What is a reasonable budget for a background check? Many companies approach this question from a logical purchasing perspective: Find the cheapest product available that is sufficiently user-friendly. If your employees like it and your accountants don’t hate it, you’ve done well.
However, there are some important considerations that are not so obvious when shopping for the best value. Legal compliance and risk management can be overlooked in the decision process. If price is the only decision criterion, understand that it costs a little more to get reliable information. Don’t put yourself or the company in a position to be second-guessed, especially by a judge or jury.
To cite the obvious example, it is easy to go online and sign up your company with a screening service to run instant national U.S. criminal database checks. The screening service says the database contains millions of criminal records; it says it is running a “national” check; it says that the web site interface is effortless; it says that the results flash across the screen virtually instantaneously; and the cost is typically $10 to $20 or less. Many of these companies will even give you a “pass/fail” or “red light/green light” notification as to whether the company should hire the individual. Why in the world would any company consider spending $30, $50, $75 or $100-plus on a background check when a service like this is available?
The answer is risk management. The Fair Credit Reporting Act (FCRA) is a federal law designed to ensure that job applicants are treated fairly when employers hire screening companies to dig up information upon which they will base their employment decision. Bargain basement background checks do not measure up to FCRA criteria.
What, Me Worry?
If your company is sued for negligent hiring based on an employee’s criminal act, the company’s screening process will come under intense scrutiny to determine if the individual ad a checkered past that might have predicted the criminal behavior. The legal precedent is that if the employer “could have known,” then that employer “should have known” about that person’s propensity for criminal behavior.
A $10 instant background check does not provide an organization with reasonable confidence that it will weed out criminals on a consistent basis. There are hundreds of counties across the country that don’t share criminal records with any national database. Those that do share records are inconsistent about whether or how often they update their databases. There is no audit trail to determine the reliability of information.
In addition, many counties that share criminal records have redacted any personal identifiers (date of birth, Social Security numbers and the like) from those records because of the prevalence of identity theft. This means that a company could invite litigation by disqualifying applicants based on criminal records that matched only a common name.
On the Money
To get reliable information requires criminal records must be checked at the county level. To maximize the probability that criminal records will be found, each county of residence, work or school over the past seven years should be checked, including any alias names used by the individual. (Courts file criminal records by name; they do not have the methodology or the resources to update criminal records every time someone gets married or changes their name.)
A national database can be useful as a supplement to the county check, but checking it doesn’t guarantee that additional records will be found. Any criminal records that are found in a database must be validated by the local prosecuting jurisdiction to ensure that they are accurate and current for FCRA compliance.
Bottom Line: What Should I Spend?
The cost of a seven-year county criminal check is variable, because it can’t be predicted how many times each job candidate has moved or how many names they’ve used until the Social Security number trace is run. Each company’s average cost is variable as well because demographics of employees vary across companies and industries. A good rule of thumb is that a comprehensive, reliable background check can be performed in most cases for less than a day’s pay of the position being hired, and in most cases for far less. Investing a little more up front in this important due diligence process can save a company from potentially catastrophic consequences down the road.
Rob Thomson is communications manager and senior account executive for Cleveland-based preemployment screening companyemployeescreenIQ.