Background Checks: Cheap Insurance

02/26/07

As every HR person knows, doing trench work early in the hiring process saves you loads of pain later on. That’s especially true when it comes to looking into the backgrounds of potential hires.

Mike Coffey, of Texas-based Coffey Consulting, cites a recent case in which a male nurse’s aide in a Texas nursing home raped a sixty-five-year-old, partially paralyzed patient. It turns out the man had been fired by another nursing home for hitting a patient. Guilty of negligent hiring, the nursing home was ordered to pay $4.65 million.

Coffey, who conducts background checks and investigations for clients nationwide, is blunt: “The failure to obtain readily available information about an individual’s past performance and behavior is evidence of a failure to perform due diligence in the hiring process.” In other words, not doing checks on people who harm others could make you a target for lawsuits.

Not surprisingly, Coffey thinks employers should perform a check on every potential employee. It’ll help you keep potentially violent employees out of the workplace, he believes, as well as reduce turnover and lower theft losses.

Better than Reference Checks
Background checks offer yet another advantage: You have a better chance of getting truthful, informative information about a person’s work history.

That’s because the company doing a background check is subject to the terms of the Fair Credit Reporting Act (FCRA) and is considered a “consumer reporting agency.” Employers, says Coffey, “can safely provide reasons for terminating former employees to consumer reporting agencies without fear of lawsuits as long as the information is given without ‘malice or willful intent to injure.’”

The FCRA requires you to get permission from a candidate before running a check. If it turns up information that leads to a decision not to hire, you must share the report with the applicant. (Note: Other FCRA provisions and state laws may apply to you—check with your attorney.)

What to Check:
An investigator will look into some or all of these areas in a typical check.
Previous employment. The immunity mentioned above makes it much easier, says Coffey, to “identify exaggerated claims about an applicant’s background and experience.” You can also get a salary history, reasons for termination, and eligibility for rehire.

Criminal history. “This is must have information,” maintains Coffey. Unfortunately, there’s no nationwide database of information. The most accurate method of getting information is to send someone to check court records at the county level. While it’s ok to consider convictions when assessing candidates, Coffey cautions against holding arrests against an applicant: “The EEOC has specific guidelines for determining when they may be taken into account without it being considered discriminatory.

Cumulative Sanctions List. This is a list of people who have been debarred, suspended, or excluded from participating in federal healthcare programs.

Credit reports. “An applicant’s credit history,” says Coffey, “may be relevant to their fitness for a position, especially for those handling cash or who will assume discretionary fiduciary responsibility.”

Identity research. Here’s where the investigator can really earn his fee. Coffey: “People with checkered pasts often seek to hide or obscure negative information by altering their identities.” They may, for instance, switch their first and middle names, or use an incorrect birth date or Social Security number.

A good investigator will identify all names associated with a particular Social Security number, places a person has lived, and driver’s license information. “Often,” says Coffey, “this research will yield aliases under which an individual may have previously worked or received a criminal conviction.”

What Does It CostA typical background check costs Coffey’s clients anywhere from $50 to $150. “That might seem like a lot,” he says, “but it’s less than two days’ wages. It’s really a small price to pay if it helps you keep violent people off the payroll and avoid negligent hiring suits.”