Five Trends to Watch in Employment Verification

Published on Thu, 01/09/2014 - 15:39
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Every company wants to hire the best talent. After all, a bad hire can cost you plenty – internal theft, personal or property damage to third parties, costly workers’ compensation claims, financially draining litigation, and even irreparable damage to your reputation.

So it’s no surprise that background screening for prospective hires is not only on the rise, but also getting more rigorous and comprehensive. With growing popularity comes changing laws and regulations, so it’s crucial for employers to stay up to date on the latest developments. Here are five of the most important trends and best practices to keep in mind.

  1. New EEOC guidelines: Since January 1, 2013, employers have been prohibited from using “blanket prohibitions” against hiring anyone with any kind of a criminal record under the new Enforcement Guidance issued by the Equal Employment Opportunity Commission (EEOC). Make sure you’ve made the necessary adjustments to your screening practices. Don’t forget that what might look like a red flag might actually be a red herring. For example, while a citation for fishing without a license creates a criminal history, it doesn’t do much to portray the skills an otherwise reliable job candidate can bring to your team.
  2. More lawsuits: Consumers are increasingly filing class action lawsuits against companies for not fully complying with the Fair Credit Reporting Act when conducting background checks. Complaints include improper review of possible criminal record hits with applicants and improper use of online applicant tracking systems. To use credit information in an employment situation, you’ll generally need to show a reasonable connection between that information and the job description.
  3. Background screening firms under scrutiny: In 2012, a top background screening company was slapped with a $2.6 million penalty by the Federal Trade Commission (FTC) for violating the FCRA on several counts. And in 2006, another consumer data broker was hit with a $10 million civil penalty. The good news? The National Association of Professional Background Screeners (NAPBS) reports that over 98 percent of background screening companies have customer disputes less than 5 percent of the time, and more than 95 percent of disputed background check reports are found to be accurate.
  4. Federal crackdown on mobile apps: If you’re into all the latest gadgets and apps, take note. The FTC has taken steps to ban background screening mobile apps that violate the FCRA, and some application creators have been fined for not complying with federal regulations. Bottom line: always use established background screening companies.
  5. New rules on social media data: Many states are passing laws prohibiting employers from asking for social media usernames and passwords of applicants and current employees for background check purposes. This reflects a growing trend toward more restrictions on searches of applicants’ personal data prior to hire. Be sure you know the laws in your state.

Be smart about how you conduct employment verifications and background checks, and use the information you collect wisely to avoid discrimination. The EEOC recommends employers “develop a narrowly tailored written policy and procedure for screening applicants and employees.” And make sure your managers, hiring officials, and decision makers know the policy and the laws, and fully document the decision making process for every applicant.

Screening job candidates has increasingly become a crucial step in the hiring process, and doing it right will go a long way toward helping you hire the best talent, minimize workers’ compensation claims and eliminate the costs of bad hiring decisions.

Every company wants to hire the best talent. After all, a bad hire can cost you plenty – internal theft, personal or property damage to third parties, costly workers’ compensation claims, financially draining litigation, and even irreparable damage to your reputation.

So it’s no surprise that background screening for prospective hires is not only on the rise, but also getting more rigorous and comprehensive. With growing popularity comes changing laws and regulations, so it’s crucial for employers to stay up to date on the latest developments. Here are five of the most important trends and best practices to keep in mind.

  1. New EEOC guidelines: Since January 1, 2013, employers have been prohibited from using “blanket prohibitions” against hiring anyone with any kind of a criminal record under the new Enforcement Guidance issued by the Equal Employment Opportunity Commission (EEOC). Make sure you’ve made the necessary adjustments to your screening practices. Don’t forget that what might look like a red flag might actually be a red herring. For example, while a citation for fishing without a license creates a criminal history, it doesn’t do much to portray the skills an otherwise reliable job candidate can bring to your team.
  2. More lawsuits: Consumers are increasingly filing class action lawsuits against companies for not fully complying with the Fair Credit Reporting Act when conducting background checks. Complaints include improper review of possible criminal record hits with applicants and improper use of online applicant tracking systems. To use credit information in an employment situation, you’ll generally need to show a reasonable connection between that information and the job description.
  3. Background screening firms under scrutiny: In 2012, a top background screening company was slapped with a $2.6 million penalty by the Federal Trade Commission (FTC) for violating the FCRA on several counts. And in 2006, another consumer data broker was hit with a $10 million civil penalty. The good news? The National Association of Professional Background Screeners (NAPBS) reports that over 98 percent of background screening companies have customer disputes less than 5 percent of the time, and more than 95 percent of disputed background check reports are found to be accurate.
  4. Federal crackdown on mobile apps: If you’re into all the latest gadgets and apps, take note. The FTC has taken steps to ban background screening mobile apps that violate the FCRA, and some application creators have been fined for not complying with federal regulations. Bottom line: always use established background screening companies.
  5. New rules on social media data: Many states are passing laws prohibiting employers from asking for social media usernames and passwords of applicants and current employees for background check purposes. This reflects a growing trend toward more restrictions on searches of applicants’ personal data prior to hire. Be sure you know the laws in your state.

Be smart about how you conduct employment verifications and background checks, and use the information you collect wisely to avoid discrimination. The EEOC recommends employers “develop a narrowly tailored written policy and procedure for screening applicants and employees.” And make sure your managers, hiring officials, and decision makers know the policy and the laws, and fully document the decision making process for every applicant.

Screening job candidates has increasingly become a crucial step in the hiring process, and doing it right will go a long way toward helping you hire the best talent, minimize workers’ compensation claims and eliminate the costs of bad hiring decisions.

Looking for more insightful human resources information? Heffernan Insurance is here to help! Check out our webinar calendar for upcoming webinars on the topic, or visit our webinar archive for past webinar recordings.

Looking for more insightful human resources information? Heffernan Insurance is here to help! Check out our webinar calendar for upcoming webinars on the topic, or visit our webinar archive for past webinar recordings.