EmployeeScreenIQ Blog

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

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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

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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.

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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.

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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.

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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?

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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).

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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.

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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.   

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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.

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