Post-offer, pre-employment screening is critical to your organization’s ability to reduce its total cost of risk. One of the pillars of a comprehensive employee screening program is utilizing background checks. It is your first line of defense against many serious risks, including workplace violence, fraud, theft, and abuse. When used properly and in compliance with the law, background checks can serve as part of an employer’s holistic risk-management program to help mitigate potential Workers’ Compensation claims.
What to Know About Background Checks
The use of criminal background checks when hiring new employees is permitted as long as an employer is in compliance with federal law under the U.S. Equal Employment Opportunity Commission (EEOC). In addition, when employers run background checks through a third-party vendor providing this service, they must comply with the Fair Credit Reporting Act (FCRA). Prior to conducting a background check, an employer should obtain written consent from the candidate. A background check must be performed post offer and prior to placing an employee on the job. Just as with pre-employment drug tests and Post-Offer Medical Questionnaires (POMQs), a background check can be a part of the contingent post-offer process. Any decisions taken on the part of the employer as a result of the background check must be aligned with what the data indicates. Should the background check return information indicating an applicant has a prior criminal history, an employer must determine if and how the applicant’s criminal history relates to the risks and responsibilities of the job. According to the EEOC, an employer should consider the nature of the crime, the time that has passed since the criminal conduct occurred, and the nature of the job.
It’s important to note that an employer cannot use background information to discriminate against applicants and employees. An employer must apply the same standard to everyone. It’s illegal to check the background of applicants and employees when that decision to run the check is based on a person’s race, national origin, color, sex, religion, and other protected classes. For example, asking only people of a certain race about their financial histories or criminal records is discrimination. Known as disparate treatment, an employer’s decision to reject a job applicant based on racial or ethnic stereotypes about criminality – rather than actual qualifications and suitability for the position – is unlawful.1
Background Checks and Workers’ Compensation
Hiring an employee with a tarnished background certainly does not mean they will engage in negative behaviors while on the job. However, organizations should consider that the risks of fraud, theft, and abuse still exist in the context of Workers’ Compensation. Employers should view and use background checks as a tool that can indicate a pattern of behavior that could pose an array of risks to the enterprise, including the risk that more frequent and more severe Workers’ Compensation claims may be filed.
Prescient National provides each of our insureds with a dedicated risk management consultant to offer general advice on what the data shows in relation to background checks and Workers’ Comp and to help understand the value proposition in implementing measures such as background checks, POMQs, and drug testing. Of course, it’s also critical to consult with an attorney when implementing a company’s hiring program to ensure compliance with state and federal laws.
1 EEOC
