzed workplace violence from 1993 to 1999. On average, 1.7 million violent incidents per year were committed against employees at work.
- Nearly 60% of sex offenders are under conditional supervision (probation or parole) in the United States (Bureau of Justice Statistics).
- 30% of business failures are due to poor hiring practices (Department of Commerce).
- According to a recent study, 67% of job applications and resumes in the U.S. contain misrepresentations (American Psychological Association).
- The average organization loses more than $9 per day, per employee, and 6% of its annual revenue to fraud and abuse (Association of Certified Fraud Examiners).
- On-the-job violence costs employers $36 billion each year (Workplace Violence Research Institute).
- The average award in a workplace violence lawsuit exceeds $1 million per case. (Workplace Violence Research Institute).
- Drug users cost 300% more than non-drug users in medical costs and benefits (Crain’s Cleveland Business).
- According to a national survey, American retail employees stole $10.4 billion in a one-year period (University of Florida).
- 70% of illegal drug users have full-time jobs (New York Times).
- 38-58% of on-the-job injuries can be attributed to alcohol and/or drug abuse (Business Insurance).
What is the Fair Credit Reporting Act (FCRA)?
The Fair Credit Reporting Act, which is enforced by the Federal Trade Commission (FTC), provides the guidelines employers need to follow when performing employment screening. The FCRA requirements apply whenever an employer requests a “consumer report” or “investigative consumer report” from an agency such as Assurance Screening. A “consumer report” includes any written, oral or other communication of any information by a consumer-reporting agency regarding an individual’s credit worthiness, credit standing, credit capacity, character, general reputation, personal characteristics or mode of living which is used as a factor to establish eligibility for employment. The FCRA requires that employers must comply with certain reporting requirements when using an agency to screen employees or applicants. To obtain a report, the employer must first provide certification to the consumer-reporting agency that they:
- Are requesting the report for employment purposes (which includes evaluating an applicant or employee for employment, promotion, reassignment or retention).
- Have provided the required disclosure to the applicant or employee.
- Have obtained the necessary written authorization to request the report.
- Will provide the applicant or employee with a copy of the report and a written description of the applicant or employee’s rights before taking any adverse action based in whole or in part on the report.
- Will not use the information from the report in a manner that violates federal or state equal opportunity laws.
- The FCRA requires any employer intending to obtain a consumer report to first make a clear and conspicuous written disclosure to the applicant or employee that a consumer report may be obtained for employment purposes. The disclosure cannot be included in an employment application or other document that contains additional information.
Does Assurance Screening provide a recommendation of whether or not to accept an applicant?
No, Assurance Screening simply provides you with comprehensive information and insight into each perspective applicant. Assurance Screening is an effective tool for your hiring process.
What applicant information should I provide when submitting a search request?
(1) Full Name
(2) Social Security Number
(3) Date of Birth
(5) Driver’s License Number*
(6) Employment/Education Information
*Required for credit report, motor vehicle record and verification items, respectively.
Must I supply applicants’ dates of birth?
Date of birth is critical to the criminal record search process. The majority of courts use date of birth as a primary identifier, but please note that a handful actually require this piece of information to process requests.
Equal Employment Opportunity Commission (EEOC) Guidelines and questions to consider:
Do you have knowledge that the applicant actually perpetrated the offense?
Per the EEOC, employers are required to (1) provide the applicant with the option to explain the events surrounding his/her arrest(s) and (2) take reasonable measures to confirm the validity of his/her explanation prior to denying employment.
What is the nature and severity of the offense?
The law requires that employers consider the type and degree of the offense(s) in question. Rather than grouping all crimes into one category and creating an across-the-board policy, the EEOC prefers that employers recognize the difference between, for example, a jaywalking violation and grand theft charge.
How long ago did the offense occur?
Though no specific guidelines exist, the EEOC suggests that employers consider the time that has passed since the offense occurred. To illustrate, a more serious offense such as murder would typically remain pertinent for a longer period of time than would a disorderly conduct charge. However, keep in mind that the Fair Credit Reporting Act also contains limits on the age of information used.
What is the nature of the position being applied for?
Employers must weigh the relevance of the criminal information with the type of position being applied for. A felony assault charge against an artist who would potentially work alone from his/her home may not be as pertinent as it might be for an individual applying for a live-in nursing position.
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