The life cycle of a background check is often in conflict with a recruiter’s time constraints to fill a position.  This blog explores how recruiters can help speed up the process.

Part of the on boarding process for most in-house recruiters is the completion of the pre-employment background check.On the other hand, it is mission critical that employers exercise due diligence in their hiring. If an employer hires someone who turns out to be dangerous, unfit or unqualified, and some harm occurs where it was foreseeable that a bad hire could cause damage, then the firm can be on the hook for a negligent hiring lawsuit, not to mention all of the other costs, workplace problems, and negative publicity associated with a bad hire. Of course, a bad hire does not reflect well on a recruiter either.

The challenge for recruiters  is that they are typically under intense time pressure to complete the hiring process quickly and to get the new person started. In a perfect world, a recruiter would like to be able to go to a website such as www.Should-I-Hire-This-Person-or-Not.com to get an immediate “thumbs up” or “thumbs down.” However, no such site exists because much of the data needed to do a background check is simply not gathered ahead of time and data based in such a neat and tidy way. There is not even a comprehensive national criminal database that reveals an accurate criminal history. Most private employers do not have access to the FBI criminal database, and even the FBI database is subject to numerous sources of errors.

As a result, background checks are conducted by actually calling up schools and past employers and going to courthouses. A background check will typically take three days, and that is assuming the universe is cooperating. Of course, there will be delays if an employer has gone out of business or refuses to call back, or a school is closed for a holiday or requires a release or check sent by mail. If a high school degree needs to be verified, there are almost always substantial delays since each high school does things completely differently.  If the applcaint has a GED, the delays can be very long.  If an international background check is requested, there can be a substantial delay.  Further delays can occur if there are potential criminal record matches, and the court clerk delays producing the file that would help determine whether the case can even be reported under complex federal and state rules.

The end result is that the  life cycle of a background check is often in conflict with a recruiter’s time constraints to fill a position. The good news is that a recruiter can be pro-active in speeding up background checks in several ways.

Creating an Efficient Background Check Timeline

1. Recruiters must understand the process can be delayed if screening firms are sent incomplete information, or supplied with forms that are illegible or incomplete.

For example, screening firms often face difficulty in deciphering an applicant’s past employers or social security number. Since a screening firm is not expected to read hieroglyphics or be a “mind reader,” the screening firm has to contact the recruiter to clarify the information. Some screening firms will make their best guess and if they are wrong, the report is delayed even further, proving the old adage that “no good deed goes unpunished.”

Recruiters who review all applications for completeness, legibility and accuracy with the candidates before sending the applications to a screening firm will find their work is completed much faster.

2. An in-house recruiter needs to communicate with hiring managers to eliminate unrealistic expectations. A hiring manager may not understand, for example, that criminal records are searched at each relevant courthouse, or that delays can occur if there is a potential match and the court needs to bring files from storage.

Hiring managers must also be advised that employment and education verifications can be delayed for a number of reasons, such as schools that are on vacation or that require a check or release to be mailed, or employers that are closed, merged or refuse to cooperate. If there is a delay in receiving a completed screening report, the recruiter should examine the source of the delay.

3. If a recruiter is working with a screening firm that has an online ordering system, the process is considerably faster. Not only does this ensure accuracy, which makes the process faster, but it also avoids delays caused by sending a request to a screening firm and waiting for the firm to do manual data entry.

4. Finally, there are times when a recruiter should determine that even though the screening firm has not been successful in obtaining all of the information, enough data is available to make a hiring decision. This typically happens in the area of verifying previous employment. When conducting employment verifications, often times the earliest employment is the most difficult to obtain. However, it may also be the least relevant. If the applicant, for example, worked in a fast food restaurant six years ago after getting out of school and the fast food place will not call back, then there may be no reason to delay the hiring decision, especially if the screening firm has obtained the most recent, and presumably more relevant, job verifications.

5.  It is also important to understand there is a difference between screening and investigation.  Screening is a high volume process, typically done at a low price point so large numbers of people can be reviewed, typically within 3-4 business days.  Investigation on the other hand is much more intense and in-depth endeavor, where each applicant is the subject of increased focus.  However, it much more expensive.   A recruiter or employer cannot reasonably expect to receive investigative level services at screening prices. 

Experienced recruiters understand that background checks are not only a critical part of the hiring process, but are a great deal more complicated than merely putting a name in a database. A competent background checking process requires specialized knowledge, resources and experience. This is particularly true since employment screening is a highly regulated area. The best way to speed up the process is to understand exactly what is involved in facilitating the smooth flow of accurate data.

New rules cornering address discrepancies in consumer credit reports that could help to prevent identity theft go into effect November 1, 2008.  Beyond potentially creating some additional hoops to jump through,  the new rules are not likely as a practical matter to have a great deal of impact on employers and may even help employers avoid hiring someone operating with a stolen identification.

The new rules were written by various federal agencies as a result of provisions in the 2003 Fair and Accurate Credit Transactions Act of 2003 (FACTA), designed to combat identity theft when “Red Flags” were raised in credit reports.  Although employers are affected, the rules go well beyond employment and also regulate financial institutions and creditors.

Since the regulations are new, it is not yet entirely clear how they will be implemented.  However, employers would be impacted if they request a credit report from a background screening firm as part of a background report.  The credit reports are supplied to background firms by one of the three national credit bureaus, which are Experian, Trans Union or Equifax.

It also important to keep in mind that for employment purposes, these regulations only apply to information from a national credit bureau, which will mean as a practical matter it is limited to only those applicants where an employer requests a credit report.  Other types of background reports, such as criminal records, driving records, past employment or educational verification are not impacted.

If the credit bureau finds an address discrepancy which raises a “Red Flag,” the employer would receive a notice from the credit bureaus.  This could occur if the applicant submits an address that the credit bureaus do not find in their records, or it appears that there is a “substantial difference” between the applicant’s address and what the credit bureau has on file.

An employer that utilizes credit reports will need to establish a policy on how it will verify the applicant’s identity through reasonable means, such as confirming information directly with the applicant, using third party sources or utilizing other materials, such as employment application forms.

Once the address and identity of the applicant is clarified, an employer also under certain circumstances must then send back the newly confirmed address to the credit bureaus.  Although there will need to be some clarification in the near future on how this will work exactly,  it would appear reasonable that the background firm providing the credit report may be able to act as the go-between for the employer and the national credit bureau in the administration of this rule.

The important point for employers is that the address discrepancy notices are not likely to be a significant burden on employers or Human Resources professionals. Employers would expect to receive such notices primarily in two situations; First, if an applicant has moved to a new address that has not been picked up by credit bureaus, such a notice may be generated.  Secondly, an employer may get a notice where there is a case of identity theft with an applicant impersonating someone else.  In that event, employers will benefit from the new rules.

Once the actual operations of the regulations become clearer, ESR will provide its clients with a sample policy and will assist clients if and when such a notice is received. ESR will also provide training to all clients that request credit reports as part of their background checking protocol.

In the September, 2008 issue of the ESR Newsletter, readers were alerted to two bills in California that would have affected background checks.  Both bills were vetoed by Governor Schwarzenegger.

• AB 2918 would have severely restricted the use of employment credit reports.
• AB 3063 would have amended California law on the usage of criminal records.

For a copy of the Governor’s veto message, please contact Jared Callahan at 415-898-0044 or by e-mail at jcallahan@esrcheck.com

Four years ago, ESR reported an investigation by the Dallas News concerning inadequacies in the statewide criminal database maintained by the Texas Department of Public Safety (TDPS).  That database is widely use by law enforcement, employers and consumers, among others, and is also used to perform screenings on teachers, volunteers and caregivers that work with children, the sick and the frail.  The original article can be found in the ESR newsletter archives at: http://www.esrcheck.com/newsletter/archives/March_2005.php#T2. 

In that article, ESR reported that according to the newspaper article, the Texas database was used over 3 million times a year, but it only had 69 percent of the complete criminal histories records for 2002.

The Dallas News revisited the story in August 2008 and found, essentially, that nothing had changed. For 2006, the database still only had 69% of the state’s criminal history. The story noted that only 106 out of Texas’ 254 counties reported electronically, and even then there appeared to be glitches or communication issues with various state law enforcement agencies.  Other problems had to do with keeping trained personnel or officials in smaller jurisdictions forgetting to report the status of a case. 

This story underscores a common issue for employers performing background checks.  Searches of criminal databases can be problematic.  ESR recommends that employers keep the following in mind when utilizing criminal databases;

1.  Database searches available to private employers are NOT FBI database searches. FBI records are only available to certain employers or industries where Congress or a state has granted access.  Searches offered by background firms are drawn from government data that is commercially available or has been made public.

2.  Although multi-jurisdictional and statewide databases searches can be extremely valuable because they cover a wide area and access millions of records, employers are well-advised to use them primarily as a research tool or lead-generator and not as a substitute for a hands-on search at the county level under any circumstances (or the functional equivalent of a county level search). The best use is to indicate additional places to search in case a record is found in a jurisdiction that was not searched at the county court level.

3.  In addition, not all states have a database that is available to employers.  In some instances, the databases that are available have limited information.  Therefore, the value of these searches may be very limited in some states. An employer should carefully review what information is available in their state and not merely depend upon a database search.

4.  Databases in each state are compiled from a number of sources.  There are a number of reasons that database information may not be accurate or complete. Because of the nature of databases, the appearance of a person’s name on a database is not an indication the person is criminal any more than the absence of a name shows he/she is not a criminal. Any positive match MUST be verified by reviewing the actual court records. Any lack of a match is not the same as a person being “cleared.” However, a database is a valuable tool in helping employers cover a wider area and know where to search for more information.

5.  The search is based upon matching the name and the date of birth in order to eliminate computer matches that are not applicable. Note: In some states, there is no, or limited, date of birth information.  The database description will indicate where the records do not contain a date of birth, which means a search of that state will have little or no value.

6.  The best practice is for all possible “hits” to be reconfirmed at the county court level to insure whether information is accurate, complete and up to date at the time it is reported, per FCRA Section 613. Also, keep in mind that a criminal record should not be used to automatically disqualify an applicant, without taking into account the EEOC rules as to what is a job-related criminal offense.

There are currently two bills that have passed the state legislature in California that are awaiting a decision by the Governor.  AB 2918 radically changes the use of credit reports for employment purposes.  According to the California Legislative Counsel, “This bill would prohibit the user of a consumer credit report, with the exception of certain financial institutions, from obtaining a consumer credit report for employment purposes unless the information is (1) substantially job related, meaning that the information in the consumer credit report relates to the position for which the person who is the subject of the report is being evaluated because the position has one or more specified characteristics, is a highly compensated or managerial one, or (2) required by law to be disclosed to, or obtained by, the user of the report.”  There is no definition as to what “highly compensated or managerial positions” means.  This bill, if signed into law by the Governor, represents a growing trend to limit the use of credit reports for employment purposes.

It is important to note that an employment credit report does NOT contain a credit score, since that is not a valid predictor of job performance.  However, it does contain a credit history, such as late payments and amounts due to financial institutions.  In numerous articles, ESR has advised employers to approach credit reports with caution.  However, this bill may result in outlawing employers from running credit reports on bookkeepers or others that handle money or have access to assets.

A second bill that is currently at the Governor’s desk awaiting his approval or veto is AB 3063. According to the California Legislative Counsel, this law would clarify existing California law dealing with the technical rules on the use of criminal records by employers.  Currently, the regulations of the Department of Fair Employment and Housing prohibit certain criminal matters from being considered by employers.  This law would place those same restrictions in the Labor Code. This bill would have no impact on ESR clients since ESR already utilizes the criteria of the Department of Fair Employment and Housing Commission in determining if a criminal record should be reported.

ESR will immediately send a special newsletter to its clients if these bills are signed into law that will explain the practical impact.