Transcript Drugs, Sex and Murder--Keeping Criminals out of Your Workplace

Why Should Your Company conduct
Background Checks on the employees
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Employment screening is aimed at helping employers decide who NOT to
hire. Background checks are essential to the process of identifying, recruiting,
attracting and retaining top employees.
A criminal record investigation may prevent the statistical certainty that a
person with serious criminal record will be hired-10% rate of criminal records
among those screened.
– A department of justice study found that about two million violent
incidents occur at work a year including 1,000 homicides, 600,000
assaults, 42,000 rapes/sexual assaults and 23,000 robberies
– One in every 37 US adults have been incarcerated at one time, and the
recidivism rate is 67% within three years of release from prison
Hiring criminals can create risk of workplace violence and past criminal
conduct is frequently a common denominator in episodes of violence or
criminal conduct
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Hiring criminals can create risk of workplace violence and past criminal conduct is frequently a
common denominator in episodes of violence or criminal conduct
Theft, Fraud and Embezzlement - Embezzlement can occur where there is
opportunity+motivation+rationalization
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Embezzlement is a crime of violating trust--criminals cannot get access to assets unless they gain your trust. An
embezzler often has the same traits as best worker.
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Employee dishonesty costs over $50 BILLION annually (US Dept. of Commerce)
One-third of business failures are direct result of employee theft (US Chamber of Commerce)
Over 42% of inventory shrinkage is due to employee theft
Studies show that even though people believe they can detect liars, at best there is only 50-50 chance.
Per recent study, even trained law enforcement officers are only right about half the time
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Fraudulent credentials: Up to 40% of resumes contain material lies or omissions about education,
past jobs or qualifications.
Problem employees cause litigation problems. Every Employer has legal duty to exercise
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due diligence in hiring.
• An employer can be sued for negligence if they hire someone who they knew, or in the
exercise of reasonable care should have known, was dangerous or unfit for the
particular job.
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Unless employer has a compelling reason why injury was not their fault, employers usually lose
when sued. Employers cannot claim that it is too costly or difficult to protect the public.
Employers have ability, duty and resources to prevent harm through due diligence, such as
conducting background checks.
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The Criminal Background is a Catch 22--No
National Criminal/Credentials Database
• Problem: contrary to popular belief, there is no
national database available to private employers to
check criminal records or false credentials
Problem: Even though safe hiring is a necessity, no
easy tool.
• Fingerprint checks from FBI only available when
mandated by law (e.g. teachers/child care workers)
• The National Crime Information Center (NCIC) is
restricted to law enforcement
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•Fingerprint checks only available when authorized by federal
or state law (e.g. teachers, or child care workers)
•Primary method for obtaining criminal records is to physically
look at each relevant courthouse!
•Over 10,000 courthouses in America with court records in
over 3200 jurisdictions
•Although criminal searches are crucial for due diligence, they
are subject to human error as well
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The Solution
• The solution is a Employment Background Screening
• Employers should institute a series of policies, practices
and procedures designed to minimize the probability of
hiring a dangerous, questionable or unqualified candidates
• Critical elements are the Application, Interview and
Reference Checking process
• Pre-employment screening discourages applicants with
something to hide, encourages honesty, demonstrates due
diligence and helps to hire based upon facts and not just
instinct
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Advantages
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The purpose of employment background screening is to mitigate the risk
involved in the largest single line item of most firms-Employees
Background Screening helps an employer to:
1. Discourage applicants with something to hide
2. Encourage honest interviews
3. Demonstrates due diligence
4. Eliminate uncertainties
Per Small Business Administration, every dollar invested in screening can
save $5 to $16 in reduced absenteeism, improved productivity and
lower turnover
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What It Is Not
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Not a probe into a person’s private life
Not big brother or a sign of mistrust
Not an in-depth FBI type report
Looking for red flags or indicators
Not a guarantee that every applicant with a significant problem will be identified, but a
powerful tool used with resume review
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What is a Criminal Record
Search
• The primary method for obtaining criminal
records is to physically go to each relevant
courthouse and look!!
• There are Over 10,000 courthouses in America
with court records in over 3200 jurisdictions in
two court systems--State and Federal
• Some jurisdictions contain multiple municipal or
justice courts
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1. Application Process-Require
Consent for Screening
• Discourages applicant with something to hide
• Encourages an honest applicant to disclose a
previous problem--a mistake honestly admitted
may have less impact
• If employers uses a third party agency, need a
separate standalone disclosure document per
federal Fair Credit Reporting Act (FCRA) and
California law
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The Legal Aspects
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The Fair Credit Reporting Act (FCRA)
Effect of state FCRA laws
EEOC and Discrimination law
Invasion of Privacy
Defamation
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Purpose of FCRA
• First passed in 1970 primarily to address issues involving credit
• Purpose to promote confidentiality (privacy), accuracy and
relevancy of information
• Substantially amended in 1996 (effective 9/30/1997)
• Regulates the activities of: 1 Consumer Reporting Agencies
(CRA's); 2. users of consumer information (i.e. employers); 3.
furnishers of consumer information, and 4. gives rights to
consumers affected by reports on them
• Fundamentality FCRA controls information about consumers
by regulating information that certain third parties assemble
and evaluate and then disseminate
• Not limited to just Credit Reports-includes all sorts of information
bearing on a consumer including public records
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Sources of Information
• Text FTC: http://www.ftc.gov/os/statutes/fcra.htm
• FTC Web site (with prescribed notice to consumers,
users and furnishers);
http://www.ftc.gov/os/statutes/fcrajump.htm
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– The FCRA in Four Easy Steps
1. Employer must certify will follow the law (not discriminate, use for
employment only)
2. Obtain written release and standalone disclosure
3. Adverse Action letters: Pre-adverse action-copy of report and statement of
rights so applicant can object if information inaccurate or incomplete. Entitled
to post –adverse action letter if decision is final
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Employer Certifications
• Prior to providing a consumer report or investigative consumer report
for employment purposes, employer must first certify to the CRA in
writing that it will follow the FCRA rules concerning
disclosure/authorization/notice and adverse action notices, and not use
information in violation of any state/federal discrimination law
• Carolina Investigative Research will provide this form
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Investigative Consumer report
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Per Section 606(b), upon written request of consumer, employer must make a
complete and accurate disclosure of the nature and scope of the investigation no
later then five days from request
• State Laws: California Trends
• At least 20 states have consumer laws that are broader than the Federal
FCRA
• CA first state to apply FCRA type rules on employers who obtain public
record themselves (AB 655 in 2002)
• Required employers to turn over all information to consumer in order to
close loophole where FCRA does not apply to private employers
• Amended September 2002 with AB 1068 and AB 2868
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EEOC and State rules
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EEOC prohibits inquires that discriminate on the basis of a protected classified and not
a validly related to job performance or a bona fide occupational qualifications (BFOQ)
Cannot discriminate on basis of age, sex, religion, national origins, race, etc
Many states have their own laws
Americans with Disability Act (ADA) –ability to perform essential job function with or
without reasonable accommodation (the current use of legal drugs is NOT a medical
condition)
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Verifying Past Employment
(11:15-12:15)
– Critical to verify employment to determine where a
person has been (even if you only get dates and job
title)
– Looking for unexplained gaps AND for locations to
search for criminal records
– If can verify person gainfully employed last five-ten
years, less likely spent time in custody for serious
offense
– Just attempting and documenting effort demonstrates
due diligence
– Can also verify education/credentials
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Past Employment Issues
• All employers want references, but few will
give them due to fear of being sued for
DEFAMATION
• Good applicants are often unable to get the
recommendations they deserve
• Problem applicants move on to
unsuspecting employers with their past
behind them
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Difference Between Verification
and Reference
• Verification refers to Factual matters,
such as start and stop dates, job title and
possibly salary
• Reference checking refers to job
performance--Qualitative matters
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Why Need Verification
• Demonstrate accuracy of resume
• Even if former employer will only verify
basic data, attempting to obtain a reference
Demonstrates Due Diligence
• Looking for Employment Gaps
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Why Need References
• Information v. Instinct
• Past can be Prologue--unlikely that an
employee will perform better for you than a
previous employer
• Protects important financial investment
• Promotes better fit
• Legal protection against negligent hiring
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Practical Difficulties
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No one will return calls
Will only verify by mail or with release
Uses 900 phone number only
Employer out of business/cannot be located
Company merged
Applicant was a temp/contract employee so
not on payroll
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Other Practical Problems
• Military employment
• Foreign employment
– Challenges in international calling
– Time zones, languages, finding phone numbers,
verifying real business
– Some employers will substitute local reference
(someone in community?)
– H-1B visa requirements
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Who Should do Reference
Checks
• For critical position, often done in-house by hiring
manager or HR
• Problem with in-house calls: not all past
employers called in a consistent fashion by hiring
managers
• For large hiring program, can outsource to a third
party, such as an HR consultant or professional
background firm
• Outsourcing usually done to decide who NOT to
hire, and not for purposes of the initial assessment
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What Is Pre-screening and other
tools available (1:15-2:00)
• Check of public
records - e.g.,
Criminal or civil court
records, driving
records
• Check of private
records - e.g., Credit
reports
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• Verification of factual
matters - e.g.,
Education, job history,
professional licenses
• Reference checking e.g., Job performance
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Additional Tools
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Education
Driving records
Social Security trace
Credit Reports
Workers Compensation
Drug Testing
International Screening
Terrorist Searches
Honesty testing (validity/non-discriminatory)
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Ten Things About Obtaining
Criminal Records (2:00-2:30)
1. Humans Perform the Searches
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Researcher goes to actual courthouse
Public access computer (look-up by names)
Searches performed by court clerk
Paper indexes, binders or books (in some
cases, need to search year by year)
• Some counties charge an access fee
• Can be name and spelling variations
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2. Must Confirm Identity
• Initial search is usually by name match only
• If there is a “hit” need to review actual file
to obtain details and to confirm identity
• Identifiers include date of birth, drivers
license, or SSN
• Delay possible if the court clerk needs to
obtain the file, or file in storage
• Some counties require a court fee
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3. Must Confirm Case Details
• Must examine file to determine details of
case
• Need to determine if felony or
misdemeanor, sentencing, future court
dates, probation terms and nature of offense
• Actual police reports often not available
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4. Federal and State Systems are
Separate
• State County courts often two tiered-Felony courts (e.g
Superior or Upper Courts) and Misdemeanor courts.
Some counties have separate traffic courts
• In addition, if there are multiple misdemeanor courts, firms
normally only search the central lower court--misdemeanor
cases in outlying courts can be missed
• The majority of all criminal prosecutions is in state courts
• There are three categories of criminal offenses-felonies,
misdemeanors, and infractions
• Some offense can be either a felony or misdemeanor,
depending on seriousness of offenses and /or if a person
has prior convictions--called a “wobbler”
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5. Different Levels of Crimes
• Three categories of criminal offenses:
felonies, misdemeanors, and infractions
• Felonies carry state prison sentence/
misdemeanors local time (county jail)
• Felony can also be punished with probation
and “local” county jail time
• Some offenses can be either a felony or
misdemeanor--called a “wobbler”
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Federal Crimes
• There are 94 federal judicial districts
• A criminal matter becomes a federal case if
there is an allegation of a violation of
federal law
• Many federal crimes could also be
prosecuted in state court under state laws
• Federal prosecutors have a great deal of
discretion in the cases they accept
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Federal System 2
• Federal cases are typically serious crimes (e.g.
large drug cases, financial fraud, bank robbery,
interstate crimes)
• Federal offense are sentenced under the Federal
Sentencing guidelines
• Sentences can be very long (especially for violent
crimes, gun use or drug offenses) with many
federal crimes carrying 10 year minimum
mandatory prison sentences
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Federal System 3
• Many employers do not find it as valuable to do
federal criminal searches since federal crimes are a
very small percentage of all criminal cases
• Since many federal sentences are long, very hard
for a person to hide federal crime if employer
checks past employment--applicant would
normally have an unexplained employment gap
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6. Alternative punishments
• Jail alternative programs e.g. home detention or
“Commit a crime, go to your room,” or work
furlough, work alternative program or weekend
sentence
• Diversion programs, delayed entry of judgment or
similar programs can restrict ability to report
offense
• Person can seek can petition for certificate of
rehabilitation, governor's pardon, etc.
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7. Big Mistake Not to Look For
Misdemeanors
• Big mistake to only look at felonies
• Misdemeanors can be very serious--e.g. assaults,
sexual offenses, weapons charges
• Not unusual for felony charges to be reduced to a
misdemeanor (plea bargain)
• ALERT: Most misdemeanors searches limited to
central court only. Some jurisdictions have
numerous local courts, and they are very difficult
to search
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8. Careful Using Databases
– Excellent secondary source --covers wider area
then a county search
– Some databases are repositories only or
maintained by correctional authorities
– Only a few “true” statewide databases using
information directly from the courts
– Issues as to timeliness, accuracy, completeness,
identity and final disposition of matter
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9. Must Determine Where To
Search
• Since no nationwide database for private
employers, must select counties to search
• Cannot search everywhere--never a guarantee that
search is complete
• Best protection: seven year county search of
where applicant has lived, worked or studied
based on a social trace (the credit header
maintained by the credit bureaus), application and
list of past addresses
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10. In-depth Criminal Searches
Available
• In addition, can also search :
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Larger metro areas surrounding counties
Federal searches
Statewide database if available
Contact local prison system/Federal BOP
Sexual offender databases
DMV for driving related offenses
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International Criminal Checks
• Most countries do not have extensive public
records systems available
• Checks can be expensive and time consuming/ not
always clear what courts are being checked or how
records maintained
• Can still verify schools, former employers, and
criminal check for period living in US
• Can also hire investigator in a country for in-depth
search
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Ten Things to Know About using
Criminal Records (2:30-3:00)
• 1. Not All Criminal Convictions Will
Disqualify Applicant
Legal standard is fitness for a particular job
• Person with theft conviction may not be good
candidate to work cash register, but may be great
worker in another capacity
• Society has an interest in helping everyone get
employed, especially those with criminal
convictions--they need a job to become law
abiding and taxpaying citizens
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2. No Automatic Disqualification
Rule
• Must apply EEOC test to criminal matter
• Can have discriminatory impact by
disqualifying a disproportionate number of
members of certain groups
• Must determine if there is a rational job
related reason that person is unfit for the job
• FACTORS: Nature and gravity of offense,
when it occurred and nature of position
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3. Special Consideration if Using
Arrest Records
– If based upon arrest only (i.e. not adjudicated
and not pending), then employer must make
some reasonable inquiry into underlying facts
– The issue is CONDUCT, not the mere fact of
the ARREST
– Employer should not just dismiss applicant's
explanation, but should take reasonable steps to
determine if the explanation is credible
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4. Approach if Applicant Lied
• If background check locates criminal
matter(s) that applicant misrepresented,
then the dishonesty can be the basis to deny
employment
• That is reason why employment application
should ask about criminal records in broad,
clear language, and inform applicant that
dishonesty is grounds to deny employment.
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7. Understanding the Conviction
• Are there proper identifiers?
• What was the crime? (What behavior was
involved)
• How does it impact a job decision?
• Felony or misdemeanor?
• How long ago?
• Information current?
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Some Common Terms
• Nolo contrendere-no contest (same as guilty for
criminal but has no impact on civil case)
• Nolle prosse-dismissed, not prosecuted
• FTA-Failure to Appear
• Diversion or delayed entry of judgment-special
programs in some states for first offenders
• VOP-Violation of Probation
• CA 1203.4-Certificate of Rehabilitation
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8. Can Employer Be Sued for
Checking Criminal Records?
– Chance of being sued successfully by a criminal for not
hiring are probably remote
– Near statistical certainty that without screening,
employer will hire a criminal since 10-12% of screened
applicants have criminal records
– Employer must balance certainty that without
screening they will hire a criminal against remote
possibility of lawsuit
– The FCRA guards against mistake--applicant can
review report prior to adverse action
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Implementing a Background
Screening Program (3:15-4:00)
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Developing Policies
SAFE Hiring System
Background Screening Workflow
Type and Level of Screening
FAQ’s about a screening program
Outsourcing
Summary of Ten Safe Hiring Tools
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Policies
• Best practice to have policies in employee manual
• Should have an internal policy addressing key
issues:
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Who is in charge
Mechanics of sending orders/receiving reports
Level of screening and Consistency
Privacy and Confidentiality
Dealing with adverse information (e.g criminal
records/credit information, etc)
– Applicant rights (e.g., non-discrimination, FCRA, CA
laws)
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Background Screening
Workflow
• Reports typically take 48-72 hours
• Criminal records and verification of employment,
education and credentials are done manually at court
or contacting appropriate source.
• With typical internet system, can track status of all
orders 24/7
• Source of out of control delays include court clerk
delay in pulling criminal files, schools that are closed,
or employers who cannot be located or do not return
calls
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Type and Level of Searches
• Depth of search depends upon position
and risk involved
• Basic rule-treated similarly situated
applicants the same
• At a minimum, follow AIR Process and
do a criminal search
• More in-depth searches for higher
positions
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FAQ’s about screening
• Do we risk getting sued for violation of
rights or invasion of privacy
• Does it delay hiring
• Cost-effective?
• Effect on applicants?
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#1 Legal and privacy concerns?
• In a Pre-Screening program, all of an applicant’s
legal and privacy rights are respected
• Conducted under the Fair Credit Reporting Act
(FCRA)
• By following the FCRA, applicants have a wide
range of protections
• Following FCRA also protects employers
• California has special rules (important to ensure
following state rules)
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Maintaining/Viewing Reports
• Should only be viewed by person with
hiring authority (HR, Hiring manager)
• Maintained separately from general
personnel file and not passed around office
• Maintain records for a minimum of three
years from separation (but may want to
consider longer)
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#2 Does it delay hiring?
• Report are normally completed in 2-4
business days
• Employers doing pre-screening find that
screening does not delay hiring
• Pre-screening program can be integrated
seamlessly into hiring practices
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#3 Is it cost-effective?
• The cost of a background screening is less
than the cost to a firm of a new employee
on just the first day on the job
• Avoiding even one bad hire will justify the
cost of a background screening thousands of
times over
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#4 Effect on applicants?
• Good applicants appreciate that employer
concerned about safe and profitable
workplace for a everyone
• Applicants understand that this has become
a business necessity and also protects
everyone in the workplace
• Pre-employment screening is becoming a
necessity in the workplace
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Criteria for Choosing a Background
Screening Company
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Use same criteria as for any other trusted
provider of a professional service (e.g.
lawyer, benefits consultant, etc)
a. Expertise/knowledge of the service provider.
b. Legal compliance expertise
c. Personal service and consulting, not just a raw
data provider
d. Pricing.
e. Turnaround time.
f. Internet order/reporting options
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Summary of Ten Critical Tools
• 1. Have consent for
background check
• 2. Use an application form
• 3. Ask about criminal
convictions in application
• 4. Include other critical
language in application
• 5. Review application
carefully for “red flags”
• 6. Ask critical interview
questions
Lester S. Rosenwww.ESRcheck.com
• 7. Check past
employers/schools
• 8. Have a procedure if
employment starts before
screening completed
• 9. Check for criminal
records at local courthouse
at a minimum
• 10. Understand rules
about the proper use of
criminal records
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10. Does the application form
have all necessary language?
• CRITICAL: Specifically ask if person has been
convicted, or has pending charges
• Broadest legal language for both felonies and
misdemeanors
• Some limitation on misdemeanors
• Fraudulent statement or material omissions
grounds to terminate the process, or employment,
no matter when discovered
• Language re: at will, non-discriminatory, etc
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11. If using screening service,
using separate form and
procedures per FCRA
• Obtain written release/disclosure on a stand-alone
document
• Pre-adverse action-copy of report and statement of
rights so applicant can object if information
inaccurate or incomplete
• Second letter sent to applicant if decision is made
final
• Employer must also certify will follow the law
(not discriminate, use for employment only)
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17. Does firm check references?
– Critical to verify employment to determine where a
person has been (even if you only get dates/job title)
– Reasons:
• Biggest mistake employer can make is not contact past
employers--just as critical as criminal checks
• Looking for unexplained gaps
• Also looking for locations to search for criminal records (can’t
search al 10,000 courthouses)
• If able to verify person gainfully employed last five-ten years,
less likely spent time in custody for serious offense
• Just attempting and documenting effort demonstrates due
diligence
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18. Does firm take any other
steps?
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Criminal record checks
Civil records if relevant
Social trace
Education/credentials
Credit report (if appropriate and policies in
place to ensure the use of credit information
is recent, relevant and fair)
• Driving record
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22.
Legal use of criminal
information
• Understand EEOC rules for use of Criminal
records—based upon business necessity:
– The nature and gravity of the offense;
– The amount of time that has passed since the conviction
or completion of sentence.
– The nature of the job being held or sought.
• Special rules considering arrests only
• Did the applicant lie in the application
• Criminal information been verified (information current, belongs to
applicant and employer has understanding of the nature of the record)
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