Employment Background Checks

Employment Background Checks

Employment Background Checks help hiring managers make more informed decisions during the hiring process.

Business owners seek to reduce costs and limit liability with every major decision they make within the business. Some try to save money by skipping over the thought of running an employment background check before making hiring decisions. Unfortunately, not paying for ae employment background check before hiring a new employee can cost the business even more in the long run.

Businesses are always looking for ways to reduce costs and limit liability when making major business decisions. Some business owners or managers try to save money by skipping the employment background check process before extending employment offers. Unfortunately, not running proper checks on candidates can end up costing companies more in the long run.

Employment background checks provide hiring managers with a variety of benefits and packages can be customized to fit their individual business or position’s needs ensuring that only the most essential reports are run on each applicant. Here are some of the available reports and their benefits during the pre-employment screening process:

1. Criminal Background Checks

Criminal record checks can help hiring managers ensure that they only extend offers to the best possible candidates. Background check companies can provide the past 7 years of criminal convictions to employers. Employers may be concerned about hiring people with convictions for violent acts, fraud, or embezzlement or DWI convictions while working at a previous employer. Criminal record reports provide hiring managers with insight into the candidate’s personality and history and will raise red flags, if any. It will also provide peace of mind if the candidate has a clear criminal history report.

Criminal Record Statistics in the US:

• Almost 1/3 of all working-aged people over the age of 18 in the US have a criminal record

• Employees with criminal convictions working in sales have a 28% higher risk of being fired for misconduct. (KelloggInsight)

• When it comes to occupational injuries, homicide is the 3rd leading cause in the US (OSHA)

• An average of 1.7 million violent crimes per year were committed against people who were at work in the US between 1993 and 1999. (Bureau of Labor Statistics Census of Fatal Occupational Injuries) The breakdown is as follows:
  

  • Homicide - 900
  • Rape/Sexual Assault – 36,500
  • Robbery – 70,100
  • Aggravated Assault – 325,000
  • Simple Assault – 1,311,700

• While most workplace homicides are committed by strangers (83%), there is still a significant number (11%) of incidents involving “work associates” in the form of co-workers, former co-workers, customers or clients. (US Dept of Labor, Bureau of Labor Statistics)

2. Driver License Check / Driving Records

Driver license checks (MVRs) can be of great benefit to businesses that require employees to use company vehicles as well as large commercial trucks and provide empoloyers with a look into the employee’s driving record as well as character. Lack of insurance, to many accidents, registration violations and other infractions could be an indication that the employee is an irresponsible person which could be transferred to the workplace.

Information from the Bureau of Labor Statistics (2016 Census of Fatal Occupational Injuries Report) on workplace driving incidents:

• Transportation accidents make up 40% of "workplace injury events" that are fatal.

• In 2016, there was a 7% increase in fatal injuries among transportation & material moving occupations, the highest since 2007 accounting for more than ¼ of all work-related fatalities.

2016 CDC report from the Center for Motor Vehicle Safety:

• Motor vehicle accidents cost US employers $25 billion dollars annually
  

  • This includes a cost of $671,000 per death
  • Non-fatal injuries cost an average of $65,000 per incident

• From 2003-2014, there were 22,000 work-related motor vehicle deaths in the US

3. Credit Reports

Employment credit checks will not provide employers with a credit score (FCRA compliance), however, it will provide insight into the applicant’s credit history including outstanding balances, collections, etc. This information is especially helpful for positions in which the employee would be handling cash, work in accounting or finance. Combined with criminal records for embezzlement charges, the credit reports will provide insight into the candidate’s sense of responsibility and financial stability. People in desperate financial situations may unfortunately be lead to temptation and end up stealing or embezzling from their employer.

Embezzlement statistics within the United States:

55% of cases occurred within companies that have less than 100 employees 37% of cases were committed by employees with finance/accounting functions 37% of cases involved losses over $500,000 Over a quarter of schemes lasted for over than 5 years

Above statistics from the 2017 HISCOX Embezzlement Study

4. Degree Verification Or Other Education Verification

Degree verification as well as other credential verification (certifications, etc.) helps fight the ever increasing concern of resume fraud. Running degree verification as part of a full employment background check process has become essential to employers, especially when those skills are paramount to performing their required duties. Candidates will often embellish or even lie about their qualifications thinking that no one will check. If employers don’t check, it may take hiring managers a very long time to realize that the candidate isn’t qualified for the position, and this could be after thousands of dollars have been spent paying and training an unworthy employee. Background check companies have a variety of methods at their disposal to confirm qualifications & can make the necessary confirmation phone calls on behalf of the employer.

5. Drug Testing

Even tough more and more states allow the use of marijuana, it is still illegal under federal law and a concern for business owners. Employee drug testing is an essential part of the employment background check process, not only for marijuana, but also other illegal drugs. Businesses risk being held liable for accidents in the workplace due to an employee under the influence. They can be a da danger to themselves, other employees and customers. Providing a safe business environment includes maintaining a drug-free workplace.

Statistics on overall drug users:

Drug using employees incur medical costs at a rate 300% higher than others causing an increase in insurance rates. (US Dept. of Commerce) Drug users are 5 times more likely to file Worker’s Comp claims. (IS Dept. of Labor) Drug abuse in the workplace make up roughly 30%-50% of all worker’s compensation claims. (US Dept of Labor) Drug using emploees function at ONLY 67% of capacity vs. regular employees. (National Institute on Drug Addiction) Tardiness by drug abusing employees are 3 times more likely and they have an absentee rate of 30-35 days per year. (US Dept of Labor)

Prescription drug use is of increasing concern for employers because:

1. As a part of workplace injury treatment, 65%-85% of injured employees receive narcotic painkillers. (2014 workers Compensation Research Study)
2. Employers are encouraged to expand their drug testing, because standard drug tests do not test for opioids and other prescription medications.
3. 23% of American workers have used prescription drugs for non-medical uses. (National Safety Council)

6. Social Security Number Verification

Social security number verification is used to confirm the identity of the applicant in question and helps make sure that they are not using a stolen identity and SSN. The verification process with check for fraud alerts on that SSN and will also provide information on the person’s eligibility to work in the United States. Businesses that hire employees without work authorization can be fined for doing so.

Failing to confirm employment eligibility puts companies at risk for:

1. Criminal charges and/or civil fines (when there is a pattern or practice of violations).
2. Debarment from government contracts

7. Employment Reference Check

Reference checks can be an important part of the employment background check process providing the hiring manager with an insight into the applicant’s character. It is important to find out if the applicant will fit in with the company’s corporate culture by talking to the provided references. Usually people will only provide references that they know will give them glowing reviews, but that is not always the case, and you can often still learn something about the applicant by talking to people the worked with or for. AAA Credit Screening Services would be happy to do the reference checks calls for you.

8. Address Checks

Address checks is a relatively easy way to determine the jurisdictions in which criminal background checks need to be run. Applicants that have committed crimes in other counties or states may eliminate their employers in those states in effort to avoid background checks being run in the areas in question. Address checks and the subsequent criminal record checks will provide employers with the insight on whether the candidate is trying to hide some infraction by not listing it on their resume or application.

9. Workers Compensation Claims Reports

Business with employees performing physical labor or that uses large equipment find it essential to run workers compensation claims reports on prospective employees. Workers compensation claims cost businesses huge amounts of money, by running reports, they can try to avoid future claims by avoiding accident-prone candidates.

Some statistics regarding workers compensation claims are listed below:

Workers compenstation claims cost businesses $62,3 Billion in 2014 (National Academy of Social Insurance) Only 12.9 billion (20.71%) of the $62.3 billion came from state funds or federal programs (National Academy of Social Insurance) $49.4 billion (79.29%) was paid by private carriers and self-insured employers (National Academy of Social Insurance) Drug users are 5 times more likely to file workers compensation claims. (US Dept of Labor) Aproximately 30% - 50% of all Workers Compensation claims are related to drug abuse in the work place – (US Dept of Labor) 65% to 85% of injured employees received narcotic painkillers as part of their workplace injury treatment. (2014 study by the Workers Compensation Research Institute)

The information above is designed to provide business owners, HR managers and employers with statistics and insight in the importance of running complete employment background checks on all employment candidates. Not every candidate with a criminal record can be considered risky, but it is important for employers to avoid violent offenders, applicants with a record of embezzlement or theft when making hiring decisions. Due diligence during the hiring process can help avoid workplace injuries, save companies money in the long run due to theft, training and termination issues due to unworthy employees.

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