Hiring: Are Background Checks Really Necessary?

payroll background check

Updated on June 24, 2013

What do you really know about the person you’re interviewing?

It’s an unfortunate fact: Many job-seekers resort to lying on their resumes. In fact, 53 percent of all resumes and job applications include lies or exaggerated facts, according to Privacy Rights Clearinghouse.

Trusting a candidate only on the basis of a resume can turn disastrous. What if:

  • The candidate you’re hiring for a key role in your company’s future didn’t earn the master’s degree they indicated on their resume and instead they never finished high school?
  • A candidate has a criminal background — embezzlement — and you’re about to entrust them with your payroll funds?
  • You find out your new employee is a sex offender? You may be liable for negligent hiring if an employee hurts someone, and a jury decides you should have seen it coming. According to the Society for Human Resource Management, civil lawsuits due to negligent hiring are increasing. Juries usually side with the employees, and damages can average $1 million or more.

Conducting a thorough background check can help you get the real scoop on job candidates. But background checks must be conducted carefully and legally.

For example, all criminal background checks must comply with the Fair Credit Reporting Act (FCRA), which requires notifications and procedures when using third-party background screening vendors. A background check can’t be conducted until the candidate signs a release form, which is separate from a job application and other paperwork. Employers should also consider the timing of a background check; legal experts recommend waiting until after a job offer is made.

Employers conducting background checks must follow state and federal regulations, including the Americans with Disabilities Act (ADA) and Equal Employment Opportunity Commission (EEOC) guidelines. According to the EEOC, employers cannot bar an individual from employment simply because of a conviction record. The following circumstances must be considered:

  • the nature and gravity of the offense,
  • how long ago the conviction took place, or the sentence completed, and
  • the nature of the position being filled.

If an employer rescinds a job offer, they must have a solid business reason, and the company’s background screening policy cannot negatively affect any protected classes.

This article is provided by Patriot Software, Inc. Patriot Software provides small business software for employers, including payroll and hiring software. For more information, visit the Patriot website at www.PatriotSoftware.com.

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