background screening presentation 2011

What organizations need to know to protect their What organizations need to know to protect their employees, customers and assets.employees, customers and assets.

EmploymentEmployment ScreeningScreening::

Prepared by Corporate Security Services Inc.

PrePre--Employment ScreeningEmployment ScreeningDonDon’’t bring dangerous people into the workforcet bring dangerous people into the workforce

Dig as deep as law and policy allowDig as deep as law and policy allow

Typically organizations expend more effort to select office Typically organizations expend more effort to select office equipment and supplies than screening of prospective equipment and supplies than screening of prospective employeesemployees

Robust employment screening prevents other risksRobust employment screening prevents other risks

Employment Roulette: No Robust Employment Roulette: No Robust Employment ScreeningEmployment Screening

Corporate Security Services Inc. www.corpsecure.com 2010 ©

Employment RouletteEmployment RouletteMost employers expend more resources on selecting Most employers expend more resources on selecting office equipment than on really knowing about the office equipment than on really knowing about the employees they hire.employees they hire.

Resume and application fraud is pervasive. 19% of Resume and application fraud is pervasive. 19% of applicants lie about criminal history; 30% of applicants applicants lie about criminal history; 30% of applicants misrepresent education history; 25% of applicants misrepresent education history; 25% of applicants misrepresent employment history. misrepresent employment history.

66--10% of applicants supply false social security number 10% of applicants supply false social security number information or are not eligible for hire in the United information or are not eligible for hire in the United States.States.


Impact of Employment RouletteImpact of Employment Roulette

Employer Liability to a Third PartyEmployer Liability to a Third PartyLost Revenue Poor Work Lost Revenue Poor Work PerformancePerformanceLost Revenue from Tardiness and Lost Revenue from Tardiness and No/ShowNo/ShowTraining Costs for Failed New HireTraining Costs for Failed New HireNew Employee TrainingNew Employee TrainingDowntime Between ChangeoversDowntime Between ChangeoversDamage to Equipment or FacilitiesDamage to Equipment or FacilitiesLegal Implications Justification for Legal Implications Justification for Removal After HiringRemoval After Hiring

Job Error CostsJob Error CostsLost EfficiencyLost EfficiencyTurnoverTurnoverAbsenteeismAbsenteeismImpact on Public ImageImpact on Public ImageOverall Employee MoraleOverall Employee MoraleFailure to Meet DeadlinesFailure to Meet DeadlinesLower Profit MarginsLower Profit MarginsDamage by SabotageDamage by Sabotage


Business Reasons to Conduct Business Reasons to Conduct Robust Employment ScreeningRobust Employment Screening

Reduce turnoverReduce turnoverAvoidance of adverse hiring lossesAvoidance of adverse hiring lossesImproved applicant qualityImproved applicant qualityLiability avoidanceLiability avoidanceImproved capability for IRS and INS complianceImproved capability for IRS and INS complianceReduce negative personnel related incidents and Reduce negative personnel related incidents and losseslosses


Employment Screening: Employment Screening: Return on InvestmentReturn on Investment

For Every Dollar Spent On Employment For Every Dollar Spent On Employment ScreeningScreening…… Employers Employers AvoidAvoid Spending;Spending;

$ 3.07 in Employment Turnover costs$ 3.07 in Employment Turnover costs

$ 2.00 in Shrinkage / Theft costs$ 2.00 in Shrinkage / Theft costs

$ 21.65 in Information / Intellectual Property loss$ 21.65 in Information / Intellectual Property loss

$ 43.03 in Negligent Hiring costs$ 43.03 in Negligent Hiring costs

$ 67.63 in Workplace Violence related costs.$ 67.63 in Workplace Violence related costs.

Safety and Security depends on what you Inspect …. not what you Expect !

Corporate Security Services Inc © 2010

Why Screen? Why Screen? –– Reduce Potential Reduce Potential for Legal Liabilityfor Legal Liability

May Arise For Reasons Of:May Arise For Reasons Of:

Respondeat SuperiorRespondeat Superior(A legal rule that the principal or employer is liable for harms(A legal rule that the principal or employer is liable for harms done bydone byagents or employees while acting within the scope of theiragents or employees while acting within the scope of their agency agency or employment.) or employment.)

Negligent Hiring Negligent Hiring The failure to use reasonable care in the employee selection process,

resulting in harm caused to others. Employers have a legal duty not to hire people who could pose a threat of harm to others, which can include everything from slight to fatal bodily injury, theft, arson, or property damage.


Why Screen ? Why Screen ? -- Consumer Consumer ExpectationsExpectations

Consumers expect honesty, diligence, and a Consumers expect honesty, diligence, and a protection from criminal intent and other protection from criminal intent and other adverse incidents from their business adverse incidents from their business partners/suppliers.partners/suppliers.


Why Screen ? Why Screen ? –– Business Business ReputationReputation

Robust Employment ScreeningRobust Employment Screening significantly significantly reduces the potential for adversereduces the potential for adverse incidents incidents and issues that can negatively affect the and issues that can negatively affect the employeremployer’’s business reputation.s business reputation.


Why Screen? Why Screen? Your Organization Your Organization Envisions Building A Envisions Building A ““Dream TeamDream Team””


So I Got the Job?So I Got the Job?

Misrepresented ApplicationsMisrepresented Applications

Former Employers not DisclosedFormer Employers not Disclosed

Unacceptable Driving RecordsUnacceptable Driving Records

Exaggerated/Misleading Claims of AbilityExaggerated/Misleading Claims of Ability

Gaps in EmploymentGaps in Employment

Disclose Criminal Convictions Disclose Criminal Convictions

Indicate Violent TendenciesIndicate Violent Tendencies

Identify History of Drug/Alcohol Identify History of Drug/Alcohol

AbuseAbuse


Reliable Employment Screening Reliable Employment Screening Can Identify Issues Can Identify Issues ………………....

Implementing An Effective Implementing An Effective Employment Screening ProcessEmployment Screening ProcessEmployers Have Recognized Rights To Conduct Employers Have Recognized Rights To Conduct Employment ScreeningEmployment Screening

Federal & State Laws Apply To Employment Federal & State Laws Apply To Employment Screening Actions.Screening Actions.

Written Policy & Procedure Should Be In Place To Written Policy & Procedure Should Be In Place To Guide Employment Screening Methods And Guide Employment Screening Methods And Actions.Actions.

Employers Should Consult with Legal Counsel in Employers Should Consult with Legal Counsel in developing Policy, Procedure, & Forms used in developing Policy, Procedure, & Forms used in Employment Screening Process.Employment Screening Process.


Regulations Governing Regulations Governing PrePre--Employment ScreeningEmployment Screening

The Fair Credit Reporting Act (FCRA) The Fair Credit Reporting Act (FCRA)

The GrammThe Gramm--LeachLeach--Bliley Act 1999Bliley Act 1999

Financial Service Modernization ActFinancial Service Modernization Act

Federal DriverFederal Driver’’s Privacy Protection Acts Privacy Protection Act

State LawsState Laws

Employers Should Consult with Legal Counsel in developing PolicyEmployers Should Consult with Legal Counsel in developing Policy, , Procedure, & Forms used in Employment Screening Process.Procedure, & Forms used in Employment Screening Process.


The Fair Credit Reporting ActThe Fair Credit Reporting ActThe FCRA applies to –

Employers that use the services of a third party in preparation of an employment screening report. If a third party prepares or provides any portion of an employment screening report (such as criminal records, employment references, or education verifications), then the FCRA will apply.

The FCRA was most recently amended by the Fair and Accurate Credit Transaction Act (FACTA or FACT Act) of 2003.

Strict adherence to the FCRA is required when utilizing Consumer Reports.

FCRA Employer RequirementsFCRA Employer RequirementsEmployer Requirements under the FCRA

1. Prior to receiving a consumer report, an employer must certify to the CRA in writing that it will do the following:

• Use the information for employment purposes only.

• Not use the information in violation of any federal or state equal

employment opportunity law.

• Obtain all the necessary disclosures and consents as required by

the FCRA.

• Give the appropriate notices in the event an adverse action is

taken against an applicant based in whole or in part on the

contents of the Consumer Report.

• Give the additional information required by law if an Investigative

Consumer Report is needed.


2. Employers must provide a clear and conspicuous disclosure in writing to the applicant before the report is obtained. Also, employers must obtain a written authorization before obtaining a consumer report (FCRA § 604(b); 15 U.S.C. §1681b(b)).

The disclosure and authorization can be combined in a single document, but should contain nothing more than the authorization and disclosure.


3. Employers need a disclosure form for an Investigative Consumer Report (FCRA § 606(a); 15 U.S.C. §1681d(a)). Often times, the forms are combined.

The applicant must be notified by the user of the Investigative Consumer Report (e.g. the employer), within three days, that an Investigative Consumer Report has been requested and that he or she has the right to obtain additional information as to the nature and scope of the investigation requested.

See the FTC, Notice to Users of Consumer Reports: Obligations of Users Under the FCRA for further details.

Some states may have additional requirements


4. Additionally, the applicant must receive a copy of the FTC document, A Summary of Your Rights Under the Fair Credit Reporting Act.

5. The adverse action rules apply to decisions not to hire an individual based in whole or in part on a consumer report. If adverse action is intended and before it is taken, an employer must provide the applicant with a copy of the report and the FTC document, A Summary of Your Rights Under the Fair Credit Reporting Act (FCRA §604(b)(3); 15 U.S.C. §1681b(b)(3)). This is the first notice, also called the Notice of Pre-Adverse Action.


6. If, after sending out the first notice and related documents, the employer intends to make a final decision not to hire, then the employer must provide the applicant a second notice, also called the Notice of Adverse Action.

This Notice will inform the applicant of the employer’s final decision and will provide a copy of the FTC’s form A Summary of Your Rights Under the Fair Credit Reporting Act. Additionally, the notice must provide the CRA’scontact information (name, address, and phone number), must advise the individual that: (1) the CRA did not take the action and cannot provide specific reasons why it was taken; (2) the individual has a right todispute the accuracy or completeness of the information; and (3) the individual has a right to another free copy of his or her consumer report within 60 days (FCRA § 615; 15 U.S.C. §1681m).

Scope of PreScope of Pre--Employment ScreeningEmployment Screening

The scope of pre-employment background screening typically addresses the following three key elements:

1. Identity Verification2. Personal History Verification3. Credentialing

A pre-employment screening process should consist of background searches that determine if the applicant meets the employer’s requirements in each of the three elements.

The employer needs to determine which searches in each element constitute the best method to conduct the search.

Business factors to consider are:• Business necessity• Nature of the position (Job Relatedness)• Industry specific requirements• Cost• Time sensitive hiring needs

All Background Screening Methods All Background Screening Methods Are Not EqualAre Not Equal

Performed By An Investigative Performed By An Investigative Research Expert Or The Most Junior Research Expert Or The Most Junior Temporary EmployeeTemporary EmployeeSource of Data Source of Data –– Is the Information Is the Information Reliable, Accurate ?Reliable, Accurate ?Are There Safeguards to Prevent Are There Safeguards to Prevent ““False NegativeFalse Negative”” and and ““False PositiveFalse Positive””Results. Results.

All Background Screening Methods All Background Screening Methods Are Not EqualAre Not Equal

Are Alias, Nickname, Maiden Name, and Are Alias, Nickname, Maiden Name, and Surname Searches Performed?Surname Searches Performed?Are Court Record Dispositions Interpreted Are Court Record Dispositions Interpreted Accurately?Accurately?Is the Information/Record returned Is the Information/Record returned Actually the ApplicantActually the Applicant’’s or Someone Else s or Someone Else With The Same Name?With The Same Name?Are You Making Hiring Decisions Based On Are You Making Hiring Decisions Based On Reliable, Accurate Processes and Reliable, Accurate Processes and Information? Information?

All Employment Background All Employment Background Screening Processes Are Not Screening Processes Are Not

EqualEqual““Online InstantOnline Instant”” Background searches are Background searches are problematicproblematic

A A ““National OnlineNational Online”” criminal records search is not criminal records search is not available to the private sectoravailable to the private sector

The individual performing the screening must The individual performing the screening must have experience in background investigation have experience in background investigation practices and legal requirements.practices and legal requirements.


Internal vs. Outsourced Internal vs. Outsourced Employment ScreeningEmployment Screening

Outsourcing eliminates drain and diversion of internal staff Outsourcing eliminates drain and diversion of internal staff resources.resources.

It is rare for internal staff to have investigative experience It is rare for internal staff to have investigative experience and the ability to know whether the source of the data is and the ability to know whether the source of the data is reliable, and to stay current on the intricacies of changing reliable, and to stay current on the intricacies of changing employment screening laws and methods.employment screening laws and methods.

Typically Use of Internal Staff results in assigning the most Typically Use of Internal Staff results in assigning the most junior, or temporary employees to perform prejunior, or temporary employees to perform pre--employment employment screening. screening.

Overall cost reduction and optimum quality control is Overall cost reduction and optimum quality control is realized using an outsourced provider.realized using an outsourced provider.


Avoiding Pitfalls Avoiding Pitfalls -- All Employment Background All Employment Background

Screening Processes Are Not EqualScreening Processes Are Not Equal

““Most Most Online Instant InternetOnline Instant Internet”” Background Services Background Services are less expensive are less expensive but may not yield data that is but may not yield data that is reliable for hiring purposesreliable for hiring purposes. There is a risk of . There is a risk of ““ False False PositivePositive”” and and ““False NegativeFalse Negative”” results with results with ““Online Online Instant InternetInstant Internet”” searches.searches.

A A ““Reliable National OnlineReliable National Online”” Criminal Records Criminal Records Search Search is not availableis not available to the private sector. Only to the private sector. Only Law Enforcement Agencies are authorized to Law Enforcement Agencies are authorized to access the FBI Nationwide Criminal Records access the FBI Nationwide Criminal Records System.System.


Avoiding Pitfalls: All Employment Avoiding Pitfalls: All Employment Background Screening Processes Background Screening Processes

Are Not Equal!Are Not Equal!

The source or repository of the records The source or repository of the records and limitations of the records must be reliable for and limitations of the records must be reliable for making hiring decisions.making hiring decisions.

““Correctional DatabasesCorrectional Databases”” and and ““Archive or Tape Archive or Tape DatabasesDatabases”” sources are not reliable for making sources are not reliable for making hiring decisions. hiring decisions.


Avoiding Pitfalls: Avoiding Pitfalls: ““Online Instant Online Instant National Background ChecksNational Background Checks””

““DoDo--itit--yourselfyourself”” online background checks do not include online background checks do not include alias names, maiden name, name variation searches, etc.alias names, maiden name, name variation searches, etc.

““Instant checksInstant checks”” usually involve searching purchased usually involve searching purchased databases vs. a true search of court system records. There databases vs. a true search of court system records. There is no way to evaluate the sources that were searched.is no way to evaluate the sources that were searched.

““Online Instant InternetOnline Instant Internet”” searches results will frequently searches results will frequently indicate indicate ““No Records Found,No Records Found,”” when criminal records when criminal records actually exist.actually exist.


Reliable Criminal History SearchesReliable Criminal History Searches

Federal Criminal Records SearchFederal Criminal Records Search

Statewide Criminal Records SearchStatewide Criminal Records Search(Where available and Reliable)(Where available and Reliable)

County Court Records Physical County Court Records Physical SearchSearchSex Offender DatabaseSex Offender Database

Federal Criminal Federal Criminal RecordsRecords

Serious crimes such as robbery, kidnapping, drug trafficking, Serious crimes such as robbery, kidnapping, drug trafficking, white collar crime, interstate crimes, and organized crime are white collar crime, interstate crimes, and organized crime are typically handled by the Federal Court system. These cases typically handled by the Federal Court system. These cases can not be found in searches of state and county records can not be found in searches of state and county records systems.systems.

Best practices indicate that Federal criminal history searches Best practices indicate that Federal criminal history searches should be performed in the preshould be performed in the pre--employment screening process.employment screening process.


About Corporate Security Services Inc.About Corporate Security Services Inc.’’s s Pre Pre –– Employment Screening ServicesEmployment Screening Services

Employment Screening Services Are Performed byEmployment Screening Services Are Performed byHuman Resources and Investigative ExpertsHuman Resources and Investigative Experts

Quick Turnaround (3Quick Turnaround (3--5 Business Days)5 Business Days)

U.S. And International Background Screening U.S. And International Background Screening CapabilityCapability

Searches are Customized to Clients RequirementsSearches are Customized to Clients Requirements

Average Of Cost Effective, Tailored Screening Ranges Average Of Cost Effective, Tailored Screening Ranges From $40 From $40 -- $100 Per Applicant$100 Per Applicant

Qualitative, Understandable Report FormatQualitative, Understandable Report Format

Toll Free Fax SubmissionToll Free Fax Submission

Model Hiring Process Forms Adaptable To Your Model Hiring Process Forms Adaptable To Your OrganizationOrganization

What Distinguishes the Corporate What Distinguishes the Corporate Security Services Inc. ProcessSecurity Services Inc. Process

Each PreEach Pre--employment Screening Case Is Handled As An employment Screening Case Is Handled As An Actual Investigation.Actual Investigation.All Applicant Forms And Data Are Thoroughly Reviewed All Applicant Forms And Data Are Thoroughly Reviewed For Errors And Omissions Prior To Search Regimen.For Errors And Omissions Prior To Search Regimen.All Name Variations Are Searched, Such As Maiden All Name Variations Are Searched, Such As Maiden Names, Aliases, Hyphenated Surnames, Etc.Names, Aliases, Hyphenated Surnames, Etc.Robust Security Measures to Protect Applicant Data.Robust Security Measures to Protect Applicant Data.Use Only Use Only ““ Real TimeReal Time””, Direct Data from Court Records., Direct Data from Court Records.17 Year History With No Incident of Reporting A 17 Year History With No Incident of Reporting A ““False False NegativeNegative”” or or ““False Positive Results.False Positive Results.Intense Client Communication/Update ProcessesIntense Client Communication/Update Processes

The The ““On CallOn Call”” team of team of Security and Human Security and Human Resource experts.Resource experts.

www.corpsecure.comwww.corpsecure.com

888888--822822--42774277

[email protected]

background screening presentation 2011

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