Posted on January 25, 2013

Hiring and Background Checks: What Every Employer Should Know

If your company is like most, people are your biggest investment. They represent a huge potential to be productive and profitable, but they also represent a risk. You would never hire someone who was unfit, dishonest or dangerous on purpose, but it does happen—and that could mean you end up with a bad hire disrupting your work environment, or worse, a lawsuit for negligent hiring. Due diligence in hiring is necessary to avoid the risk and expense of a bad hire.

Here are some the most important things employers should know about hiring and background checks.

Hiring laws and regulations

While it is critical to perform background checks to ensure you’re hiring the right person for the job, it is also important to do it correctly to avoid discrimination. This is where the Fair Credit Reporting Act comes in: this federal regulation governs background checks. Some states have additional rules you must follow, as well.

The Equal Employment Opportunity Commission (EEOC) recently released new guidelines that could change the way you hire. Businesses are no longer allowed to automatically disqualify a candidate because they have a criminal record—they must prove a business justification, consider the crime’s nature, gravity and time passed since it was committed and the nature of the job. For example, you may have a candidate who seems perfect for the job, but whose background check shows he has a criminal record. Before you disqualify him, you must investigate the details. Was it a marijuana possession charge from when he was in college, or did he serve time for defrauding a major corporation? It is important to take into account the nature of the crime and how it could affect the job.

However, if you do decide to not to hire him based on his criminal record, the EEOC suggests that you send him an “individualized assessment,” a document telling him that if he believes his record is incorrect or if he wants to explain his conduct, he has the opportunity to meet with you to discuss it. The EEOC also advises that you wait until later in the hiring process to ask about their criminal record. What they are trying to dissuade employers from doing is declaring “no felons need apply” and flat out denying employment on the basis of criminal record.

Social media and hiring

An applicant’s Facebook page or Twitter feed is a treasure trove of information about them, and it is tempting for you to investigate. However, this is a new area of law with very few set regulations. Courts and lawmakers have yet to determine if there is a reasonable expectation of privacy on social media. Also, viewing an applicant’s social media pages exposes you to the risk of discrimination: you could see information about their race, religion, age, medical issues or marital status, potentially leading to discrimination allegations if you choose not to hire.

Still want to check out that applicant’s Facebook photos? Wait until as late in the process as possible, even after the job offer. This is the stage in the process where you will most likely be protected. If you can prove you have a business necessity, and if whoever does the search is not the final decision maker, you should be protected from this liability.

Education and employment fraud on the web

Up to 40% of resumes contain material lies or omissions about education, past jobs or qualifications. Applicants may give themselves a different title, hide gaps in employment, inflate their old salary or lie about their education. This is why it is critically important to discover where your applicant has truly been. The best way to do this is to call their past employers. This enables you to verify start and end dates, actual titles and initiatives and cover your own bases in terms of due diligence. It also allows you to see employment gaps and locations, so you can search for the correct time period and jurisdiction if a criminal check is required.

How do applicants get away with untruthful resumes? In exchange for a fee, websites like CareerExcuse.com will create a fake company, complete with a website, local phone number, address on Google Maps and operators to provide “references.” If you suspect an applicant of using such a service, you can verify whether or not the company exists by checking with the Secretary of State’s office.

Another way applicants may lie on their resumes is with a false educational background. Beware of “diploma mills” that offer degrees for little to no serious work. If confronted with an unfamiliar school on an applicant’s resume, it’s best to do your own research into whether or not the school is accredited. The US Department of Education and the Council for Higher Education Accreditation are good places to start.

This broad overview skims the surface of hiring and employment screening: it’s a complicated process with no room for error. Paycor's HR applications and employment screening services can help you navigate this chaotic environment. Get in touch with us today to get started.

Want to learn more about how to avoid costly employment screening mistakes? Click to listen to the full webinar.

Source: Lester Rosen, Employment Screening Resources

This article is intended as a general overview, and should not be considered legal advice.