Are you beginning to hire again? Do you conduct background checks? If not, you could be putting your organization at risk. According to a survey of over 600 organizations conducted last May by EmployeeScreenIQ, 70 percent of respondents perform background checks for more than 80 percent of hires with the primary purpose of reducing risk for the company.

For some organizations, regulations have driven the use of background screening. For example, most states require criminal background checks for individuals who work with children, the elderly or the disabled. For others, their concern is protecting the company’s stakeholders (clients, other employees and shareholders). Another theme was the disconcerting feeling that employees were more likely to falsify their resumes, perhaps due to the economy or changing social norms.

The following are some of the most common types of background screening services used, along with the percentage of employer-respondents who deem them as “mandatory,” and therefore use them for all jobs (versus using them “only on some jobs” or “never” using them at all):

• County criminal records checks—73%
• Employment verifications—68%
• National criminal record database—60%
• Substance abuse screening—49%
• Education verifications—42%
• E-Verify (federal government)—32%
• More than half of the respondents had never used this resource.

More employers are requiring background checks on contract workers and temporary employees as well. The breakdown is: 32 percent require that outside contractor companies/agencies screen their employees, 26 percent check backgrounds of contracted employees the same way that they do when hiring permanent employees, 13 percent apply a different level of checks for contractors, and 29 percent do not perform background checks on contractors nor mandate that they be performed.

The report concluded that the greatest challenge for organizations will be to ensure that they get high-quality background checks and use them routinely in a climate where untruthful resumes seem more common and the risks of bad hiring are greater.

Illinois Employee Credit Privacy Act
Signed into law on August 10, 2010, the Employee Credit Privacy Act (IL Public Act 96) prohibits employers from inquiring about or using credit history information as a factor for employment, recruitment, discharge or compensation. Effective on January 1, 2011, the Act also prohibits employers from obtaining a credit history report from a consumer-reporting agency, but it is not solely limited to information obtained from a consumer agency.

The new law does contain certain exceptions for employers and institutions with legitimate business reasons for requesting this information about applicants and employees. Governmental employers, banks, savings and loan associations, financial institutions, debt collectors, insurance companies, and surety businesses are specifically excluded. Additional exceptions are allowed under the Act for employers to use credit information where such information is related to a legitimate business reason or a bona fide occupational requirement for a particular position or group of employees.

These categories of exceptions apply generally to those positions involving money-handling or other confidential job duties. For example, employers may use credit information for employees whose duties require bonding under state or federal law; have unsupervised access to cash or certain assets valued at $2,500 or more; have signatory power over business assets of $100 or more per transaction; are in a managerial position which involves setting the direction or control of the business; or have access to confidential information, financial information or trade secrets.

While the steps in this Act have been a best practice for employers for quite some time, the Act will enforce the misuse of credit reports. The two important steps that should be taken by Illinois employers are: 1) to establish which positions within the organization meet the exception criteria and add this to the employee handbook, and 2) to be consistent with the request and use of credit reports for positions which fall into the exception category. iBi

For a complimentary copy of the AAIM Check Background Verification Toolkit, call 888-325-5121.