Liability, Safety Top Reasons for Criminal Checks

By Kathy Gurchiek July 20, 2012

Criminal background checks on job candidates more often are used to reduce liability over negligent hiring and to ensure a safe working environment, rather than as a way to reduce or prevent theft, embezzlement and other criminal activity, a new survey has found.

The findings are from a Society for Human Resource Management (SHRM) survey, Background Checking—The Use of Criminal Background Checks in Hiring Decisions, conducted from Dec. 28, 2011, through Feb. 7, 2012, with 544 randomly selected SHRM members.

Approximately three-fourths of respondents were at organizations solely based in the U.S., though nearly two-thirds reported that their organization operates out of more than one location in the U.S.

Criminal background checks have been a hot topic since the Equal Employment Opportunity Commission (EEOC) issued updated enforcement guidance on April 25, 2012, the first in 20 years.

SHRM, which expressed concern over “potential conflict between this federal guidance and state laws,” has urged the EEOC to address how its guidance interacts with state laws.

SHRM Online reported in 2011 on a National Employment Law Project report that found an increase in the number of employers challenged in court for use of criminal background checks.

More recently, Indiana passed a law, effective July 1, 2012, that restricts criminal history information that is reported in background checks, signaling to employers the importance of being aware of the increasing number of state laws related to criminal background checks.

“Most organizations are not using these [criminal background checks] as broad screening devices,” said Mark Schmit, SHRM’s vice president of research. “They’re quite a way through the screening process before they even use them” and are “using them as final checks in the final stages” of the job hiring process.

Reducing Liability, Ensuring Safety

Many organizations conduct criminal background checks for positions that have nothing to do with the handling of money but involve entering a customer’s home, for example, or having responsibility for a client’s well-being, such as a day care worker, Schmit noted. This is where the concern over liability for negligent hiring comes in.

A conviction for a violent felony such as murder or rape, or a nonviolent felony such as fraud and embezzlement, would most influence an organization not to hire the candidate, SHRM found.

The severity of the alleged crime, regardless of whether it resulted in a conviction, would cause 84 percent of organizations surveyed not to extend a job offer. The more the convictions, the less likely employers are to hire the candidate (76 percent), while the relevance of the criminal activity to the job opening would cause 69 percent of organizations to refrain from making a job offer.

The top job categories where most criminal background checks are conducted on potential employees:

  • Positions with fiduciary and financial responsibility, including compliance and technology—69 percent.
  • Positions with access to highly confidential employee information—66 percent.
  • Positions with access to company or other people’s property or who would be in a position of financial trust, including information technology and administrative services—55 percent.

Other findings:

  • 69 percent conduct criminal background checks on all job candidates—most often after a contingent job offer (62 percent).
  • Only 4 percent initiate criminal background checks before a job interview.
  • 52 percent conduct criminal background checks to reduce legal liability for negligent hiring.
  • 49 percent conduct criminal background checks to ensure a safe work environment.
  • 36 percent conduct criminal background checks to reduce or prevent theft, embezzlement and other criminal activity.
  • 58 percent allow candidates to explain the results of the background check before making a hiring decision.

HireRight, a provider of screening programs, reported in its fifth annual Employment Screening Benchmarking Report that criminal background checks are the most common type of background screening employers perform (91 percent) to mitigate risk, safety and security concerns. The 2012 report is based on an online survey of 2,256 HireRight customers and noncustomers—including hiring, recruiting, HR, security and management professionals—conducted February 2012.

Nearly all of those it surveyed (94 percent) conduct background checks on job candidates before making a hiring decision, but only 12 percent screen volunteers and 7 percent check the background of vendors.

Legislative and regulatory changes are driving employers to evaluate and adjust their screening policies and practices, HireRight said in its report.

Unlike credit checks, criminal background checks are more broad-based, said Rob Pickell, HireRight chief marketing officerand senior vice president of strategy.

He advised HR professionals to look at their organization’s policy in light of EEOC guidance “and evaluate where there may be a disconnect between the two.”

In reviewing your policy, be cautious about blanket policies, make sure the team that is involved in hiring and background screening is properly trained around EEOC guidance and the Fair Credit Reporting Act, and take into consideration the details of an individual’s report, Pickell advised.

That includes “the business necessity of the type of data you’re pulling” and such details as the nature of the offense and whether the person was employed successfully after the offense,” he said.

Even before legislative and regulatory changes, though, “most of our clients were thoughtful in matching [background checks] to their industry and job roles,” he said.

“Companies will still continue to collect criminal records in the frequency they have today,” Pickell added. “How they make decisions based on those records will certainly evolve based on the [EEOC] guidelines.”

SHRM’s Schmit stressed the importance of background checks to the relevance of the job being filled. Make sure, he said, that “what you’re looking for in background checks connects directly to some aspect of the job.”

Kathy Gurchiek is associate editor for HR News.

Related Resources:

Background Checks: Criminal History Check Policy and Procedure #1, SHRM Sample Policies

Background Checks: Criminal History Check Policy and Procedure #2, SHRM Sample Policies

What HR Professionals Need to Know About the EEOC’s Guidance on Criminal Background Checks, SHRM Special Report

Related Articles:

Webcast Offers Insight into New Criminal Background Guidance, SHRM Online Staffing Management Discipline, May 15, 2012

Report: Lawsuits Challenging Criminal Background Checks on the Rise, SHRM Legal Issues, March 30, 2011



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