Elements of a Background Investigation
For your review, we have supplied a summary of subjects considered in a thorough background investigation. Please contact our office if your in need of conducting a background investigation.
Overview
This article discusses background investigations and reference checks, which are employers' principal means of securing information about potential hires from sources other than the applicants themselves. Topics covered include reasons for screening, current trends in screening, types of screening and challenges for HR professionals, including complying with federal and state laws.
Background
Background investigations and reference checks are two different approaches to screening applicants for job openings. A background investigation generally involves determining whether an applicant may be unqualified for a position due to a record of criminal conviction, motor vehicle violations, poor credit history, or misrepresentation regarding education or work history. A reference check generally involves contacting applicants' former employers, supervisors, co-workers, educators and athletic coaches to verify previous employment and to obtain information about the individual's knowledge, skills, abilities (KSAs) and character.
There are numerous reasons employers should perform at least some level of background investigation or reference check with respect to every new hire. The extent of the inquiry depends on the nature of the business, the job at issue and perceptions of risk.
Human resource professionals face many practical challenges and potential legal pitfalls in conducting background investigations and reference checks, regardless of whether they are done in-house or by an outside vendor. The use of criminal background checks and credit histories has received legislative scrutiny because of its potential discriminatory impact. In April 2012, new guidelines were released by the Equal Employment Opportunity Commission (EEOC) on the use of criminal background checks in hiring decisions. See, Close up on Screening.
The challenges vary depending on the type and depth of inquiry, as well as the federal, state and international laws that may apply. Also, several U.S. cities and counties have laws that prohibit an employer's questioning of a candidate's criminal history on employment applications, commonly known as "ban the box." See Ban-the-Box Movement Goes Viral.
Finally, human resource professionals responsible for pre-employment screening have access to various tools to help them research and select background-screening partners; making those selections and ensuring compliance can also be challenging. See, What should an employer look for when selecting a background check vendor?
Reasons to Conduct
There are many reasons employers conduct appropriate levels of screening for prospective employees through a background investigation, a reference check or both. See Five Legal Lessons for Screening Millennials and Background Checking-The Use of Credit Background Checks in Hiring Decisions.
Avoiding injury
A major reason to conduct background and reference checks is to avoid harm or legal liability of various types to the employer or to others—for example, harm to:
Litigation defense
Defense of legal claims—negligent hiring and retention, as examples—is a compelling reason to conduct in-depth criminal records searches of job applicants. A multilevel jurisdictional criminal records search can be strong evidence that the employer exercised due care in hiring.
Maximize productivity
Hire the best and reject the rest, the saying goes. Typically, past performance is a strong indicator of future performance and can reveal an individual's professionalism, productivity, job skills and interpersonal communication abilities. A reference check helps distinguish between a true high flier and a mere poser.
Trends
A variety of developments and trends in society at large are reflected in trends associated with background screening and reference checks.
Frequency of use
Surveys conducted by SHRM and other organizations reveal a trend toward greater use of background investigations and reference checks in employment. This trend is driven by several factors, including:
Types of findings
According to a 2014 CareerBuilder.com survey,1 industries that appear to encounter fraudulent resumes most often are:
Automation
In addition to phone-based reference interviews, screening firms and employers are using technology to improve the results of reference checks. Some screening firms offer online solutions that enable a broad set of reference sources to respond quickly and confidentially. Others believe online reference checking does not enable a hiring manager or screening professional to ask probing questions in an interactive fashion. Though this is true, requester always have the option to call and ask follow-up questions about candidates after reading the initial report. See Better Hiring through Technology.
Globalization
Pre-employment screening is becoming more complex as organizations are looking more to overseas job markets. It is now common for a job applicant to have been raised, educated, and worked in several different countries. As a result, employers are carefully vetting candidates for entry-level jobs, senior management and positions in between. Employers recognize that candidate screening at all levels is more complex and vital to organizational well-being. Multinational employers must be careful to obey local laws concerning background checks.
Internet fraud (aka "phishing")
Employers should be leery of websites claiming that they will provide instant access to information after opening and activating an account using a credit card number. Websites that do not provide contact information allowing for the ability to converse with a representative should be considered suspect. See Preventing Hacker Attacks.
Nontraditional approaches
In 2015, a SHRM survey found that overall, 43% of organizations used public social media profiles or online searching to screen job candidates. See, Using Social Media for Talent Acquisition – Recruitment and Screening.
Using information gleaned from the Internet is a controversial approach. On the one hand, it would be hard to defend an organization that did not avail itself of free and publicly available information that might have prevented a hiring disaster. On the other hand, employers using such means of background checking must recognize the limitations of the medium. See Social Media Use in Hiring: Assessing the Risks.
Practical Challenges
Human resource professionals face a variety of practical challenges when conducting background investigations and reference checks. With respect to background investigations, the challenges include:
Aspects of Background Investigation
"Background investigation" is a generic term that may encompass research into one or more types of information about a job candidate. Employers should inquire about different aspects of an individual's background in different situations.
Timing
Conducting a background check can take 48 hours or less—or it may take as long as a week. If there is great pressure to fill a position, the better course of action is to run background checks on the two or three finalists rather than on a single candidate who has received a contingent offer. Investigating only the final candidate may seem to be most cost-effective; however, that approach runs the risk of having to rescind an offer and start from square one if the results are unsatisfactory. See Can an employer conduct a background check before extending an offer of employment?
Having a clean background check on file for a new hire may be sufficient in the short run, but many employers conduct post-hire or reoccurring background screening at regular intervals for certain job categories or employment situations.
Eligibility for employment in the United States
Although not a background check in the commonly understood sense, the process of verifying an individual's eligibility to work in the United States is a type of employee screening that should be addressed in this context. Employers must complete a Form I-9 for all newly hired employees to verify their identity and authorization to work in the United States. See Verifying Eligibility to Work in the U.S. under Federal and State Laws.
The types of acceptable identity and employment authorization documents employers can accept from new hires change periodically. The current document is Form I-9, Employment Eligibility Verification (PDF). See also Handbook for Employers: Guidance for Completing Form I-9 (PDF).
The use of E-Verify—the U.S. government's online system for verifying employment eligibility—is voluntary for most employers, although an executive order requires all federal contractors to use the system to confirm the legal status of their employees or risk losing their government contracts. See E-Verify Best Practices for Federal Contractors.
Some state governments have also passed laws requiring employers to use E-Verify. Review your state laws to determine compliance.
In development is an online Form I-9, which would help employers ensure the information gathered from new employees is accurate and input correctly. See USCIS Developing 'Smart' I-9 Form to Catch Errors, and 'Smart' I-9 Form Comes up Short.
Employment history
Some people include false employment history on their resumes. Employers frequently discover lies embellishing job responsibilities. Other frequent falsehoods involve skill set, dates of employment, previous employers, and job titles and roles.
Education history
Listing academic degrees never obtained or educational institutions never attended are also common resume falsehoods. One high-profile case involved the admissions dean for the Massachusetts Institute of Technology, who resigned after it came to light that she had claimed three degrees she had not actually earned. Similarly, a former CEO of RadioShack resigned after executives discovered he had falsely claimed to have two degrees from a college in California.
Criminal history
Increased use of criminal background checks by employers to prescreen job applicants stems from the growth of claims alleging that an employer was negligent in hiring or retaining an employee who subsequently engaged in workplace violence or some other act that resulted in harm to a person (e.g., sexual assault) or property (e.g., theft). Many organizations also perform criminal background checks on current employees, either as a matter of course or prior to a promotion, transfer or other change in the terms and conditions of employment.
Companies that use criminal background checks should examine and understand the EEOC's 2012 guidance on criminal background checks; an evaluation of current practices in light of this guidance will help HR professionals assist managers in an individualized assessment of each record. See Enforcement Guidance on the Consideration of Arrest and Conviction Records in Employment Decisions Under Title VII and Questions and Answers About the EEOC's Enforcement Guidance on the Consideration of Arrest and Conviction Records in Employment Decisions Under Title VII.
Overview
This article discusses background investigations and reference checks, which are employers' principal means of securing information about potential hires from sources other than the applicants themselves. Topics covered include reasons for screening, current trends in screening, types of screening and challenges for HR professionals, including complying with federal and state laws.
Background
Background investigations and reference checks are two different approaches to screening applicants for job openings. A background investigation generally involves determining whether an applicant may be unqualified for a position due to a record of criminal conviction, motor vehicle violations, poor credit history, or misrepresentation regarding education or work history. A reference check generally involves contacting applicants' former employers, supervisors, co-workers, educators and athletic coaches to verify previous employment and to obtain information about the individual's knowledge, skills, abilities (KSAs) and character.
There are numerous reasons employers should perform at least some level of background investigation or reference check with respect to every new hire. The extent of the inquiry depends on the nature of the business, the job at issue and perceptions of risk.
Human resource professionals face many practical challenges and potential legal pitfalls in conducting background investigations and reference checks, regardless of whether they are done in-house or by an outside vendor. The use of criminal background checks and credit histories has received legislative scrutiny because of its potential discriminatory impact. In April 2012, new guidelines were released by the Equal Employment Opportunity Commission (EEOC) on the use of criminal background checks in hiring decisions. See, Close up on Screening.
The challenges vary depending on the type and depth of inquiry, as well as the federal, state and international laws that may apply. Also, several U.S. cities and counties have laws that prohibit an employer's questioning of a candidate's criminal history on employment applications, commonly known as "ban the box." See Ban-the-Box Movement Goes Viral.
Finally, human resource professionals responsible for pre-employment screening have access to various tools to help them research and select background-screening partners; making those selections and ensuring compliance can also be challenging. See, What should an employer look for when selecting a background check vendor?
Reasons to Conduct
There are many reasons employers conduct appropriate levels of screening for prospective employees through a background investigation, a reference check or both. See Five Legal Lessons for Screening Millennials and Background Checking-The Use of Credit Background Checks in Hiring Decisions.
Avoiding injury
A major reason to conduct background and reference checks is to avoid harm or legal liability of various types to the employer or to others—for example, harm to:
- The employer's business through financial loss or image and reputation issues.
- Other employees by sexual harassment or workplace violence.
- The organization's customers by, for example, sexual assault on business premises.
- The public by negligent driving.
Litigation defense
Defense of legal claims—negligent hiring and retention, as examples—is a compelling reason to conduct in-depth criminal records searches of job applicants. A multilevel jurisdictional criminal records search can be strong evidence that the employer exercised due care in hiring.
Maximize productivity
Hire the best and reject the rest, the saying goes. Typically, past performance is a strong indicator of future performance and can reveal an individual's professionalism, productivity, job skills and interpersonal communication abilities. A reference check helps distinguish between a true high flier and a mere poser.
Trends
A variety of developments and trends in society at large are reflected in trends associated with background screening and reference checks.
Frequency of use
Surveys conducted by SHRM and other organizations reveal a trend toward greater use of background investigations and reference checks in employment. This trend is driven by several factors, including:
- Security issues in a post-Sept. 11 world.
- New legislation, particularly in the area of immigration law enforcement.
- Technological advances that make background investigations faster and more economical.
- Increased awareness of the various risks of failure to conduct adequate background checks.
- A rise in the willingness of applicants to misrepresent their credentials.
- Increasing competition among applicants due to the dearth of new jobs in a post-recession environment.
Types of findings
According to a 2014 CareerBuilder.com survey,1 industries that appear to encounter fraudulent resumes most often are:
- Financial services (73%).
- Leisure & Hospitality (71%).
- Health Care (63%).
- Information technology (63%).
- Retail (59%).
Automation
In addition to phone-based reference interviews, screening firms and employers are using technology to improve the results of reference checks. Some screening firms offer online solutions that enable a broad set of reference sources to respond quickly and confidentially. Others believe online reference checking does not enable a hiring manager or screening professional to ask probing questions in an interactive fashion. Though this is true, requester always have the option to call and ask follow-up questions about candidates after reading the initial report. See Better Hiring through Technology.
Globalization
Pre-employment screening is becoming more complex as organizations are looking more to overseas job markets. It is now common for a job applicant to have been raised, educated, and worked in several different countries. As a result, employers are carefully vetting candidates for entry-level jobs, senior management and positions in between. Employers recognize that candidate screening at all levels is more complex and vital to organizational well-being. Multinational employers must be careful to obey local laws concerning background checks.
Internet fraud (aka "phishing")
Employers should be leery of websites claiming that they will provide instant access to information after opening and activating an account using a credit card number. Websites that do not provide contact information allowing for the ability to converse with a representative should be considered suspect. See Preventing Hacker Attacks.
Nontraditional approaches
In 2015, a SHRM survey found that overall, 43% of organizations used public social media profiles or online searching to screen job candidates. See, Using Social Media for Talent Acquisition – Recruitment and Screening.
Using information gleaned from the Internet is a controversial approach. On the one hand, it would be hard to defend an organization that did not avail itself of free and publicly available information that might have prevented a hiring disaster. On the other hand, employers using such means of background checking must recognize the limitations of the medium. See Social Media Use in Hiring: Assessing the Risks.
Practical Challenges
Human resource professionals face a variety of practical challenges when conducting background investigations and reference checks. With respect to background investigations, the challenges include:
- Obtaining the individual's consent. See FCRA Authorization to Obtain a Consumer Report and Background Check: Minor Parental Consent.
- Selecting a vendor. See Background Investigations: What Should an Employer look for when Selecting a Background Check Vendor.
- Having limited access to criminal records, and mistaken identity. See Search and Verify.
- Obtaining cooperation of third parties.
- Obtaining enough—but not too much—information.
- Obtaining reliable information.
- Creating a record of the background-checking process.
- Evaluating the information obtained in a nondiscriminatory fashion. See More Employers Letting Candidates Explain Conviction Records.
- Retaining background-checking records for the time required by law.
Aspects of Background Investigation
"Background investigation" is a generic term that may encompass research into one or more types of information about a job candidate. Employers should inquire about different aspects of an individual's background in different situations.
Timing
Conducting a background check can take 48 hours or less—or it may take as long as a week. If there is great pressure to fill a position, the better course of action is to run background checks on the two or three finalists rather than on a single candidate who has received a contingent offer. Investigating only the final candidate may seem to be most cost-effective; however, that approach runs the risk of having to rescind an offer and start from square one if the results are unsatisfactory. See Can an employer conduct a background check before extending an offer of employment?
Having a clean background check on file for a new hire may be sufficient in the short run, but many employers conduct post-hire or reoccurring background screening at regular intervals for certain job categories or employment situations.
Eligibility for employment in the United States
Although not a background check in the commonly understood sense, the process of verifying an individual's eligibility to work in the United States is a type of employee screening that should be addressed in this context. Employers must complete a Form I-9 for all newly hired employees to verify their identity and authorization to work in the United States. See Verifying Eligibility to Work in the U.S. under Federal and State Laws.
The types of acceptable identity and employment authorization documents employers can accept from new hires change periodically. The current document is Form I-9, Employment Eligibility Verification (PDF). See also Handbook for Employers: Guidance for Completing Form I-9 (PDF).
The use of E-Verify—the U.S. government's online system for verifying employment eligibility—is voluntary for most employers, although an executive order requires all federal contractors to use the system to confirm the legal status of their employees or risk losing their government contracts. See E-Verify Best Practices for Federal Contractors.
Some state governments have also passed laws requiring employers to use E-Verify. Review your state laws to determine compliance.
In development is an online Form I-9, which would help employers ensure the information gathered from new employees is accurate and input correctly. See USCIS Developing 'Smart' I-9 Form to Catch Errors, and 'Smart' I-9 Form Comes up Short.
Employment history
Some people include false employment history on their resumes. Employers frequently discover lies embellishing job responsibilities. Other frequent falsehoods involve skill set, dates of employment, previous employers, and job titles and roles.
Education history
Listing academic degrees never obtained or educational institutions never attended are also common resume falsehoods. One high-profile case involved the admissions dean for the Massachusetts Institute of Technology, who resigned after it came to light that she had claimed three degrees she had not actually earned. Similarly, a former CEO of RadioShack resigned after executives discovered he had falsely claimed to have two degrees from a college in California.
Criminal history
Increased use of criminal background checks by employers to prescreen job applicants stems from the growth of claims alleging that an employer was negligent in hiring or retaining an employee who subsequently engaged in workplace violence or some other act that resulted in harm to a person (e.g., sexual assault) or property (e.g., theft). Many organizations also perform criminal background checks on current employees, either as a matter of course or prior to a promotion, transfer or other change in the terms and conditions of employment.
Companies that use criminal background checks should examine and understand the EEOC's 2012 guidance on criminal background checks; an evaluation of current practices in light of this guidance will help HR professionals assist managers in an individualized assessment of each record. See Enforcement Guidance on the Consideration of Arrest and Conviction Records in Employment Decisions Under Title VII and Questions and Answers About the EEOC's Enforcement Guidance on the Consideration of Arrest and Conviction Records in Employment Decisions Under Title VII.