ESA Best Practices

Pre-Employment Criminal Background Checks

and Drug Testing

www.emplscreen.com

ESA

Did you know?Did you know?

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According to Monster.com the top 5 lies told by job candidates are:1. Exaggerating dates of past employment2. Falsifying the degree or credentials earned3. Inflating salary history or title held4. Concealing a criminal record

5. Hiding a drug habit

The Need for Background ChecksThe Need for Background Checks

Improve Hiring Practices Mitigate Liability Risk Decrease Turnover and Improve Productivity Maximize Employee Recruitment Investment Better Loss Prevention Decrease Workplace Violence

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Do you really know who your hiring?Do you really know who your hiring?

Food For Thought?

About 10% of all job applicants have a criminal record, including felonies

and misdemeanors (averaged out across all industries)

34% of all applications contain intentionally false information or relevant

omissions

Internal theft is 1.5x greater than external theft (costing U.S. companies

$50 billion annually)

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…. and further Approximately 20% of the U.S. workforce regularly uses illicit drugs

(marijuana, cocaine, etc.). Another 5% abuses prescription medications

(but this number has increased steadily in recent years).

A typical full-time new hire costs a minimum of between $10-$30k in

up-front training and lost production time during the first year

About 30% of business failures are due to negligent hiring practices

[U.S. Dept of Labor]

Plaintiffs suing for negligent hiring or dismissals win 60% of cases(Statistics from the

Bureau of Labor Management, 2008)

ESA

Before you start ...Before you start ...

• Understand the purpose & uses of the pre-employment screening• Make sure your HR Department has a clearly defined hiring policy & standard decision-making criteria• Adhere to the ADA and FCRA• Make sure proper and consistent documentation is used before, during, and after each background check for each candidate• Ensure negative findings (e.g. criminal past, DUI, poor credit history, etc.) truly affect the required tasks • For rejected applicants, place onus of discussion on FCRA• Know your budget

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Key Elements of a Background CheckKey Elements of a Background Check

Fair Credit Reporting ActFair Credit Reporting Act

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Companies performing third-party investigations are deemed Consumer Reporting Agencies (CRAs) under the FCRA, and

therefore report facts only. And ...

• Generated reports may only be used for employment purposes.

• The applicant must provide written authorization that a report may be obtained. If employment is denied based on the report, the applicant has certain rights under the FCRA.

• A Credit Reporting Agency may not report negative information more than 7 years old (10 years for bankruptcies) unless the applicant is expected to earn more than $75,000 per year. (Exception: The 7-year limit does not apply to criminal convictions.)

• If adverse action is taken based on info. in the report, the applicant must be informed (verbally or writing), and provided CRA information.


Depending on your needs and whom you are hiring, can

include many varieties of checks. The most common: Employment / Education Verification and History

References (Business / Character)

SSN Trace Confirmations

Criminal History: County + State + National + Federal

Licensure / Certification

Credit History

Drug Testing

MVR, DOT, OFAC, etc.

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SSN Trace Confirmations Essential For Optimal Criminal History

Address Verification

Name Verification/Identity!

Social Security Verification

Criminal History: County + State + National + FederalNot the same as arrest records: Convictions!

Should list Charges & DispositionsLook for patterns

Ability To Perform Work (e.g., DUI for Transport Position)Workplace Violence Potential

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Let’s take a closer look ...Let’s take a closer look ...

Credit HistoryAbility To Handle Personal Funds

Bankruptcy, Judgements, Or GarnishmentsPotential For Theft (e.g., Cash Handling, External Sales)

Cross-Reference To Salary Claims

Drug TestingUse Of Illegal Substances

Essential: Verification Through Medical Review Officer (MRO)

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Licensure / Certification

Motor Vehicle ReportsAbility To Operate Vehicle Legally

PointsDUI, Other Recent Charges

Potential Safety Issues

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• Worker’s Compensation HistoryAbility To Perform Necessary Tasks

Falsified Information From Interview / ApplicationPotential For Litigation

Hiring Decision Must Adhere To ADA Guidelines

““After” the hire services …After” the hire services …

Random Drug Testing / Drug-Free Workplace

Drug / Alcohol Testing For Cause / Suspicion / Post-Accident

Motor Vehicle Report Audits

Random Credit Checks

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Original Source vs. DatabasesOriginal Source vs. Databases

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Original Source: A provider/vender that uses the original source records, each time, every time!

Arrest records conviction records: Therefore, police records are unethical (and against FCRA) to use for pre-employment screening purposes!

County Courthouse misdemeanor and felony records: Only place you can be 100% sure you’re getting accurate conviction records is from County Courthouses (and sometimes Federal District Courts for Federal Crimes). Best “first” check is where the candidate lives now.

State Records: Sometimes inclusive of all counties, but most often are not

So-called “national” or “U.S.” records search: Is a myth. There’s no such thing as a “national” database search that’s at all accurate. Most companies use a “national” sweep only as a supplement to a county or statewide search. Bigger problem: Databases that are from the Dept. of Corrections, which can result in a false hit because it doesn’t distinguish between arrest records (which can be dismissed, thrown out) and actual convictions!!

Due Diligence and LiabilityDue Diligence and LiabilityIt’s been said that inaccurate

information on the Internet spreads

three times faster than the truth.

(Databases are no exception)

Liability of a hiring decision made based on database information. So-called “national databases” have only a 40% accuracy on Felony records, and are even less accurate on misdemeanor records. Reason: A majority of counties still don’t record their records electronically, not even to this day. Those that do aren’t updated often enough to be considered accurate.

The issue is Due Diligence: Database-only or internet-only background searches typically do not pass the “due diligence”

test when a hiring decision is called into court.

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County-Level Criminal ChecksCounty-Level Criminal Checks

An actual in-person visit to the county records office by a professional trained to read court documents and find court documents others wouldn’t

A check for felonies and misdemeanors in the applicant’s current county of residence and often past 3 counties Typically takes 2-3 days turnaround -- often started on same day as reference checks

The only way to ensure accurate information about the candidate is represented

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““Red Flags”Red Flags”

Reports obtained “up the street” from police precinct

Criminal History done in a 24-Hour Turnaround Time

Age of information presented (shelf life)

Drug Testing w/o a Medical Review Officer (MRO)

Using “fingerprinting” for pre-screening candidates.

High % of reports without any records found

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Your Budget: What to look forYour Budget: What to look for

Obviously, it’s often impractical to run every type of check

on every candidate. Therefore ...

1. Know or establish your company’s minimum hiring standards and policies

Felonies

Misdemeanors

What about domestic crimes? One-time crimes vs. repeat offenders?

Drug screenings: Pre-employment only? Random during the year? MVRs? etc...

2. Establish the most appropriate “baseline” check for all candidates

3. Maintain consistency with candidates (not same as job title to job title)

4. Job titles: Add on “a la carte” services, making sure the relevance of added

check(s) are related to the duties of job

… and of course, always adhere to the FCRA!

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Your Budget: What to look forYour Budget: What to look for

How they are typically priced …

SSN Trace Confirmations …………………………………………….……………Per candidate

County and State criminal history ………………... Per county (and/or per State) searched**

“National” or “U.S.” databases……………………………………………………..Per candidate

Federal District Courts ……………………………………………………..Per district searched

Employment / Education Verification and History ……..Per college, or per prior Employer **

MVR/driver’s reports ……………………………………………………………….…Per license**

Licensure / Certification …………………………………………………………….... Per license

Credit History ………………………………………………………………………..Per candidate

Drug Testing ………………………………………………………………...……....Per candidate

** (Note: most companies will let you know of any pass-through fees such as

county courts/state-specific access fees, third-party provider fees, etc. where applicable)

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Trends in Background ScreeningTrends in Background Screening

Return to original-source reporting/decreasing usage of databases

Mixed reviews so far from Applicant Tracking Systems

Increasing usage of ITAR, eVerify, and other “government watch” type checks

Companies realizing limitations and flaws of using fingerprinting records (no matter

the source) -- dissolution of methodology

The impact of Health Care reform -- Increasing usage of drug screening and pre-

employment physicals

Decentralization -- Payroll companies, which once bought up background firms

and/or started doing background checks themselves, are now re-focusing on their

firm’s core competencies (e.g., payroll!) and spinning off background checks firms,

outsourcing to third-party companies, or getting out of the background industry all

together!

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About Employment Screening Associates ...

Headquartered in Cincinnati Ohio

Founded in 1991 - Almost 20 Years Expertise -National Clientele

“One-Stop Shop” For All Intelligence Needs

Comprehensive Reports Written In “Plain English” Format

Customized / Modular Approach To Services

Quality Checks Ensure Accurate Information

Strict Adherence to the Fair Credit Reporting Act

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Employment Screening AssociatesEmployment Screening Associates

Doug Cottengim

Director of Sales & Marketing

513-728-3255

[email protected]

www.emplscreen.com

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