lester s. rosen- 1 safe hiring practices and pre-employment screening presented for the hr...

Lester S. Rosen-www.ESRcheck.com

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Safe Hiring Practicesand Pre-employment Screening

Presented for the HR Screener—2003

Presented by Les Rosen, Attorney at Law and President, Employment Screening Resources (ESR),

Novato, Ca.

Phone: 888-999-4474 E-mail: [email protected]

http://www.ESRcheck.com

http://www.esrcheck.com/


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Employee problems caused by problem employees

• Safe Hiring is aimed at helping employers decide who NOT to hire

• Essential function that supplements the process of identifying, recruiting, attracting and retaining top performers

• Human assets are typically the single largest line item in a company budget

• Yet, most employees selected based upon subjective criteria and interviews--average hiring decision made in 4.6 minutes at interview

• More time often spent on selecting a copier-yet a bad copier cannot put you out of business


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Why be concerned about Safe Hiring?-- “Parade of Horribles”

• Hiring criminals can create risk of workplace violence• Statistical certainty that a person with serious criminal

record will be hired without safe hiring and screening-- 10% rate of criminal records among those screened

• Per 1998 DOJ study, about two million violent incidents 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

• Past criminal conduct is frequent common denominator in episodes of violence or criminal conduct

• Theft, Fraud and Embezzlement - cost $50 Billion


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“Parade of Horribles” (2)

• Fraudulent credentials: Up to 40% of resumes contain material lies or omissions about education, past jobs or qualifications

• Businesses Week called it, “ResumeGate.”• Lawsuits: Negligent Hiring, Retention, Promotion

or Supervision Wrongful termination • Brand destruction – “just one bad apple”• Stock devaluation (e.g. Veritas when discovered

CFO faked MBA)• Lost customers and workplace disruption


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Employee Turnover Cost

• Average firm spends 36 percent of revenue on human capital expenditures

• A 25% turnover rate can mean firm is spending 9% of revenues on turnover

• Direct costs are separation costs (including possible litigation) and replacement costs

• Indirect costs can be loss of productivity, knowledge, know how and disruption


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Workplace Violence

• Literally millions of incidents--Per 1998 DOJ, about two million violent incidents at work a year including 1,000 homicides, 600,000 assaults, 42,000 rapes/sexual assaults and 23,000 robberies

• Even a threat of violence is very serious• American business looses over $55 BILLION

dollars in lost wages as a result of missed worked days per US Dept. of Justice study (1994)

• Past criminal conduct is common denominator in incidents of workplace violence


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Employee turnover cost

• Average firm spends 36 percent of revenue on human capital expenditures

• A 25% turnover rate can mean firm is spending 9% of revenues on turnover

• Direct costs are separation costs (including possible litigation) and replacement costs

• Indirect costs can be loss of productivity, knowledge, know how and disruption


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Embezzlement

• Embezzlement can occur when there is opportunity+motivation+rationalization

• Embezzlement is a crime of violating trust--criminal cannot get access to assets unless they gain your trust

• The problem--embezzler can have same traits as best worker in order to accomplish crime

• Pre-employment screening key solution• Background checks can discourage embezzler from

applying and may uncover either criminal records or a negative reference (although some past employers may not give information)


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Workplace Theft

• 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


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Litigation Exposure

• Every Employer has legal duty to exercise 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.

• Per recent California survey, employers lose 60 percent of negligent hiring cases with verdicts average about $3 million

• Average settlement is $500,000 and attorney fees


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Why Employers are at a Disadvantage in Litigation

• Cases will normally have some sort of serious harm (death, assault, rape, sodomy, child molest, theft, embezzlement, Identity theft)

• Employers have ability, duty and resources to prevent harm through due diligence

• Jurors are often employees themselves• A jury uses the “reasonable person” standard• Unless employer has a compelling reason why

injury not their fault, employers usually lose• Employers cannot claim too costly or difficult


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Problem--Gut instinct Alone does not Work

• Cannot detect potentially bad hire by detecting lies at interview

• Studies show that even though people believe they can detect liars, only 50-50 chance at best

• Per recent study, even trained law enforcement officers are only right about half the time

• Body language, eyes, voice, etc are NOT reliable - applicant may be nervous while a liar tell the lie so often it comes across as true


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The 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

• Fingerprint checks from FBI only available when mandated by law (e.g. teachers/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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Safe Hiring Program

• The solution is a Safe Hiring Program• Series of policies, practices and procedures

designed to minimize the probability of hiring a dangerous, questionable or unqualified candidate

• Critical elements are the Application, Interview and Reference Checking process - costs employers nothing

• 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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Pre-employment Screening

• Techniques used to tell employer who NOT to hire, as opposed to other techniques aimed at locating a candidate who is the best “fit’ and best qualified

• Must be integrated in entire hiring process• Using a screening firm on a finalists is only

one aspect of safe hiring• Safe hiring is a process, not an event


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Goals of a Safe Hiring Program

• Purpose is to mitigate the risk involved in the largest single line item of most firms

• A safe hiring program helps employer to:

1. Discourage applicants with something to hide

2. Encourage honest interviews

3. Demonstrates due diligence

4. Eliminate uncertainties


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ROI on Screening

• Per Small Business Administration, every dollar invested in screening can save $5 to $16 in reduced absenteeism, improved productivity and lower turnover

• Value of preventing the “Parade of Horribles.”

• Calculate ROI using turnover calculators


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What It Is Not

• 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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The critical pre-hire process (9:30-10:10)

• The Application, Interview and Reference checking process


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The Catch 22--No National Criminal or Credentials Database• Problem: Even though safe hiring is a necessity, no easy

tool.• Contrary to popular belief, there is no national database

available to private employers for criminal records or credentials

• The National Crime Information Center (NCIC) is restricted to law enforcement

• Fingerprint checks only available when authorized by federal or state law (e.g. teachers, or child care workers)

• Even the NCIC has a significant error rate and “hit” reports can be confusing


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Must Search Each Relevant Courts

• The primary method for obtaining criminal records is to physically go to each relevant courthouse and look!!

• 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

• Errors possible if jurisdictions missed or mistake make by human researcher


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The AIR Process

• First line of defense is the AIR Process--Applications/Interview/References

• Firms utilizing best practice in the AIR process have a low rate of criminal record hits

• Safe Hiring is an integrated approach across the organization and the hiring process

• Depending upon criminal record checks may not be due diligence since criminal records searches are imperfect and subject to human error


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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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2. Applications are a Best Practice

• Resumes often not complete or clear

• To applicant, a resume is a marketing tool

• Applications ensures uniformity

• Also, requires applicant to 1. provide all necessary information and, 2. prevents employer having impermissible information


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3. Question about Past Convictions

• CRITICAL: Specifically ask if person has been convicted of a crime, or has pending charges

• Use broadest legal language for both felonies and misdemeanors (but not overboard—do NOT ask about arrests or open ended “waffle questions” were applicant can argue did not lie)

• Leaving out misdemeanors is a BIG mistake (although there are some limitations in California)

• Conviction does not automatically bar applicant • REASON: Nationally, approximately 10% of job

applicants have a relevant criminal record


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4. Need Critical Language

• Need statement that any fraudulent statement or material omissions grounds to terminate the process, or employment no matter when discovered

• May also include other essential language (employment at will/arbitration/non-discrimination policies,etc)

• Also ask for past addresses


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5. Look for Red Flags on Applications

• When there is a problem employee, there was usually a red flag on the application: – Applicant does not sign application– Applicant leaves criminal questions blank (the honest criminal

syndrome)– Applicant self-reports offense– Applicant fails to explain why left past jobs– Applicant fails to list past supervisors or details of past

employment– Excessive cross-outs and changes– Incomplete information – Applicant fails to explain employment gaps


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6. Interview Process-the Five Questions

• Away ask these five question (during housekeeping stage of interview)-

• Since applicant signed a consent and believes you are doing checks, powerful incentive to be truthful


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Five Questions

– 1. We do background checks on everyone we make an offer to. Do you any concerns about that you would like to discuss? (Good applicants will shrug off)

– 2. We also check for criminal convictions for all finalists. Any concerns about that (make sure question reflects what employer may legally ask in your state)

– 3. We contact all past employers. What do think they will say?

– 4. Will past employer tell us that e.g. you were tardy, did not perform well etc.

– 5. Use interview to ask questions about any unexplained employment gaps


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Training Video (10:10-10:30)

• Safe Hiring Video


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The Legal Aspects of safe hiring (10:45-11:15)

• 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

• FTC Staff Letters-Advisory (not the force or effect of law)

• Older commentaries, informal letters opinions and Congressional record

• 2003-FTC has opened up FCRA for comments

• General: www.ESRcheck.com

• Special California rules: http://www.esrcheck.com/web/articles/AB655-California.html

http://www.ftc.gov/os/statutes/fcra.htm









http://www.ftc.gov/os/statutes/fcrajump.htm









http://www.esrcheck.com/

http://www.esrcheck.com/web/articles/AB655-California.html


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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

• 4. Beware of special state rules

• See Special Report in Materials on Complying with the FCRA in Four Easy Steps


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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

• CRA will typically provide such a form• New screening industry association is forming that

may eventually standardize the employer certification language


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Disclosure and Authorization Issues

• Excess verbiage rule-can combine disclosure/authorization BUT cannot put excessive language on form that detracts from clear meaning

• Waiver rule-Per FTC letter (Hauxwell) cannot make consumer waive rights under FCRA (some firms use a waiver to the extent permitted by law)

• Date of birth issue on forms• Screening firms use many different forms-new association

may suggest standard form• “One-time” Disclosure/Authorization good for future

screening with limits


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Investigative Consumer Report

• Per section 606(a) & (b), special disclosure rules• Applies if a screening firm goes beyond asking for

FACTS and request OPINIONS• 606(a)-Employer must disclose that an ICR may

be obtained and consumer has right to additional disclosures and a copy of a Statement of Rights

• Must be mailed or delivered not less then 3 days after report requested (usually part of the form provided to new employees at beginning of process)


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Investigative Consumer report (2)

• 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

• Per Hauxwell letter, because of the ambiguity of the section, an employer could either provide the Sec. 606(a) “Summary of Rights” at the outset, or wait until an applicant’s 606(b) request

• As practical matter, in pre-employment situation, this is handled in the forms provided by the CRA


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State Laws: California Trends

• At least 20 states have consumer laws that are arguably broader than the Federal FCRA

• CA first state to apply FCRA type rules on employers who obtain public record themselves (AB 655 in 2002)

• Law passed in response to Lewis case out of Ohio, where FCRA loophole allowed employer that obtained information directly to “blackball” applicant without notification

• 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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Privacy/Defamation

• Employer can be sued for invasion of privacy if screening invades a zone of privacy without justification and/or employer utilizes overly intrusive tools

• Balancing issue-weighing the consumer's privacy interest against employer’s legitimate needs and the technique used

• Recommendation: Follow FCRA procedures (content, notice) even if performed in-house

• FCRA is the Gold Standard for Privacy• Can also be sued for intentional/ negligent infliction of

emotional distress and defamation


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EEOC and State rules

• 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

• See Chart on acceptable and unacceptable questions• 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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Legal Questions

• Cannot screen or seek anything could not ask in interview

• Follow the Fair Employment Guidelines in your state

• Cannot unduly invade privacy• Treating candidates the same-may want to

consider standard form or structured interview so that all candidates have the same questions asked


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Guidelines for employment inquiries

• Is it job related (e.g. a valid predictor of job performance)?

• Does it discriminate against a protected groups (sex, age, marital status, race, physical impairment, etc)?

• Does it indirectly discriminate?• Does it violate a statutory (substantive) right? (e.g.

no arrest data)• Does it violate a procedural right? (e/.g. FCRA)


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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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Legal Protection

• Many states have laws that protect employers

• Employers given some degree of legal protection from defamation if– 1. Other employer initiates contact– 2. Information job related– 3. Good faith belief truthful


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Is an Employer Really Protected?

• Many labor lawyers argue that the risk of defamation lawsuit still outweighs benefits in giving reference

• No legal duty to give reference information or even verification

• No clear definition of what “truthful” or “job related” means


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It Gets Even Worse

• Calif. school case--school administrator acted inappropriately with student

• First school district gave positive recommendation, but left out negative

• First school liable-- could not misrepresent qualifications and character where there is a foreseeable risk of injury


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CATCH--22

• If employer gives reference, and leaves out the negative, could be liable to 3rd parties

• If employer gives the negative, can risk defamation lawsuit

• Since employer has no duty to say anything, most labor lawyers recommend the basics--start date, stop date, and job title

• Some will confirm salary only if given


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What is Negative Information

• If person embezzles and is convicted-probably on safe ground

• What if suspected of conduct, but no conviction?

• What if accused of harassment?

• Does it matter if there is an investigation?

• What about private behavior?


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Strategies when ASKED for References

• Determine your policy and be consistent• Written policy everyone aware of• All info through a central source only• Clearly document who is asking and what

is given by whom • Written release provides protections• If there is a current lawsuit or claim, strictly

limit info to the basics


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Reasons Need Strict Policies

• There are professional firms that are hired by applicants just to see what is being said about them

• Statements can be the basis for litigation--employers need to know who said what and when

• REMEMBER: No such thing as “off the record.”


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When the Reference is Negative

• Give notice at exit interview of info that will be given --reason most ex-employees see lawyers is that they were surprised

• Make sure everything is factually correct

• State facts and avoid conclusions--e.g. don’t say incompetent, but describe problem

• Include favorable facts

• Make sure personnel file accurate


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Other Strategies

• Some employers belong to 900 service• Many route all calls to payroll or accounting• Some employers use “informal” methods to

give negative reference; e.g. suggest that applicant sign a release for performance evaluations

• Can give good references but say No Comment if reference would be negative?


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Challenges when trying to OBTAIN references

• Substantial challenge--sometimes not possible

• Try to locate manager or supervisor, or even former co-worker

• Professional Networking• Informal means of gleaning information

“between the lines”• Supplied vs. Developed references


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Practical Difficulties

• 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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Practical Considerations

• Contact Current employer? Some employers will immediately terminate someone looking for new job

• Fake or set-up references? (Use phone number applicant gives you?)

• Keeping track of each applicant status• Getting callbacks--need to be relentless• Calling, faxing and/or writing--


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Why if only get NO COMMENT

• Can at least verify dates of employment• Important to make sure no unexplained gaps

(which relates to criminal record searches)• Should document all efforts made and all

results• Best protection against NEGLIGENT

HIRING is at least trying• Demonstrates DUE DILIGENCE


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Reference Questions

• Goal: Legal, professional, thorough and insightful (i.e. revealing).

• Are they legal questions

• Are they job related

• Are they informative

• Use of open ended questions to get narrative answers


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Reference Questions

• Use of questions showing behavior--e.g. “Can you give me a specific example of how he/she was a great team player?”

• Ask targeted question--”The candidate states he/she implemented a sales training program. Can you tell me about his/her contribution.”

• Read the candidate resume--see what the person said.


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The “Eligible for Rehire” Questions

• Ambiguous since applicant technically eligible to come back does not mean past employer would rehire.

• Need to ask if they would rehire if they had the opportunity


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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

• Verification of factual matters - e.g., Education, job history, professional licenses

• Reference checking - e.g., Job performance


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Additional Tools

• 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• 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 :– 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 ApplicantLegal 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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5. If Obtained by Outside Agency, Must Follow FCRA

• Employer (internal security) can go to all the necessary courthouses themselves, or hire an outside agency

• If use outside agency, search covered by the federal Fair Credit Reporting Act (FCRA)

• FCRA applies to both background screening agencies and licensed private investigators who regularly research backgrounds--called Consumer Reporting Agency (CRA)


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If obtain internally, special issues

• If internal security obtains records, not limited by seven-year rules (but see special CA rules)

• However, easy to fall into a traps that violate FCRA


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6. Special State Rules on Criminal Records

• Need to be aware of special state rules

• Numerous states have rules that limit the consideration of criminal records , such s diversion, or cases that have been expunged


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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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9. Policy on Convictions

– Individualized process utilizing EEOC factors– Have policy that employer maintains a safe

work place and will conduct strict review of any application with a criminal record, but no automatic disqualification

– If exception made, document reasons (in case sued by third party for injury, or future applicant with similar record not hired)

– Utilize fair, consistent and documented procedures on all applicants


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10. If Person is Still Hired

• Document reasons and processes

• Ensure person is in a job for which they are reasonably suited

• Any special supervision or assistance necessary to help the person succeed and maintain safety?


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Implementing a Background Screening Program (3:15-4:00)

• 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:– 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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S.A.F.E Hiring System

• S-Set-up a program, policies and procedures to be used throughout the organization.

• A-Acclimate/train all persons with hiring duties• F- Facilitate/Implement the program.• E-Evaluate and audit the program by making

sure that everyone responsible understands that their compensation and advancement is judged in part by the attention they pay to the hiring process. Organizations typically accomplish those things that are measured, audited and rewarded.


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Set-Up Program

1. Who is in charge—For any program to succeed, someone must have both the responsibility to carry it out and the authority.

2. Policies--Have internal policies and procedures in place. The critical elements are the Application, Interview and Reference Checking process, also called the AIR process followed by other checks (criminal, education, etc)

3. Policies for Privacy and consistency


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Acclimate/Train

• It is recommended that each hiring manager go through a training process on the AIR process.

• Training includes the importance of safe hiring and pre-employment screening to the organization, how to implement the AIR process, and why it is personally a matter of importance to hiring mangers that due diligence be demonstrated in the hiring process.


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Facilitate/Implement

• In order to facilitate the program, it is recommended that each hiring manger be provided with a Safe Hiring checklist that goes into every applicant file.

• Makes it easier for hiring mangers to follow the program.

• Creates a routine and provides a clear audit trail.


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Evaluate/Audit

• General rule: members of an organization accomplish those things that are measured, audited and rewarded.

• Hiring managers must clearly understand that they will be audited periodically on how well they implement and follow the system. Otherwise, the S.A.F.E. Hiring Program is just a flavor of the day from the central office.

• Audit trial must go all the way up the organization.


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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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Outsourcing vs. In-house

• Firms typically outsource those functions that although critical, are not their core competency

• With screening, some functions a firm can and should do in-house, such as initial phone references to determine if applicant is a good fit

• However, may other tasks requires specialized knowledge and resources.

• Typically cost-effective to outsource.• Also some advantage to having neutral third

party run checks


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Criteria for Outsourcing

• 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 expertisec. Personal service and consulting, not just a raw

data providerd. Pricing. e. Turnaround time. f. Internet order/reporting options


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Current employees

• Employer may need to screen current employees• Legal considerations-must follow FCRA• If employee refuses to agree, best practice is to tie

agreement into next pay increase or promotion• Cultural consideration-critical that there be

employee buy-in and assurance that nothing will occur automatically


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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 the Five critical

interview questions

• 7. Check past employers/schools

• 8. 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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If your firm is sued, can you show Due Diligence? (4:00-4:30)• Question before jury-did your firm take

appropriate steps in its hiring to protect the public, co-workers or others at risk?

• Technique: Trial attorney's identify the fundamental thrust of their case and give it a test drive.

• In order to determine how your firm may do, and to establish a benchmark—use a common scenario and ask an “average” person their reaction to what your organization does for safe hiring.


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Why employers are at a disadvantage in litigation

• Can be sued for serious injury to employee or family member

• Employer had greater ability and resources to prevent harm through safe hiring

• Employer has a legal duty of care• Jurors are often employees themselves• Unless employer has a really good reason why

injury not their fault, employers lose the majority of cases


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Benchmark exercise

• Assume your organization hired an accounting clerk who falsified his/her credentials AND attacked a supervisor when confronted with numerous errors

• Describe what your firm (or a past firm) did to exercise due diligence

• Hint: Not sufficient to merely say had a background firm do a check:– What due diligence exercised in selecting firm– What steps taken pre-hire in the application, interview

and reference checking process before background check


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Safe Hiring Audit

• Goals: Perform a self-assessment audit of procedures in chronological order

• Use audit to identify strengths and weaknesses, areas that need improvement and compliance.

• Caution: This is for educational purposes only-do not create a document that can be used against your organization in court.

• Formal audit can be conducted with assistance of firm’s attorney


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Advantages of an Audit

• General rule: members of an organization accomplish those things that are audited, measured and rewarded.

• A safe hiring program will be most effective if everyone involved clearly understands that they will be audited periodically, and their compensation depends in part on results

• Otherwise, hiring managers may just assume that the safe hiring program is just a flavor of the day from the central office.

• Audit trail must go all the way up the organization


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Methodology

• For each of the 25 steps below, measure your organization on a 0-4 scale (or A,B,C,D and F)

– “0” means doing nothing or out of compliance (F)

– “1” means taking some steps but falls short of what an employer should do (D)

– “2” means taking some measures but need to improve (C)

– “3” means taking strong measures (B)

– “4” means your operation could be a model for other firms (A)


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Documentation is the KEY

• In a lawsuit, documentation is the critical factor• For example., not sufficient to simply have a

training session• Can you document who attended, when, if they

stayed for the entire time, what was taught, if there was any follow-up

• Need to have that in WRITING• Cannot score an”A” without documentation


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1. Are there written programs, policies and procedures in place

• Is there a written company policy on safe hiring?

• Is there a procedures memo on the safe hiring program used?

• Does the employee manual address safe hiring issues?


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2. Have policies and procedures been reviewed for legal

compliance• Federal Fair Credit Reporting Act (FCRA)

followed if third party firms involved• EEOC And California DFEH Non-Discrimination

Rules • ADA and state ADA rules• Specific state laws (i.e., California regulates both

third-party screening AND internal employer investigations through the Investigative Consumer Reporting Agencies Act)

• Privacy and Defamation


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3. Communication of policies and procedures

• Is the company's policy on safe hiring communicated effectively to the workforce and managers?

• FACTORS:– How frequently is the information communicated? – Can organization document the communication? (I.e. If

you were in a deposition, how can you document there was communication of the policy and what are the details)

• HINT: Written documentation works best detailing dates and times


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4. Organizational responsibility for safe hiring

• Is there a position specifically responsible for safe-hiring practices I.e. is that in someone's job description

• If safe hiring is decentralized in hiring departments, are there policies and procedures in place for uniform procedures across the organization, review and audit of performance, and training?


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5. Tools and Training to ensure hiring managers follow plan

• Is there training for hiring managers, HR, etc.? • FACTORS:

– How is the training conducted?

– Frequency of training?

– How is training success monitored and measured?

– Is an identifiable person responsible to analyze, implement, and evaluate the training program?

– How documented?


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6. Auditing of safe-hiring practices

• Is there a documented audit procedure to ensure safe-hiring practices are followed? (i.e. can you prove someone was auditing procedures to see if it was followed)

• FACTORS:– How the is the completed audit information maintained? – How frequently does auditing occur? – Who conducts the audit process? – Does the audit trail go to the TOP (i.e.. local managers

checked by regional managers, checked by division manager, checked by HR Director, etc)


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7. Are there consequences for not following safe hiring program• Are there consequences if hiring manager,

HR, etc. fails to implement, follow plan?

• Can employer document that anyone not following procedures is adversely impacted?


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8. Procedure to place applicants on notice

• Is there notice in the job announcement, bulletin, classified advertisement, Internet site, etc. that you perform background checks?

• Is there a notice on the application form that a prospective candidate receives?

• Do applicants sign a RELEASE for a background check?

• Reason: Discourages applicants with something to hide/encourages applicants to be truthful


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9. Does the firm use an application form?

• Application process is a best practice• Reasons:

– Resumes often not complete or clear– To applicant, a resume is a marketing tool– Applications ensure uniformity– Also, requires applicant to provide all necessary

information, prevents employer having impermissible info, and gives employer place to have applicants sign certain statements

– If no application process, is there a supplemental form with necessary language?


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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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12. Are forms provided by screening service complete and

legally compliant? • Form by a screening service should ask for addresses

for past seven years AND request permission for future screenings (although some possible CA limits)

• Are forms fully FCRA compliant?• Do forms comply with the many provisions of CA

law? (Screening forms used in other 49 states are not legal in CA)

• Has attorney reviewed FCRA/California compliance issues


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13. Reviewing Ten potential Red Flags on application

• 1. Does not sign application

• 2. Does not sign release• 3. Leaves criminal

questions blank (the honest criminal syndrome)

• 4. Applicant self-reports offense

• 5. Fails to identify past employers

• 6. Fails to identify past supervisors

• 7. Fails to explain why left past jobs

• 8. Excessive cross-outs and changes

• 9. Unexplained employment gaps

• 10. Explanations for employment gaps or leaving past jobs do not make sense


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14. In reviewing applications or resumes, does firm look for

employment gaps?– Reasons: 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


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15. Are interviewers trained in legal compliance?

• Treating all applicants in a similar fashion• Questions that may not legally be asked (i.e.,

questions that are discriminatory or prohibited by law)

• How to respond when an applicant volunteers impermissible information

• Statements NOT to make to an applicant, such as promises about the job

• Uniform note taking and record keeping procedures no notations on resume


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16. Five Critical Questions Used in STRUCTURED Interview?

• Since they have signed a consent and believe you are doing checks, powerful incentive to be truthful– 1. We do background checks on everyone we make an offer

to. Do you any concerns about that you would like to discuss? (Good applicants will shrug off)

– 2. We also check for criminal convictions for all finalists. Any concerns about that? (make sure question reflects what employer may legally ask in your state)

– 3. We contact all past employers. What will they say?– 4. Will past employer tell us that e.g., you were tardy, did

not perform well, etc.? (job related issues only)– 5. Unexplained employment gaps


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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• CIP: Computer school/carpet cleaner


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18. Does firm take any other steps?

• 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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19. If outsourced to 3rd party firm, can employer demonstrate

Due Diligence in selection?• If background failed due to screening firm, employer

may be liable if failed to exercise due diligence in selection of firm

• Factors:– Expertise/knowledge of the service provider. – Legal compliance--FCRA and state law compliance. – Personal service and consulting—providing professional

consulting services – Training/consulting services available. – Pricing. – Secured internet order/reporting options.


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20. Mechanics of a screening program documented?

• Process to send requests to screening company, track progress, receive reports, maintain privacy and restrict to only authorized persons.

• Stage in hiring process for screening (typically only the finalists are subject to screening).

• Degree of screening for each position (not every position needs to be screened at the same level).

• Uniform screening procedures (similarly situated applicants treated the same-non-discriminatory)

• Storage and retention of reports (separately from personnel files).


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21. Policy or procedure for use of negative information?

• Policies -- are there written guidelines to follow? • Documentation -- are all procedures and decisions

documented to file? • Individualized review-flat policy can be

discriminatory • Uniformity -- are similarly situated applicants

treated the same? • Legal compliance -- If third party utilized under

the FCRA, procedure to ensure pre-adverse action and post-adverse letters?


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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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23. Policy if person with negative information hired?

• Firm has examined the type of support, supervision and or structure needed to improve the chances of success with the organization

• Firm has considered the nature of the job and the circumstances of the past offense to take appropriate measures to protect the firm, co-workers and the public from harm

• Firm has documented decision making factors


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24. Procedures if employment before the background check

• If employment begins before completion of background check, need written statement that employment is conditioned upon receiving a report that is satisfactory to the employer.

• Do not want to debate what is an acceptable background report

• Issue: may need to escort person of premises if background check is negative


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25. Supervisor policies post-hire

• Are supervisors periodically trained and educated regarding the employer's liability for negligent retention, supervision or promotion?

• Are supervisors trained to recognize, report and deal appropriately with workplace misconduct?

• Procedure to investigate workplace misconduct? • Is there a mechanism for workers or managers to report

and record workplace misconduct? • Is it part of written job descriptions for supervisors to

record, report and address workplace misconduct and part of performance appraisal


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Additional Resources

– Checking for Crimes-http://www.esrcheck.com/web/articles/article3.html

– Ten Signs you are hiring a lawsuit http://www.esrcheck.com/web/articles/article28.html

– Safe Hiring Audit-http://www.esrcheck.com/web/articles/Safehiringaudit.htm

– General: http://www.ESRcheck.com

lester s. rosen- 1 safe hiring practices and pre-employment screening presented for the hr...

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