Tag Archives: Recruiting

Staffing Vendors, Co-employment, Background Checks, and Lawsuits

By Lester S. Rosen, President of ESR

(First published on RecruitingTrends.com)

As the recession begins to slowly turn around, employers are naturally cautious about increasing the size of the workforce until it becomes clear that hiring additional full-time workers is justified. The solution traditionally has been to hire through staffing agencies so that an employer had flexibility to adjust to the ups and downs of the recovery. 

However, the notion that just because workers are on someone else’s payroll that they are not a businesses’ responsibility or problem is simply not true.

It is clear, in fact, that when a business hires temporary workers, the business assumes much of the same liability as when workers are hired directly. Although staffing agencies still have duties to pay wages and handle such items as reporting to appropriate agencies and workers compensation insurance, there are a host of potential employment law liabilities that are still the responsibility of the employer.

An employer can still be sued for sexual harassment, or for having a hostile workplace, or for discrimination regardless of whether the worker gets paid by the company, or paid through a staffing firm. That is because the temporary worker is still under the control and direction of the workplace. This falls under the legal doctrine of co-employment, where both the staffing vendor and the business have duties and obligations. 

For employers, the scope of their co-employment responsibility can even extend to liability for negligent hiring and negligent retention. The law is absolutely clear that if a temporary employee harms a member of the public or a co-worker, the employer can be just as liable as if the person were on the employer’s payroll.  Many employers have found out the hard way that unscreened or inadequately workers from a Professional Employer Organization (PEO) or staffing vendor can also cause damage. A business can be liable if, in the exercise of reasonable care, the business should have known that a temporary worker was dangerous, unqualified, or otherwise unfit for employment. An employer has an absolute obligation to exercise due diligence not only in whom they hire on payroll, but in whom they allow on premises to perform work.

No employer would dream of walking down the street and handing the keys to the business to a total stranger, yet many employers across America essentially do exactly that every day when engaging the services of vendors and temporary workers.

Part of the problem is that the word “screening” is used differently by staffing vendors and employers.  A staffing vendor will “screen” applicants to determine whether a candidate’s resume is a match for the job description.  For employers concerned with due diligence, and risk-management, “screening” means having a background check performed to determine whether the person is safe and qualified. 

Of course, in the event of a lawsuit where an employer is sued, the employer would likely turn around and blame the staffing vendor or PEO. However, the employer will still need to justify its own due diligence in how it selected and supervised the staffing vendor.

The PEO or staffing firm would likely blame the employer for failure to specify what was required. Although the eventual outcomes will depend upon specific facts, employers and staffing vendors can avoid these difficulties in the first place by clearly addressing who has what duties.

These are some of the issues that should be clarified when an employer and staffing vendor work together: 

  • Which party is going to perform the background check — the staffing vendor or the employer?
  • What is the screening protocol to be used? Ideally, employers should require a staffing vendor to utilize the same criteria used for their own W-2 employees.
  • What Background Screening firm will be used? The employer needs to ensure that the staffing vendor utilizes a background screening agency that is experienced and qualified for the assignment and follows best practices, such as not offshoring data, not using home based operators, and not substituting cheap database checks instead of real criminal searches.
  • Whose responsibility is it to actually review the Background Screening report?  There have been cases where staffing firms have found negative information but no one read the report or acted on it.  The negative information typically comes to light when the employer decides to make the worker permanent, and performs its own background check, only to discover that a crime or resume fraud was missed or not acted upon.
  • In the event derogatorily or negative information is found, how are decisions to be made?  The use of automated pass/fail criteria by the staffing vendor are increasingly becoming a potential Equal Employment Opportunity Commission (EEOC) issue, since it can have the affect of discrimination against protected classes of applicants.  Another solution is to send anything of a negative nature to the business for a final decision on whether they want that person on the premises.  Some staffing vendors, however, take the position that since it is their employee, it is their decision.  The critical point is to work out the protocol in advance.
  • Do the consent and disclosure forms for background checks reflect the roles of the parties?  Under the federal Fair Credit Reporting Act (FCRA), a business can request that the background release extend to the business so it can review the background report. However the background release must also clarify that the staffing vendor is the employer of record.
  • Who is going to pay for the background checks? 
  • Who is going to send out the required adverse action notices or conduct a re-investigation? 

The bottom-line: staffing vendors can avoid a great deal of difficulty if these issues are addressed and documented upfront so that everyone is clear on who has what responsibly when it comes to safe hiring.

For more information on background checks staffing vendors, co-employment, background checks, and lawsuits, please visit Employment Screening Resources (ESR) at http://www.esrcheck.com.

Source:

http://www.recruitingtrends.com/staffing-vendors-co-employment-background-checks-and-lawsuits

Staffing firm supplies embezzler with felony fraud conviction but not liable to Employer

In a recent state court case that concerned a fact pattern familiar to background screening specialist, a local office of a national staffing firm supplied an employer with a bookkeeper that turned out to have criminal record for felony fraud and who misrepresented her educational background.  The worker embezzled $138,350.  However, since the employer did not specify that the staffing firm should do a background check, and the staffing firm never claimed that they would do one, the employer’s claims were dismissed.  Continue reading

Employment screening blog on applicant lies in top ten list in 2009 on major recruiting web site

A leading recruiting web site, RecruitingBlogs , has released its list of the ten most read blogs posted on its site for 2009.  RecruitingBlogs  is a network that is home to over 20,000 recruiters, HR Professionals and recruiting vendors. 

Employment Screening Resources is pleased to note that a blog posted by its president, Lester Rosen, was on the top ten list. 

The blog dealt with the six biggest applicant lies.  The blog was posted at: http://www.recruitingblogs.com/profiles/blogs/the-six-biggest-applicant-lies 

For the entire list, see:  http://www.recruitingblogs.com/forum/topics/top-read-posts-of-2009-on 

ESR will continue to update its blog at leat twice weekly to fulfill is mission of keeping employers, Human Resources and Security professionals  advised of trends, best practices and legal development.  The purpose of the ESR blog is to be the one place employers need to go to keep on top of critical safe hiring issues.  

Although ESR will at times comment on stories in the news that are relevant, ESR does not simply rehash new stories.  The majority of content on the ESR blog is original content written for employers, Human Resources and Security professionals.  Between the blogs, the whitepapers and resources, the ESR web site is a one source encyclopedia for hiring information.  ESR looks forward to continuing to serve its clients in 2010.

Why Background Firms should not contact an applicant directly

Some employers or recruiters want background firms to contact an applicant directly if there is a need to obtain additional information or to clarify information from an applicant.  If this has ever crossed your mind as an employer or recruiter, you might want to reconsider. 

Employment Screening Resources (ESR) generally recommends against having background firms getting in the middle of that special relationship between the Recruiter and the Applicant.  It creates confusion, causes delays, and brings a background screening firm into discussions with the applicant  who may not even realize that a third party is involved.

From many years of experience, ESR knows that background checks actually go much faster where the recruiter exclusively manages the direct applicant relationship and obtains additional information when needed. 

This issue of applicant contact can come up in a number of ways.

First, if a recruiter is submitting faxed orders instead of using the ESR online solutions, recruiters must understand the process can be delayed if orders are sent that are illegible or incomplete. For example, screening firms often face difficulty in deciphering an applicants handwriting as to past employers or a Social Security Number. An eight and a three can easily look alike.  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 report is completed much faster.

Another example is an incomplete employment verification because the past employer has moved, merged, or gone out of business.  If the recruiter still needs that to be verified, then someone needs to contact the applicant and ask for things such as W-2’s, or names of past supervisors.  There are some recruiters who ask their background firm to do this, even though it is the recruiter that has most knowledge about the applicant and has direct contact.

There are a number of complications that arise if the screening firm attempts to contact the applicant. 

1.  The applicant does not know the background firm, and is naturally reluctant to supply a Social Security Number or date of birth to a stranger over the phone, or send pay stubs to someone they do not know.  That typically means the applicant will normally call the recruiter first anyway to find out what the situation is all about, which, of course, delays the screening process further.

2. The background firm often has to engage in phone tag, requiring back and forth before the screening firm can connect with the applicant.  Since the applicant has no relationship with the screening firm, an applicant does not always realize it is important to call back, especially if the applicant is looking at several different job offers.  On the other hand, if a recruiter is in hot pursuit of an applicant, or the applicant is focused on getting the job, it is likely that the recruiter will have a great deal less difficulty getting in touch with him/her to obtain the additional information or clarification. 

3.  The third issue is tracking.  The screening firm needs to track the status of the additional calls to the applicants and to deal with multiple applicants instead of a single point of contact.  Recruiters presumably already have an ATS or some other system to keep tabs on the progress of each job and each finalist (since typically only a finalist is getting screened). 

4.  The last and most important issue is when a screening firm calls the applicant, an applicant may now believe that the background firm is somehow involved in the hiring decision.  There have been applicants who have wanted to continue selling themselves to a background firm’s clerical employee, whose only mission was to obtain some missing information and who knows nothing about the job.  Or, if the applicant somehow feels that background employee did not give them the attention he or she deserved, the applicant may be left with a negative impression of the potential employer or complain about the contact.

For these reasons, many background firms typically prefer not to get themselves in the middle of the relationship between the recruiter and the applicant.

Job Applicants and Online Employee Background Screening Software

A recent post on an HR blog concerned an applicant who was directed online to web-based background screening software to fill out information, finding it took 80 minutes. Not surprisingly, this applicant was not pleased with the amount of time and effort it took to fill out on online background form. Such dissatisfaction can actually lead to qualified applicants going elsewhere. See: http://www.risesmart.com/risesmart/blog/feeling-dissected-by-pre-employment-screening-software/

Employment Screening Resources (ESR)  believes that an applicant’s time is valuable and the online system for a background check should respect the applicant and reflect the value the employer places upon recruiting qualified candidates. The ESR system, for example, only takes a few minutes of an applicant’s time to fill out online. It only asks those questions that are strictly necessary for the screening an employer wants and does not waste time by asking for information that is not needed for the screening involved. It also transfers information already put into an Applicant Tracking System (ATS), if the ATS is able to send it. Also, all work is done in the US in a professional environment, and not sent offshore or into private homes for processing, so applicant privacy and data protection is much greater. Applicants that have had a negative experience with using online background screening systems to fill out their own data may want to suggest that the employer look at other systems, such as the ESR system at: http://www.esrcheck.com/Applicant_Generated_Reports.php

Calling unlisted former employers for employment reference

From the ESR mailbox: I have heard that it is against the law to check any reference other than those provided by the applicant. For example, if an applicant had a job that was not listed on the resume or application, can a background firm or employer still contact that person?

Answer: We are not aware of any legal prohibition against contacting “unlisted” individuals to perform reference checks as part of the employment process. The consent that is given to employers or screening firms to verify past employment or qualifications is not limited to just those individuals an applicant chooses to list or reveal

However, the unlisted” person should only be contacted if the person has knowledge relevant to employment and should only be asked job related questions. Questions for example, about legal off-duty conduct would not be proper. Furthermore, any questions should certainly be non-discriminatory and not an invasion of personal privacy. Typically, a background firm is asked to contact listed employers. There are circumstances however where the person in charge of hiring decides to go a deeper because they are hiring for an important position. The hiring manager hiring may contact the listed references, and then ask who else has they can call that has knowledge about the applicant. This is known as a developed reference. The purpose is to develop the names of other individuals who know the applicant and to get a candid assessment from someone who perhaps has not been “prepared” to give a reference. The topic of unlisted employment may also come up if there are unexplained gaps in employment, and the employer wants to dig deeper. Unlisted jobs may also appear on automated employment verification databases.

One important caveat-”a background firm will typically not contact a current employer without specific permission in order to avoid causing any problems on the current job if the new job doe not work out.

Employers with questions about background checks are free to send them to Jared Callahan at jcallahan@ESRcheck.com . For more information generally, see www.ESRcheck.com

ESR is closed for the holidays on November 26 and 27. Happy Thanksgiving.

Background Checks and Recruiters

A leading national Recruiting Blog by noted national recruiting and training expert John Vlastelica recently featured the role that a screening firm such as ESR can play for recruiters.  The blog, Recruiting Tool Box, is a management consulting and training firm that partners with HR and recruiting leaders to build and deploy the right recruiting strategies, plans, processes, systems, tools and training.  It has great tools and information for recruiters.  See:  http://www.recruitingtoolbox.com/ 

The following is an excerpt from  the blog for the Recruiting Tool Box : 

Considering a new background check vendor?
I completed a custom benchmarking study 18 months ago for a client, and asked 20 major employers about their background check policies, processes, standards, and plans for the future. 50% said they were relatively unhappy with their current vendor.

There’s a lot of firms out there. I was networking with people from a firm (ESR) based in California yesterday, and I asked them some questions about the differences between the firms in their space. (Their President was one of my favorite speakers at the Kennedy show I was at a few weeks ago, and we’re bringing him to Seattle to speak to us on Sept 16; watch www.smaseattle.org for details in the coming weeks).

They pointed me to a 22 question checklist that highlights key questions you should ask any background check vendor you’re considering. I thought it was an objective list, so thought I’d share it.

http://www.esrcheck.com/diligence-audit-current-provider.php

Are you pleased with your background check vendor? What makes them work well – or not so well – for you?

p.s. Note: I don’t have any commission relationships with any vendors of any kind. I certainly have opinions about firms and people in our space, but my opinions are not influenced by commissions or kickbacks.

See:  http://recruitingtoolbox.blogspot.com/2009/06/background-check-vendor-checklist.html

Employment Screening Expert Lester Rosen To Present At National Recruiting Conference in Chicago

Employment Screening Resources,  a leading international employment screening background checking firm headquartered in the San Francisco area, announced that its president, Lester Rosen, will be presenting before the combined KennedyInfo/Onrec 2009 Recruiting Conference and Expo in Chicago, Illinois on November 3, 2009. 

This national recruiting conference brings together online recruiting leaders and productivity solution providers from around the globe to push the boundaries of online recruitment solutions.  See: http://www.onrec.com/conferences/031109/schedule.html

Mr. Rosen will be addressing, “Don’t Play Recruiting Russian Roulette: Hot Issues, Trends and Current Developments in Background Check.”  

 “Ensuring that candidates are qualified and bona fide are critical element of the recruiting process,” commented Rosen. “I am very pleased to have the opportunity to participate in this prestigious conference and to share information on the latest trends and developments relating to due diligence in hiring to assist recruiters in avoiding hiring lawsuits just waiting to happen.” 

Mr. Rosen, who is also an attorney, is a nationally recognized, expert, on employments screening background checks.  He is a writer and speaker on the Fair Credit Reporting Act (FCRA), pre-employment screening, and safe hiring issues. In addition, Mr. Rosen is the author of the first comprehensive book on employment screening background checks, “The Safe Hiring Manual Complete Guide to Keeping Criminals, Imposters and Terrorists Out of Your Workplace.” He also wrote, “The Safe Hiring Audit.”

 Mr. Rosen’s speaking appearances have included numerous national and statewide conferences.   He has testified in the California, Florida  and Arkansas Superior Court as an expert witness on issues surrounding safe hiring and due diligence. Mr. Rosen was the chairperson of the steering committee that founded the National Association of Professional Background Screeners (NAPBS), the professional trade organization for the screening industry, and served as the first co-chairman in 2004. 

More information about Employment Screening Resources can be found at www.ESRcheck.com

Background Check Expert Lester Rosen to Present at Seattle Conference on Social Networking sites

Employment Screening Resources  a leading international employment screening background checking firm headquartered in the San Francisco area, announced that its president, Lester Rosen, will be presenting before the prestigious Staffing Management Association (SMA) of Seattle on September 16, 2009. 

SMA’s mission is to present practical and relevant information by bringing in top-notch recruiting and retention experts.  See: http://www.emaseattle.org/events.shtml 

Mr. Rosen will be addressing, Landmines, Pitfalls and Potential Law Suits – Understanding the Risks of Using Search Engines and Social Networking Sites to Screen Candidates. 

“am very pleased to have opportunity to discus this cutting edge topic with to-notch staffing professionals in such a critical economic area as Seattle,” commented Rosen. “There is evidence that recruiters and hiring managers are utilizing social network sites to make hiring decisions without taking into account the potential liabilities that employers can face if done incorrectly or unfairly.  This talk is geared to starting a dialogue on the potential landmines that may be encountered if not done correctly.”

Mr. Rosen will review a major new survey that demonstrates what percentage  of employers use these sites, which sites they use,  how often they are used to NOT hire someone, as well as the most frequently seen issues that turn-off employers. 

Mr. Rosen, who is also an attorney, is a nationally recognized, expert, on employments screening background checks.  He is a writer and speaker on the Fair Credit Reporting Act (FCRA), pre-employment screening, and safe hiring issues. In addition, Mr. Rosen is the author of the first comprehensive book on employment screening, The Safe Hiring Manual Complete Guide to Keeping Criminals, Imposters and Terrorists Out of Your Workplace,a 500 pages plus guide that acts as the text book for the screening industry. He also wrote, “The Safe Hiring Audit.”

 Mr. Rosen’s speaking appearances have included numerous national and statewide conferences.  He has testified in the California, Florida  and Arkansas Superior Court as an expert witness on issues surrounding safe hiring and due diligence. Mr. Rosen was the chairperson of the steering committee that founded the National Association of Professional Background Screeners (NAPBS), the professional trade organization for the screening industry, and served as the first co-chairman in 2004.

More information about Employment Screening Resources can be found at www.ESRcheck.com

The Rush to Source Candidates from Internet and Social Networking Sites

A new article by Employment Screening Resources President Lester Rosen has appeared in the Recruiting  Trends blog, sponsored by Kennedy Information for the purpose of providing leading edge insights and strategies for the recruiting professional.  The blog offers articles by thought leaders and experts in the area of talent management and recruiting.

The article is titled: “The Rush to Source Candidates from Internet and Social Networking Sites – Let’s Slow Down and Think About This for a Minute.”

The article examines pitfalls and legal risk in the use of the internet for sourcing and screening. See: http://www.recruitingtrends.com/article/ART635215

Mr. Rosen, who is as an attorney at law, is a member of the Editorial Board and frequently presents at Kennedy Information Recruiting Conferences.