How well do you know your current employees? The person who just applied for a job? There is no doubt that most employees are hardworking, honest people with clean records, but even one bad apple could land you in a whole lot of trouble. It doesn’t take much imagination to foresee a bumpy road ahead if you hire someone who has been convicted of driving while drunk, hit and run, assault (with or without a deadly weapon), attempted or actual murder, sexual abuse, forgery, robbery, possession of stolen goods, dealing drugs or check fraud.

Let’s look at some specific examples. If you hire a person with a bad driving record for a position requiring him or her to drive or operate equipment, you’re opening your company up to not only the possibility of damage to or loss of expensive vehicles and equipment, but also a lawsuit if that person causes an accident. Suppose you hire someone who has a bad credit history or who has been convicted of a financial crime to handle company finances. A person with that type of background might be inclined to steal money, tools or equipment, write fraudulent checks or otherwise misuse company funds. Or, what about a company that hires a registered sex offender who thereafter sexually harasses or assaults another employee? It could be facing a lawsuit for making a bad hiring decision.

Because the possibilities are endless, more and more employers are performing background checks on existing employees and new hires to minimize potential legal and financial exposures. That is not to say, however, that a company should not hire a person just because he or she has a record. In some states, that might be illegal. Just make sure you know who you are hiring and whether or not he or she is suited for the position in question.

Background checks can be an important part of your company’s risk management strategy, especially with regard to new hires. By checking the background of new hires, your company can avoid the expense of recruiting, hiring and training a new employee only to find out that he or she is a troublemaker or a potential liability to your company.

At the same time, you can ensure that the people you hire are who they say they are.

It is important to note that it is not uncommon for an employee to provide phony credentials, falsify a résumé or provide misleading or inaccurate information on their application. Don’t forget that the government is holding employers responsible for hiring illegal immigrants.

Another advantage regarding new hires is that if they know that a background check will be made, they might not apply for fear that you will discover a checkered past or false identity. For example, drug users seldom apply to companies that have pre-hire and random drug testing policies. Additionally, if a company has a policy of not hiring an applicant or terminating an employee for falsification of an employment application, problems can often be avoided.

One potential disadvantage concerns making background checks on existing employees, who might consider it to be an invasion of their privacy. One way to avoid that is to explain to them the reasoning about why it is necessary. For example, most background checks screen for criminal records, including those related to violent crimes and dishonesty, which helps protect all your employees.
There is also the possibility that you have an existing employee who has worked for the company for a while, is a good worker and has never created any problems, but has a sordid past. It might be a tough call to make. For example, if a decision is made to retain an employee with a DUI on his or her driving record and he or she gets into an accident while driving a company vehicle under the influence, the company could be held liable. There is a lot to be said about second chances and loyalty, but you also need to consider the possibilities.

Before implementing a background check policy, be sure you know and understand: 1) the privacy rights of both current and potential employees and 2) the applicable Federal and State laws as they apply to background checks. For example, an employer that adopts a background check policy must comply with the Fair Credit Reporting Act (FRCA), which requires employers to:

• provide a separate written disclosure to the employee or applicant that a background check will be made;
• secure the written consent from the employee or applicant to perform the background check;
• provide a copy of the report to the employee or
applicant if the employee or applicant is denied
employment based in whole or in part upon the information contained in the report;
• and provide the employee with an adverse action notice and a copy of their legal rights.

All background checks must be done in a fair and consistent manner. That is why it is a good idea to have a written policy that states who will be checked out for what, unless you decide to check out everything about everybody. For example, you might decide that it is only necessary to check the motor vehicle records of drivers and operators or potential drivers and operators and not office personnel or laborers. Or, you might think it is necessary to run a credit check on persons who will handle company finances, but not on laborers. The key is to be consistent and conduct the same checks on persons in similar positions. Additionally, an employer should have strategies in place to address the background information it receives.

Much of the information contained in a background check is personal and confidential. Therefore, it should be kept confidential and shared only with those persons who have a particular need to know it. Lock it up and limit access.

Since screening employees internally can be a time-consuming process, it makes sense to secure the help of someone in the business of helping companies set up and implement screening programs. These companies are easily found on the Internet, and the cost of running a background check is relatively inexpensive (starting at approximately $15) when you consider the potential consequences of not running one. It goes without saying that you should check the screening company’s references first.

Background checks can be a valuable risk management tool for employers in that they can help limit legal liability and prevent or reduce workplace theft, violence and damage to equipment and other property. All this can lead to substantial cost-savings to an organization’s bottom line. Checks also benefit employees by helping to ensure that they have a safe place to work.

George Kennedy is NUCA Vice President of Safety.