Employment Background Checks

Employment Background Checks

An Employment Background Check on prospective employees can assist hiring managers in making informed decisions during the hiring process.

Business owners seek to reduce costs and limit liability with every major decision they make within the business. Some try to save money by skipping over the thought of running an employment background check before making hiring decisions. Unfortunately, not paying for an employment background check before hiring a new employee can cost the business even more in the long run.

Employment background checks provide a variety of benefits for business owners and hiring managers and packages can be customized to fill individual position’s needs ensuring that only the necessary reports are run on each applicant. Some of the reports and benefits of employment background checks are:

1. Criminal Background Checks

Running criminal record reports on prospective employees can help ensure that companies only hire the best quality employees. Background check companies can provide the most recent 7 years of criminal convictions for review. Employers may be concerned about violent behavior, DWI convictions, fraud or embezzlement at a previous employer. Obtaining these reports can provide the hiring manager with a closer look into the personality and history of the applicant and raise red flags or provide peace of mind when someone has a clean criminal history.

Statistics on Criminal Records in the US:

• Nearly 1/3 of adult working-aged people in the US have a record
• Employees with criminal records in sales positions have a 28% higher risk of being terminated for misconduct. (KelloggInsight)
• Homicide is the 3rd leading cause of fatal occupational injury in the US (OSHA)
• Between 1993 and 1999 in the US, an average of 1.7 million violent crimes per year were committed against people who were at work. (Bureau of Labor Statistics Census of Fatal Occupational Injuries) The breakdown is as follows:
  
  • Homicide - 900
  • Rape/Sexual Assault – 36,500
  • Robbery – 70,100
  • Aggravated Assault – 325,000
  • Simple Assault – 1,311,700
• While most workplace homicides are committed by strangers (83%), there is still a significant number (11%) of incidents involving “work associates” in the form of co-workers, former co-workers, customers or clients. (US Dept of Labor, Bureau of Labor Statistics)

2. Driver License Check / Driving Records

Businesses that require employees to use company vehicles including large commercial trucks can benefit from running an employment driving record check and getting a better idea of the applicant’s driving history and even character. Lack of insurance, registration, too many infractions and accidents can be an indicator of an irresponsible person, which can lead to irresponsible behavior in the workplace and behind the wheel of a company vehicle.

Information from the Bureau of Labor Statistics (2016 Census of Fatal Occupational Injuries Report) on workplace driving incidents:

• Transportation incidents are the most common fatal events making up 40% of “workplace injury” events.

• In 2016, fatal injuries among transportation & material moving occupations increased by 7%, the highest since 2007 accounting for more than ¼ of all work-related fatalities.

2016 CDC report from the Center for Motor Vehicle Safety:

• Motor vehicle crashes cost US employers $25 billion dollars annually
  

  • This includes a cost of $671,000 per death

  • Non-fatal injuries cost an average of $65,000 per incident

• From 2003-2014, there were 22,000 work-related motor vehicle deaths in the US

3. Credit Reports

Employment credit reports will not provide a hiring manager with a credit score (FCRA compliance), but it will provide them with an insight into the applicant’s credit history, outstanding balances, collections, and so forth. This is especially helpful when hiring someone that will work with cash, in accounting or finance departments. Along with looking at criminal records for embezzlement charges, credit reports will provide information about the applicant’s sense of responsibility and financial stability. Unfortunately, when people are in desperate financial situations, they can be tempted into stealing or embezzling from their employers.

Some statistics regarding embezzlement within the United States:

55% of cases occurred at companies with fewer than 100 employees 37% of cases were committed by someone with finance/accounting functions 37% of cases involved losses over $500,000 Over a quarter of schemes lasted for more than 5 years

Above statistics from the 2017 HISCOX Embezzlement Study

4. Degree Verification Or Other Education Verification

Resume fraud is unfortunately an increasing concern when it comes to hiring new employees and running full background checks including degree verification or education and credential verification reports has become an important part of the process. Candidates will embellish or lie about qualifications, and while it may take a while for a manger to realize it, it can cost the company countless hours in training, salary and other costs in the long run. Background screening companies have a variety of methods that can be used to confirm these qualifications and will check data bases and make phone calls on the hiring manager’s behalf.

5. Drug Testing

While there are more and more states that allow the use of marijuana, it is still considered illegal under federal law and it is still a concern for businesses. Employee Drug Testing for marijuana and other illegal drugs is an important part of the employment background check process. Businesses can be held liable if employees under the influence cause accidents in the workplace and injure themselves or other employees or customers. Ensuring that you have a drug-free workplace will provide for a safer work environment for everyone around.

Statistics on overall drug users:

Medical costs of an employee that uses drugs is 300% higher, increasing insurance rates (US Dept. of Commerce) Worker’s Comp claims are 5 times more likely to be filed by drug users (IS Dept. of Labor) Roughly 30%-50% of all worker’s compensation claims are related to drug abuse in the workplace (US Dept of Labor) Drug abuse/addiction causes the employee to function at about 67% of capacity. (National Institute on Drug Addiction) Drug abusing employees are 3 times more likely to be tardy and have an absentee rate of 30-35 days per year. (US Dept of Labor)

Prescription drug use is another growing concern for employers because of the following:

1. 65%-85% of injured employees receive narcotic painkillers as part of their workplace injury treatment. (2014 workers Compensation Research Study)
2. Standard drug tests do not test for opioids and other prescription medications & given increased risk of prescription drug abuse, employers are encouraged to expand testing.
3. 23% of American workers have used prescription drugs for non-medical uses. (National Safety Council)

6. Social Security Number Verification

The importance of social security number verifications are to confirm the identity of the person applying for the available position and ensuring that they are not using another person’s social security number. This will assist in confirming that there are no fraud alerts on that social security number as well as help ensure that only people legally allowed to work in the United States are given the opportunity to fill that position. Businesses can be fined for hiring illegal applicants.

Companies are at risk when failing to confirm employment eligibility and may be subject to:

1. Civil fines and/or Criminal penalties (when there is a pattern or practice of violations).
2. Debarment from government contracts

7. Employment Reference Check

Checking applicant’s references, whether personal or previous employment references can be very beneficial in providing the hiring manager with an insight into the applicant’s character and whether they will fit in with their corporate culture. While most people only provide references to people that they believe will give them a glowing recommendation, that is not always the case. It is in those cases that hiring managers have the most to gain from making such phone calls. Background screening companies such as AAA Credit Screening Services will be happy to make those employment reference check phone calls on the hiring manager’s behalf.

8. Address Checks

Sometimes applicants commit crimes in a state or county and then move to another, when they do, they will omit any employment or evidence that they lived in that area from their resumes. Background screening companies can run prior address checks on applicants to gather more information about where a candidate has lived and then run criminal background checks in those cities, counties or states to see if the applicant is trying to hide a previous conviction.

9. Workers Compensation Claims Reports

It is important for businesses, especially those where employees utilize large equipment, or employees doing physical labor to gather information on prospective employees and their prior workers compensation claims. These claims can cost a business a lot of money over time and avoiding accident-prone employees may be a way to reduce the risk of such claims in the future.

Some statistics regarding workers compensation claims are listed below:

$62,3007,000,000 was spent on workers compensation claims in 2014 (National Academy of Social Insurance) Of the $62.3 Billion, only $12.9 billion (20.71%) came from state funds or federal programs (National Academy of Social Insurance) $49.4 billion (79.29%) was paid by private carriers and self-insured employers (National Academy of Social Insurance) Workers Compensation claims are 5 times more likely to be filed by drug users – (US Dept of Labor) Roughly 30% - 50% of all Workers Compensation claims are related to drug abuse in the work place – (US Dept of Labor) According to a 2014 study by the Workers Compensation Research Institute 65% to 85% of injured employees received narcotic painkillers as part of their workplace injury treatment.

The information above provides employers, human resources managers and business owners with insight and statistics into the importance of running full an employment background check on prospective employees. While not everyone with a criminal record is a risky candidate, it is important to avoid violent offenders, applicants with embezzlement convictions or with theft convictions during the hiring process. Companies that do their due diligence before making hiring decisions can help avoid workplace incidents, loss of funds from theft, training and troublesome separation issues when having fired unworthy employees.

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