My Contractor Said They Performed a Background Check

By Nick Fishman Nov 4, 2008

Stop me if you’ve heard this or something similar before: “I just don’t understand how my contractor could have placed a habitual convicted felon in my accounting department. They said they performed background checks on all of their employees!”

Similar statements are being uttered in today’s workplace more than ever, and most likely the contractor in the scenario above was telling the truth. It might very well have performed a background check. However, those who have spent time reviewing such rants know that the term “background check” is a generic catch-all that can have many meanings. Even specific elements within a “background check” can have different meanings.

Take for instance a criminal background check. There are several different types of record searches: County, Federal District, Statewide, National Database, etc. Even a county search can take on a different meaning. Some utilize off-site, online technology to tie in with courts as opposed to on-site research. Some search only for felonies, while others will include felonies and misdemeanors.

This is clearly an issue on the minds of HR professionals. In fact, SHRM Online recently highlighted the issue of “screening the extended workforce” as one of the top trends for 2008.

Much ink has been devoted to defining the differences between all of these searches and, by and large, the marketplace is more educated about these differences than ever before. How then, does our example continue to take place?

Ask Questions, Define the Process

Companies spend a lot of time and energy developing a background screening process that allows them to hire the most qualified candidates and to minimize risk in the workplace. When it comes time to hire a contractor that will be placing their employees in the organization or in front of its clients, it is important not only to make sure that they perform background checks but also to understand what type of background check the contractor performs. It is also important to let them know what defines a suitable candidate for the organization and what does not.

Too many companies are willing to accept that their contractors perform background checks and are satisfied with that. Don’t assume that their screening criteria and hiring standards are comparable to the organization’s. Share with them the company’s specific requirements. If the requirements for a specific job function are to conduct a seven-year criminal record search in all counties identified in an address history search, ask contractors to mirror these standards, including alias names if required.

Make sure that the definition of a county search is the same. There are too many misconceptions, misrepresentations and misunderstandings about what various searches do, and it is important that everyone is on the same page.

If there are more specific criteria for certain positions, ensure that these are being adhered to. For example, a company might consider it important to evaluate a motor vehicle record for each of its drivers. If a contractor is hiring a driver on the company’s behalf, make sure they do so as well.

Also, inquire whether contractors ever update background checks over the course of their employees’ tenure with the company. If so, how often is the background check updated? What information is sought in these updates?

Don’t Assume Right To Review Consumer Report

A common misconception among employers is that they automatically have the right to review the background check of a candidate their contractor has screened. The Fair Credit Reporting Act (FCRA) prohibits those with a permissible purpose to execute a consumer report to share the information with any third party unless the signed Applicant Release specifically grants permission to do so. Therefore, unless specific consent has been granted, companies do not have the right to review the report.

There are two options here:

  1. Communicate the hiring standards for what constitutes an acceptable candidate and cede control of the process to the contractor.
  2. Consult an employment attorney who can modify the Applicant Release to allow the company to review such information.

There are pros and cons to each scenario. If a company cedes control of the hiring process, it loses the ability to ensure that its standards are being met; however, it insulates itself from the liability associated with negligent hiring decisions. I’ve seen organizations do it both ways, and it is important to consider the company’s unique needs and requirements before making such a decision.

Who Should Be Screened?

Following are examples of contract workers who should be screened before being cleared to work at an organization.

  • Contract (e.g., PEO) and 1099 employees.
  • Temporary or temp-to-perm workers.
  • On-site vendors’ employees.

Addressing this issue before you sign a contract is obviously the best practice. This is an important issue and one that requires both parties to be on the same page.

Nick Fishman is chief marketing officer for the Cleveland-based pre-employment screening services firm employeescreenIQ.

Adapted with permission from employeescreen University. Copyright 2008 employeescreen University. All rights reserved.

Editor’s Note: This article should not be construed as legal advice.


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