Consumer Reports: How Should Potential Adverse Information Factor Into My Hiring Decision?

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The decision to perform background checks is embraced today by virtually all employers. However, there is much that should be considered once you arm yourself with better information. Employment screening has more benefits than simply identifying more qualified candidates and contributing to a safer workplace. It may protect you from potentially significant damages in a negligent hiring lawsuit, if you handle the information properly. Additionally, treating job applicants fairly and objectively during the evaluation process is respectful to them and will reflect well on your organization. The paragraphs that follow illustrate ways that consumer information can be considered in relation to your hiring decisions. It is important to note that every company’s hiring standards and/or criteria for a satisfactory background check are unique and should be crafted with the advice of legal counsel familiar with the industry and each state in which that company operates.

What constitutes adverse information?

Adverse information in a consumer report could be considered anything that contradicts information the applicant has provided during the application/interview process, or anything negative that turns up in the course of looking into the applicant’s background. It may be as simple and innocuous as misstating dates of employment in a previous job, or as serious as a history of violent felony convictions. There is a broad spectrum of potentially adverse information, so it is important to give some thought as to how much weight should be assigned to different types of adverse information in your hiring decision. Adverse information can be considered using the following questions:

  • How serious is the discrepancy?
  • Is it related to the duties/responsibilities the applicant will be performing?
  • How long ago did it happen?
  • Is there a pattern of discrepancies?
  • If you choose to ask the applicant directly about adverse information, do they offer a reasonable and verifiable explanation for the discrepancy?

There can and will be borderline scenarios where you want to hire someone who really stands out as the best candidate, but they have a discrepancy in their past for which you have previously denied employment to another candidate. In these cases it is important to document why you may have chosen to hire one applicant with a specific type of adverse history and not another with the same. Let’s use an example: last year you hired a file clerk and the background check revealed a DUI conviction from 9 years ago. A check of the file today reveals that the applicant otherwise had a clean record and in all other respects was the most qualified for the job. While most would consider a DUI a serious driving offense, the job involves no driving, it happened long enough ago that the applicant has established and maintained a responsible history since, and there are no other discrepancies to suggest a pattern. Given these factors, you chose to ask the applicant for details about the incident, and the file is documented that you were impressed with the community service and self-improvement activities the applicant initiated as a direct result of the incident. Another candidate, when asked, may have provided no evidence of having taken responsibility for their action and was not hired (obviously, this should be documented as well).

Criminal Records

Criminal research is considered the foundation of most background checks, and adverse information here is very commonly used as the disqualifier for employment. For most positions, the mere existence of a criminal record should not automatically disqualify an individual from employment. First and foremost, be sure to read carefully all details provided about the record. The relevant dates, the charges, and the final disposition should all be evaluated. After cross-checking that the record is reportable under state and federal law, employeescreenIQ will report all criminal court information we find, including those that result in dismissals or other non-convictions. Many employers wouldn’t consider a single misdemeanor conviction (unrelated to the job duties) grounds for disqualifying an otherwise strong candidate, however, three or four misdemeanor convictions in the last two years might suggest a pattern of irresponsibility. Applying the questions listed above will help you determine the impact that criminal records should have in the hiring decision.

Social Security Number Traces and Credit Reports

SSN Traces and Credit Reports are both products of the credit bureaus. The most important point to understand is that billions of payments and transactions take place every day around the world and this data flows electronically into the databases of the credit bureaus. The vast majority of data flowing into these databases is correct and properly recorded. However, it is simply not possible for human oversight or quality control to ensure every piece of data is correct and accurate every time. In practical terms, what this means is that when you see a name other than your candidate or an address where they claim never to have lived on their SSN Trace, it is usually not cause for alarm. There are many legitimate reasons that other names and addresses may appear on a SSN Trace. Someone that has cosigned a loan is likely to be associated with that SSN. A simple data entry error (this is all electronic information, remember) becomes a part of the record. The reason these entries should still be investigated in the background check is the very reason the SSN Trace is run – it is simply the most reliable tool available upon which to base the audit trail of the background check. If you were simply to ask the individual where they’ve lived and what names they’ve used, it would be very easy for a dishonest applicant to hide criminal records from you.

A pre-employment credit report is also considered a standard requirement of the background check by many companies. Credit reports can seem a bit intimidating. The long list of active and dormant accounts, abbreviations, and codes can look dizzying. There is a better way. The “header” or Profile Summary can be used as a quick gauge of an individual’s credit history. The header will let you know of any existing public records (which might include bankruptcies, tax liens, civil judgments), the total amount of installment, revolving, or mortgage credit in place, an estimate of short term (monthly) obligations, and a summary of recent delinquent payments as reported by financial institutions. Contact employeescreenIQ for more information on interpreting this information.

Poor credit alone should not disqualify an applicant who is strong in other areas. This can lead to disparate treatment of protected classes (read: lawsuit). However, you can make a reasonable estimate as to whether the salary of the position is enough for the candidate to meet their ongoing financial responsibilities.

Verifications

One of the most common discrepancies occurs in the application process when unscrupulous applicants misrepresent – or blatantly lie about – experience, education, or their ability to perform essential functions of the job. There is an easy way to confirm that the candidate who sounds too good to be true actually has the experience or education required: contact schools and former employers and make sure their records match the applicant’s resume/application data. You wouldn’t necessarily fault the applicant if they claimed they began working as a Rocket Scientist on July 4, 2002, and the Acme Rocket Company reported their start date as the following week, on July 11. However, a flag should be raised when the verifications uncover a pattern of misrepresentations. Sometimes the discrepancies are an obvious attempt to mislead. Unearned degrees claimed, or stretching dates of employment to shorten or eliminate gaps of unemployment are discrepancies that can identify a dishonest candidate. Other times the discrepancies may be less egregious and represent an honest mistake. One option is to confront the candidate with discrepancies and give them an opportunity to explain the circumstances.

Better Information = Better Employees

There is no magic dust for making a perfect hire every time. Once in awhile you may get lucky when the perfect candidate happens along just when the perfect job for that person opens up. The majority of the time, however, the background check is the due diligence necessary to ensure the story presented by the candidate is one they’ve truly written.

Rob Thomson is Communications Manager and Senior Account Executive for Cleveland-based employeescreenIQ, a best practices provider of pre-employment screening services throughout the U.S. and worldwide. Rob can be reached at (800) 235-3954 ext. 438 or by email at rthomson@employeescreen.com.

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