Employment Verifications: What You Don't Say Can Hurt You

When conducting employment verifications we've all gotten used to the fact that many past employers will not willingly give adverse information about their former employees. Many will confirm employment, give you the dates of employment and starting and ending title/responsibilities. However, after that information is shared what else you get varies widely. Oftentimes, significant adverse information can be withheld.

Why? Employers are worried about getting sued by the former employee. In today's society, the prevailing logic is "why risk litigation, let the next person find out for themselves". Well, here's something that will make you cringe. In the last few years, past employers are being held accountable for what they do not say when it leads to actions by the former employee that could have been prevented had the prospective employer been informed.

Our very own Rob Thomson recently wrote what I consider to be one of the best articles I have ever read on this topic, Employment Verifications: Less May No Longer Be More! Check it out. It's worth the read and particularly relevant when you see a story I found today about a California police officer who was fired from his job in 2004 for Sexual Harassment. It turns out that his past employer (another police force) covered up prior activity including Sexual Harassment that would have preventing the officer from getting the job.

I'm not sure if one police force can sue another, but I would imagine that the victim of the harassment might have a nice suit against both employers in this case.

The fact is, this issue of what you should and shouldn't say in an employment verification is extremely dicey for employers. It is a double edge sword of which employers have no guidance on what is appropriate to reveal and what is not. Until definitive best practices are established, employers are going to be left to their own best judgement. Should be interesting.

employeescreenIQ Releases Latest Newsletter

We've just released the latest edition of our Quarterly Newsletter, The Verifier. Please feel free to check it out.

http://theverifier.net/index.php

Employers Access Credit Reports

We see so many articles these days slamming employers and grossly overstating the misuse of employment credit reports, so I was pleased to see a well-balanced, informative view about from a 30,000 ft. level of the process. See article below published in the Detroit Free Press.

It may not seem fair, but that company you're talking to about a new job can find out when you opened your Visa and Nordstrom charge accounts and whether you're keeping up with payments. Whether it's their business is up to you.
That kind of information is detailed in your credit report. Besides the date on which you opened what credit account, the balance you owe and how often you pay, it includes your full name, address, former addresses and names, date of birth and Social Security number and public records such as tax liens, judgments and bankruptcies.

Read More

Curiosity Doesn't Always Kill The Cat

A few weeks ago, I wrote about applicants who claim to have degrees or diplomas but really don’t. We check, report back to our clients. They make a decision. However, not all cases are that clear cut.

Recently, a candidate said he had a degree, but the school couldn’t verify until they spoke to the applicant directly. Unusual, but not unheard of. Less than 48 hours later, we received a call from someone who said he was a school employee. This person verified the candidate’s degree. Sounds simple enough. Wrap it up and send it back to our client, right?

However, the area code on this phone call was different than the area code of the school. Our researcher’s curiosity was peaked at this point, and called back the school. They stated they still cannot release information, nor had they heard from the applicant!

Our work wasn't done though. The department the person who called us confirming the applicant’s degree. He didn’t work there. The Registrar’s Office? Not there either. At this point, we shared our findings with our client.

While this verification made for a pleasant blog piece, we’re happier about the performance of our researcher. She noticed something looked out of place and acted on her instincts. She made more than a few follow up attempts to obtain information, clarify what she was told, and ascertain the quality of the information she was given.

Our client was more than pleased. Could another company have done the same thing we did? Perhaps. But processes and best practices are very, very important to us. All of our verifications are done within 75 feet of my desk. We do this work in-house and train our own staff, so we can assure our clients they’re receiving a high quality report. We’re proud of our work and like to think our efforts pay off on searches like these.

Guidelines for Use of Employment Credit Reports in Ohio

As we've discussed a number of times in the past, there are a number of restrictions, recommendations, guidelines, etc. about how to use a credit report when making a hiring decision. We found these guidelines on the Ohio Civil Rights Newsletter from October. They are worth the read if you currently utilize or are considering utilizing credit reports for your hiring decisions in the state of Ohio. The following paragraph taken from the newsletter give you the gist:

In the light of the discriminatory impact on minority job applicants, employers should be extremely cautious in their use of consumer credit reports as a tool for screening job applicants. The policy guidance, as approved, makes clear that when an applicant is denied employment on the basis of his or her consumer credit report, the employer should have valid, objective proof--preferably in the form of a job validation study--that its use of these reports is not only related to the job in question, but also based upon a business necessity. More

Take a Look Around Your Workplace

Over the years, we have done enough employment and education verifications that few things surprise us. We have seen some interesting trends develop over time though. Applicants often fudge, obfuscate, or outright lie about the details of their employment history. Dates of employment, salary, title, their reason for leaving. Something does not quite match up. But applicants really don’t invent employment history. We don’t see applicants who claimed to work for IBM for 3 years, when in reality they never set foot in the door.

However, education verifications are a different story. We commonly see applicants who claim education credentials they did not earn. Master’s degrees. Bachelor’s. High School diplomas. Think of the notable stories you have seen in news over the years. Football coaches, CEO’s, College Deans. How many were about their employment history, and how many were about the educational background?

Approximately 2% of the time, we find candidates who did not earn the degree or diploma they claimed to. It’s across the board too. Companies who think their applicants are different? We actually see a higher percentage of fraudulent claims for clients where a particular education level is a requirement of the position. 2% sounds like a small figure. Is it? Look around your organization. How many people work for your company?

Hiring a Celebrity: Don't Forget the Background Check

As posted on Xtra Cheezhead earlier this week.

Okay, so Michael Vick, former quarterback of the Atlanta Falcons sends you his resume to become your next Latex Salesman (I finally get to use a Seinfeld reference). Let’s say you have been living under a rock for the last few years and you don’t know who he is. You decide to conduct a background check. What will you find? That all depends on where you look. Up until last week, the only charges filed against Vick related to his involvement in a dog fighting ring were in Federal Court. He has pleaded guilty, so let’s say for the sake of argument that the Federal Court has appropriately updated their system. In order to find this conviction, you would have had to conduct a Federal District Criminal Search. A County Court Record Search would not identify this particular conviction. Now, separate charges have since been filed in Surrey County, VA. A conviction has not occurred so while you might be able to find the charges by performing a County Criminal Record Search in Surry County, you would just see a pending case. In most states you can use a pending case in the hiring decision. In some states, you cannot (another topic for another post).

The view the rest of this post, please click on the link below.
http://www.cheezhead.com/xtra/2007/10/01/celebrity-hires-provide-lessons-in-background-checks/

Visa Press Release on Credit Scores

Okay. I owe the readers of this blog an apology for playing it safe and sitting on the sidelines on this one. Credit card titan Visa issued a press release on September 13th titled "Americans Unaware That Employers Can Legally Refuse to Hire Job Applicants With Low Credit Scores" The release points out that many employers are making their hiring decisions based on a credit score. I strongly disagree with this statement. Our experience is that employers stay as far away from credit scores as they can. I wasn't even sure if it was legal or permissible to use a credit score in the hiring decision so I took a week to discuss this topic with the folks at Experian and with some employment attorneys before snapping off an uneducated response. I have learned that while it is permissible, it is most likely ill-advised. The most common explanation for their opinions is the potential for a disparate impact on minorities. Not to mention that a bad credit score can occur for so many reasons unrelated to personal responsibility including divorce, critical healthcare issues, etc.

I did test the waters by responding to an ERE post that published the release going as far as calling out the folks at Visa for not doing their homework. I stand by this assertion. They should have clarified that employers are increasingly reviewing a credit report on prospective employees, not necessarily credit scores. That said, I think that the release is interesting. I just think Visa should have spent a bit more time fine tuning the information.

Checking In On Your Current Employees: Recurring Background Screening

I hate to blatantly copy a post I've made elsewhere, but I'm rather impressed with myself (or at least the topic) on this one I recently posted on Xtra Cheezhead. See below.

Okay, so you’ve conducted a background check on a prospective employee and decide that they meet your standards. You extend an offer and that person accepts the job and becomes a valuable member of your team. Now that the person has been hired, most companies would not be inclined to consider further background checks. Well the times, they are a-changing.

While the concept of follow up background checks has been around for a long time and employed by security conscious organizations, you are seeing this emerging trend creep into the consciousness of your average business. It even has a shiny new name that many are using: “Infinity Screening”. I’m a big advocate of this practice because it allows you to evaluate your current employees for adverse information throughout their employment. An easy example is conducting annual Motor Vehicle Record check on those that drive company cars.

Please click on the link below to view the rest of this post:
http://www.cheezhead.com/xtra/2007/09/07/post-employment-screening/

MLB Umpires Union Blocks Background Checks

Now here's a classic Union vs. Employer showdown on a very public stage that we can all relate to as chronicled in the New York Times article Baseball and Umpires Clash Over Background Checks. Major League Baseball (MLB) is reacting to the latest National Basketball Association (NBA) referee gambling scandal and thinks it might do well to monitor the backgrounds of it's umpires. It appears that they have conducted background checks before umpires were hired, but have not been monitoring them throughout their employment. It also seems clear from this article that the scope of the background check did not include a credit report and that the consent that was granted at the time of hiring did not allow for post hire screening.

Now MLB is going back to the umpires and asking them to grant consent to perform further checks. In my opinion they are attempting look for any red flags that might suggest trouble. Rather than trying to understand what MLB is looking for and how they might use such information, the union appears to be angling for concessions completely unrelated to this topic. They've already threatened retaliation to a process that legally cannot take place without their consent. This should be interesting.

For more information on credit reports, click on the link below.
http://www.theverifier.net/verifier_13/page2.php

Federal Criminal Record Background Checks

When considering a thorough criminal background check, employers should consider checking their candidates for criminal convictions in the Federal Courts. While conducting a criminal record search at the county level is a best practice, this method will not reveal any convictions that have been prosected at the Federal level. And true, relative to crimes prosecuted locally, only a miniscule number of crimes are prosecuted federally. However, if you seek to cast the widest net possible, this search is recommened. The most common crimes found at this level are white-collar in nature or those criminal activities that take place across state lines. Much like the county courts, our Federal judicial system is segmented into different regional jurisdictions. These jurisdictions are referred to are "districts". Federal criminal record searches are conducted by checking the federal districts where your applicant has lived over the past 7-10 years.

While everyone can benefit from this type of search, it is typically utilized for higher level executives, employees with access to company financial records and, or those in sensitive industries such as financial institutions. If you are considering this type of search, understand that there is one drawback. Federal records are often name-only matches that require a great deal of follow-up in order to conclusively determine that they belong to the subject of a search. This process can take up to two weeks to determine, and can no doubt delay your hiring decision. This is a drawback to be considered, but shouldn't eliminate this important facet of a background check if the information found can save you from making a blind hiring decision.

More information about Federal Criminal Records checks can be found at www.employeescreen.com/preservices.asp

Interview with Experian's Maxine Sweet

I recently conducted an interview with Maxine Sweet, Vice President of Public Education at Experian. The interview was geared towards getting the low-down on the often misunderstood topic of Credit Reports and their use in hiring decisions. The article was published in our quarterly newsletter, The Verifier.

Hopefully, this sheds some light on what a credit check is and how it can be used to make an informed hiring decision.

Social Security Number Trace (Address History Searches)

First, let’s dispel a commonly held misconception: A Social Security Number Trace is not conducted through the Social Security Administration, nor is it a service that can definitively indicate if the subject of your search is “legal”.

The Social Security Number Trace should really be referred to as an “Address History Search”. This important screening tool provides a roadmap to a thorough and effective background check by revealing the addresses at which your applicant has been presumed to live and every name they have been presumed to use over at least the past seven to ten years. Completing this search gives you the greatest opportunity to commence a thorough, extensive criminal record search.

Social Security Number Traces are offered through a variety of sources. The most common sources are the credit bureaus. Companies such as Experian and TransUnion aggregate address and name history by identifying information reported by lending institutions such as banks, credit companies, utilities companies, cable operators, etc. If you have applied for any type of credit, chances are the credit bureaus will have a record of that. Of course when you apply for credit, you provide your name, address and social security number. This information is passed on to the credit bureaus and Voila! A credit event has been recorded. Another source for traces is through other commercially aggregated databases. Like all databases, some are better than others. Some will include aggregate information from credit bureaus as well as additional sources such as magazine subscription databases, customer affinity programs (e.g. frequent flier accounts), grocery accounts, etc.

We have conducted exhaustive testing of both credit bureau and aggregate database traces. While it would be irresponsible to suggest that these tests or any others draw a conclusive result, our preference is for Experian traces on the credit bureau side and a database called “PASST”.

Clients often ask, “What source is the best?” Unfortunately, there is no such thing as a best method of identifying address history. Information can vary from database to database, so you choose the one you are most comfortable with. One thing is certain, there is not a single source that can guarantee the information it provides is 100% accurate. For instance, let’s say that you lived with a friend for a period of time and never applied for credit while there. There’s nothing to tie you to that location. Therefore, a Social Security Number Trace will not reveal that address. Another issue occurs when tracing a number that belongs to an individual who has never applied for credit. Most commonly, this occurs with younger individuals. Most often, the number will not trace. The same logic applies to an individual who has recently moved to the United States. Even though they may be in this country lawfully, they have not established a history of credit. The lack of information on an address history search does not mean that the individual is illegal. It simply means that the credit bureau has not aggregated any data on the individual.

There are two definitive reasons as to why a Social Security Number Trace cannot be conducted through the Social Security Administration (SSA). First, the SSA does not maintain such address history information for commercial purposes. Secondly, only an employer can contact the SSA for information and only after the individual has become an employee. Contacting the SSA is something that an employer can do to determine Right to Work Eligibility Status, which applies to the I-9 process.

Since we are performing an in-depth dissection of the Social Security Number Trace, it is important to address some of the inherent “flaws” contained within. However also noteworthy is that none of these “flaws” or “anomalies” whether contemplated individually or together make a compelling argument for foregoing this search. Bear in mind that the data contained in a trace is done so by human beings over the course of time. The old saying of “garbage in, garbage out” applies. Since the information for each credit event must have been keyed in at some point by hand, it is inevitable that entry errors will occur, such as incorrect spelling of an individual’s name, the wrong address or a transposed social security number. This can and does happen and often, it is difficult to pinpoint when or where the error happened. The other commonly “flawed” information relates to the date of birth contained on the Social Security Number Trace. The best way to explain this anomaly is by posing a question. When was the last time you were asked to provide your birth date when you applied for credit? Even if you were asked, what is the likelihood that you were asked to prove it? This is the most commonly misreported information on a trace and we often tell clients to disregard the date provided. The SSN Trace is simply not a reliable resource to validate date of birth. Ultimately, the date of birth has no bearing on the information that is being used in the trace anyway.

Now that we have dealt with the “what” and “who” let’s consider the “why”. What can an employer do with this information? A trace can be conducted for only a few dollars. However, the low cost doesn’t diminish its importance. As mentioned earlier, the trace will provide a roadmap for conducting a thorough criminal record search. Failing to perform this search virtually guarantees that your goal of an effective and reliable background check will not be accomplished. Another useful aspect of the SSN Trace, when conducted through certain providers, is related to security. As an example, Experian offers a “Fraud Shield”. This feature cross references the social security number with more than 20 different databases to ensure that the number hasn’t been used in conjunction with reported identity theft, that the number does not belong to a deceased person, that the number was assigned during an appropriate birth date range, etc. Obviously, if an alert is offered in this regard, a background check should be taken with a grain of salt and more information must be sought from the applicant.

The address history and alias names identified by a SSN Trace represent an inexpensive and objective roadmap for conducting criminal history research. Without this objective resource, you must rely on your applicant to tell you where to search for criminal history, which can lead to obvious consequences. A dishonest applicant could easily conceal the fact that they moved 3 years ago to get away from a felony conviction. While the precise content of the SSN Trace cannot be considered 100% conclusive, no criminal background check should be considered complete without referencing this important tool.

Instant Background Checks

Believe it or not, there are some relevant and thorough portions of a background check that can be conducted instantly.  Typically, these are searches where there is a direct line to the source of information that has been thoroughly vetted for accuracy and depth of information.  Such searches include Motor Vehicle Records, Address History Search, Homeland Security Searches (often referred to as Terrorist Watch lists), Office of Inspector General Searches and Credit Reports.  However, you should be weary when you see things such as "instant criminal background checks".  For the only instant source for a criminal record search is a database product which is cheap and is fast, but is neither thorough or comprehensive.  The gold standard for thorough, accurate and complete criminal record searches is still the time tested practice of on-site research in the county (ies) where a person has lived, worked or gone to school over the past 7-10 years.  While it might take more time (average of 1-4 days), there is no substitute or shortcut that has proven to be more effective. 

Eventually maybe there will be one consolidated source for all criminal record searches, but there is also a day when we all might choose to fly our own personal vehicles to work rather than drive. Right now the date for both of these endeavors is in the yet to be determined future.  Until then, beware of the instant criminal background check.

International Background Checks

As more organizations participate in the global economy, international background checks are becoming increasingly important.  However, as opposed to conducting background checks in the United States, the rules and methods for doing so are not clearly defined.  For instance, the type of information varies from country to country.  By and large, the most common types of overseas checks are limited to Criminal Records Searches, Employment and Education Verifications and Terrorist Watch List Searches.  However the depth and detail of information can differ greatly by country. 

Further, there is no international version of the Fair Credit Reporting Act (FCRA) that governs the use of background checks.  Organizations can become Safe Harbor Certified with the U.S. Department of Commerce.  Such a certification mandates some general best practices when it comes to applicant authorizations and the transmission of private information across international borders.  In general, it is best to afford overseas applicants with the same rights as domestic applicants when no clear regulation has been established (i.e. dispute resolution).

Lastly, since every country operates differently it is important to know where to access information, what information is needed to locate records and what you can expect in terms of results, turnaround time and cooperation. 

A good screening partner should be able to help you with direction and recommendations on all of the above.  Know of any?

National Employment Screening Services

Just because you are local, doesn't mean your employment screening firm must be.  While local is always nice in terms of familiarity is concerned, capabilities are far more important.  Just because your local screening firm might screen a lot of people in your particular area, doesn't mean they have the expertise, capacity or capability to conduct background checks for your applicant's that may live or have lived outside of your area. 

One of the best practices in conducting an effective screening program is to check every county where you applicant has resided, worked or gone to school and every name they have used over the past seven years.  So, it is imperative to identify and select a provider who can cover the entire country.  It is also important to select a provider who has a basic sense of the federal, state and local laws that govern the use of background checks.  In most cases, the Fair Credit Reporting Act will pre-empt state of local laws, but not always.  So conducting a check in California for instance is completely different than conducting a check in Ohio.

In addition to client references, you might ask the following questions of a potential provider that seek to highlight experience in this regard:

• Do you have a national client base?



• Do you have national coverage? (duh?, sorry for the obvious one but you never know)



• If you do have national coverage, do you regularly cover all areas of the country?



• Please highlight some of the differences or challenges you run into in different areas or regions of the country (beware of the provider that tells you none).

Credit and Background Checks

Many companies utilize credit checks as part of their pre-employment screening programs.  While credit checks are often confusing, they can shed light on an applicant's personal responsibility.  It is important for employers to bear in mind the following when contemplating this type of search.  First the basics, you must have a signed authorization from the applicant before you can check their credit.  Second, you want to make sure that credit is not the only thing that you look at to determine an applicant's suitability for employment.  Other valuable pieces of a background check can include a criminal record search, employment verifications, education verifications, etc.  Next, you want to make sure that you evaluate how poor credit might affect your candidate's ability to work in the position they seek.  Credit checks are great for executive level applicants, those in the financial sector or those and, or those with access to large amounts of money.  For others, the extension might not be so obvious. 

Next is understanding the different between an Employment Credit Report and a Consumer Credit Report.  There are many differences that require far greater explanation, but the for the purposes of this discussion let's point out a couple of the highlights.  A Consumer Credit report contains a credit score (which cannot be used as part of the hiring decision) and account numbers (which an employer shouldn't need to make a hiring decision).  Running them also counts against the applicant's credit score, unlike the Employment Credit Report.  For simplification purposes, this makes the Employment Credit Report the preferable of the two. 

Lastly, there are three primary credit bureaus in the US.  They are Experian, Equifax and TransUnion.  Information can vary from bureau to bureau, but as far as determining the best, all three have their strengths and weaknesses.

Now comes the hard part.  Making employment decisions based on the results of a credit report.  And that my friends is something that can and should be dealt with on a unique employer by employer basis.

Costs of Pre-Employment Background Checks

The most common question asked by potential customers is "what is the cost of doing a background check"?  The answer is never easy.  But let's start with a few basics.  First and foremost, the price charged for a background check is most commonly attributed to anticipated or demonstrated volume and the types of services ordered.  Volume meaning the more background checks you order, the better the price.  Services ordered can vary.  Some clients just do a basic criminal check while others order criminal checks, employment verifications, etc. 

Now comes the more challenging part of the equation: the apples to apples comparison.  The most common differentiating factor in the nebulous term "background check" is how criminal convictions are sought: County Criminal Records, State Repositories (if and where available) and commercial databases.  The best method for obtaining thorough and accurate search is to conduct an in-person county criminal record search wherever your applicant has resided, worked or gone to school over at least the last seven years.  The county level is where the overwhelming majority of convictions that matter to employers occur and give you the best chance of finding information.  This method usually takes the most time (1-4 days on average) and is the most expensive method.  State repositories can be hit and miss for a number of reasons.  Most states cannot mandate that their county courts report information, how often they report it or what types of information they report.  Normal institution tells you that the larger the sampling size, the better chance you have of finding more.  Unfortunately, that intuition is based on the fallacy that the larger sampling size is just as thorough and accurate as the smaller one.  Lastly, there are commercial databases, the quickest and cheapest method for obtaining a criminal background check.  Also, the most unreliable (see article on national criminal database searches).  Commercial databases rely on various reporting agencies willingness to provide or sell data.  Such sources can include corrections facilities, some county courthouses, some state sponsored sites.  There can be as many holes in these databases as there are in swiss cheese.  Having said that, statewide and database searches can be a good compliment to the county search, just not a good primary method.

Having said all of that, the buyer needs to make the age old decision: time vs. quality (accuracy) vs. cost.  And there are other factors to be considered here: how much time, money and energy would be spent defending a negligence claim for not utilizing a proper screening tool?  How can I put a price tag on the negative publicity from one incident in the workplace?  These are questions only a buyer can answer, but when you think about the aforementioned factors you are armed with the tools you need to make an informed decision.  Kind of like the results of a background check.   

Executive Background Checks

It only stands to reason that employers think about ratcheting up background checks when it comes to screening potential executives.  The prevailing logic is "these positions pay a lot of money and I want to make sure that everything looks good".  You can't argue with this institution.  Executives do make more money, they are hard to replace and even more difficult to find.  In addition to the cursory searches (Social Security Number Trace and County Criminal Records Check), employers should consider the following:  Federal Criminal Record Search- While a minuscule number of crimes are prosecuted at the federal level, they are mainly the types of convictions that would concern employers.  Many, but not all federal convictions are white collar in nature.  Employment Verifications- While important for many other positions, employment verifications are vital for executives.  It will help to confirm items such as starting and ending title, starting and ending salary, starting and ending position and responsibilities, etc.  Education Verifications- Confirms education degrees and we have all seen many public embarrassments based on fraudulent education credentials.  Professional License Verification- Confirm that your candidate is in fact a member of a state bar, a licensed medical practitioner, a CPA, etc.   

These are just some of the searches employers should consider when screening executive candidates.  A more specific list should be discussed based on the unique needs of an organization.  I guess the most important message here is that whatever you choose to do, make sure that you perform a thorough background check.  The risk for not doing so is just too great.

Bad Credit Hurting Your Employment Prospects?

Check out this cool article we were quoted in on Monster.com called Past Bankruptcy Can Haunt Your Job Hunt.