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Deciphering Background Checks: Key Considerations for Employers

Every employer recognizes the critical importance of a comprehensive and legally compliant hiring process. While there exists no federal obligation for background checks in private sector employment, they are widely acknowledged as a prudent step for certain roles and an absolute necessity for others.

Recent research unveiled significant deficiencies in both regulated and unregulated background checks, shedding light on their imperfections. Published in the February 2024 edition of Criminology, the study scrutinized background checks on 101 individuals with criminal records in New Jersey. The findings revealed a staggering 90% rate of false negatives and 60% rate of false positives in regulated background checks, indicating a substantial failure to accurately report incidents contained in official government records.

Deciphering Background Checks: Paint A Fuller Picture

Do disappointing statistics like these mean your organization should give up on background checks? Probably not. Comprehensive and legally compliant background checks, properly conducted by either your organization or a trusted third party, can still reveal noteworthy information about job applicants such as:

  • Resumé inaccuracies
  • Personal financial difficulties
  • Motor vehicle violations
  • Litigious behavior
  • Criminal charges or convictions

Now, in and of themselves, any of these items may or may not represent “deal breakers” to hiring someone. Much depends on the specific facts and circumstances, as well as the type of position you’re looking to fill. But background checks can still paint a fuller picture of job candidates that may enable you to lower the risk level of new hires. It’s just important to bear in mind that background checks are but one piece of the puzzle.

Look Deeply

How deeply your background checks should go is a subject worth considering — or reconsidering if you haven’t done so in a while. For instance, verifying previous employment history is typically considered optional but advisable. Contact all references to ensure applicants held the positions they claim. As you may already be aware, many employers today will confirm only basic details about former employees because of liability concerns. Also confirm that applicants have the academic credentials, military service records and professional licenses stated on their resumés.

In some instances, employers are now checking job candidates’ credit reports to learn whether applicants are consistently late paying bills, swimming in debt or have filed for bankruptcy. This is obviously critical information if you’re hiring someone who will have access to cash or financial accounts. Just keep in mind that money troubles might stem from personal hardships such as prolonged unemployment or illness.

Keep It Legal 

While conducting background checks, or just considering whether and how to conduct them, be sure to make legal compliance your highest priority. Particularly germane is the Fair Credit Reporting Act. Among other requirements, it mandates employers to obtain signed employee agreements before the hiring organization requests any type of “consumer report” — which includes credit reports, criminal background checks and many other types of documents.

And a final point of distinction: Conducting background checks isn’t the same as verifying applicants’ work eligibility status in compliance with U.S. Citizenship and Immigration Services rules. Employers must complete Form I-9, “Employment Eligibility Verification,” for every person they hire.

Protect Yourself

The job market remains relatively tight for employers in most industries. So, if you need to hire, don’t be surprised if it’s slow going or there’s tough competition. Just make sure to take the necessary steps to protect your organization from those who would do it harm and to maximize the likelihood of hiring productive, long-term employees. That should include working with an attorney when necessary. For help identifying and managing the costs and financial risks of your hiring process, contact us.

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