Getting "In the Know" About Potential Job Candidates
Conducting reference and background checks are a good idea when searching for new employees.

By Janice Schonwetter

Increases in negligent hiring and defamation lawsuits combined with rising employee replacement costs and workplace violence issues are pressuring employers to want to know as much as possible about potential employees. Federal and state legislation balance employers' need to know with employees' right to privacy.

Before You Ask
Pave the way for a smooth and legal process by laying the appropriate foundation prior to conducting reference and background checks. Have a written policy stating when references and background checks will be conducted. Include a statement on your application form notifying potential employees that information provided will be checked and validated.

Notify potential employees of consequences resulting from false, omitted and/or misrepresented information. Consequences can include refusal to hire, or termination. Have a waiver for potential employees to sign authorizing you to conduct reference and background checks. Have documentation available that explains their rights under the Fair Credit Reporting Act.

When to Ask
It is common practice for employers to check references on their top candidates. Background checks are usually reserved for final candidates, frequently done after a contingent offer of employment is made.

What to Ask
Employers should only seek information pertinent to the position and duties the applicant will be performing. If the applicant is not required to drive a car on company business, then a driving record check is not warranted.
People may be reluctant to provide reference information on a former employee. Reluctance comes from fear of litigation related to defamation of character and obstruction of gainful employment claims. Some states, including Kansas and Missouri, have passed "employer immunity" laws protecting employers from such claims. Despite this protection, previous employers will generally only provide confirmation of employment dates, title, pay level and wage history, and job description and duties. It is less likely for employers to provide performance evaluation information or information regarding the employee's reason for leaving and eligibility for rehire.

Information obtained through background checks include:

• Identity verification via Social Security number checks
  
• Current and previous addresses
  
• Verification of past employment
  
• Verification of education
  
• Criminal and civil records
  
• Credit and bankruptcy records
  
• Military service records

Who to Ask
Reference and background information can be collected from various sources, including former employers, former supervisors, friends and court records. Employers can conduct research themselves or hire a third party. When hiring a third party, look for a provider who does court record research in addition to database research. Reliance on database research alone may result in inaccurate or outdated information.

A recent MSNBC report stated, "Employers and volunteer organizations are increasingly turning to national commercial database searches provided by private firms to ferret out potential convicts from their ranks.  ... But experts say the nationwide tallies are often full of holes, and contain as few as 70 percent of all felony conviction records, leading in turn to a false sense of security."

This plethora of incomplete information results from various reporting timelines and requirements of the nation's 3,300 county courts and 92 federal districts throughout the United States. Records researched using onsite courthouse searches will have more current information than database searches. Many states update record databases only once a year, so recent records may not be available in the report requested.

What to Do With the Information
Awareness of basic rules of the game will ensure appropriate use of reference and background check information. Treat all information as confidential. This information should not be relied on as the only factor in making a hiring decision. The Equal Employment Opportunity Commission (EEOC) views reliance on military records and criminal records as having a potential discriminatory impact due to disproportionate exclusion of minorities and other protected groups.

Keep in mind that arrests do not necessarily lead to convictions. Employers may exclude a candidate on a record of criminal conviction only if it is related to duties on the job. For example, if an applicant had been convicted of embezzlement or theft, an employer could disqualify that person for jobs with access to money or other corporate assets.

If adverse action is taken as a result of a credit report finding, the applicant is entitled to notice of the adverse action and the identification of the reporting agency.

Employers should make a good faith effort to explore the background of potential employees, being mindful of employees' right to privacy. Taking a "buyer beware" approach can help protect your investment, your assets and current employees as you add new employees.

Janice Schonwetter is president of HR by Design, which partners with small to medium-size businesses, non-profit organizations and government agencies to optimize employee performance and improve organization effectiveness. You can contact her at or (913) 484-5954.