Importance of conducting background checks
Source: Data Quest Investigations, Ltd. (800) 292-9797
The need for qualified employees must not overshadow the need for proper employee screening. A quick look at the numbers reveals the potential size of the problem when you fail to evaluate the backgrounds of your new hires:
• Statistics show that one-third of job applicants lie on their applications. Five percent falsify name, Social Security number and/or license number.
• Embezzlement accounts for $4 billion in losses annually.
• 11,000 violent incidents occur in workplaces annually, costing employers an average of $250,000 per incident.
• Two-thirds of all prison inmates were employed during the month before they were arrested for their current offense. Half of all inmates had been employed full time.
The Texas Restaurant Association is actively working to help you safeguard your business against the liabilities of hiring employees whose backgrounds indicate patterns of criminal or violent behavior. A smart hiring policy begins with background checks conducted by phone. You can also contract private background-checking firms (to find one that covers your market area, search on the Internet or check your yellow pages).
For Texas hires, you also can use the Texas Department of Public Safety’s Convictions and Sex Offender Registration Databases, which may be accessed online for a nominal fee (searches of the Sex Offender Database are free).
• The high cost of hiring mistakes
• Consequences of improper screening
• Negligent hiring
• Negligent retention
• Negligent referral
• Making an employment offer contingent upon background check results
• Texas convictions and sex offender screening
The high cost of hiring mistakes
A Trans Union survey revealed that:
• The Commerce Department and the American Management Association state that 33% of new business failures are due to employee theft.
• Employee theft and dishonesty costs U.S. businesses between $60 and $120 billion per year, not including the billions spent on protecting against theft (guards, security systems, etc.).
• Experts estimate that 41.4% of retail shrinkage comes from employee thefts. Others say that it is higher than 50%. One source states that 70% of all retail losses go out the door in employee pockets.
Hiring the wrong person can negatively impact a company in a number of ways:
• Money and time wasted on training and re-training.
• Loss of business due to unqualified employees and poor job performance.
• Incidents of breached confidentiality.
• Theft or misappropriation of funds.
• Workplace violence.
Consequences of improper screening
As an employer, you have the right to verify all the information provided in any application for employment. Many employers are not aware of the liability associated with inadequate employment screening methods, increasing their exposure to lawsuits stemming from:
Negligent hiring
Under current law, the employer has the duty to use reasonable care to select employees reasonable fit to perform the duties expected of the employee. The basic concept is that the employer may be liable for what it “knew or should have known or foreseen.”
Negligent hiring arises when a company fails to conduct a thorough background check on an employee, and there is something in that person’s past that may put others at risk. Claims may arise if:
• A reasonable investigation of the employee would have shown the potential danger the employee posed to customers and co-workers.
• The employer had a duty to conduct a screening, breached that duty (by failing or improperly performing the background check), and as a result injury occurred.
• The employer failed to take reasonable measures or precautions.
Negligent retention
Negligent retention applies the same principal when information is discovered about a current employee, yet that worker is not terminated immediately.
Negligent referral
Negligent referral holds an employer liable for providing misleading employment history.
Making an employment offer contingent upon background check results
Companies often find it necessary to extend an offer of employment prior to receiving background screening results to avoid losing a candidate to a competing offer.
It is lawful to extend a conditional offer of employment based upon the results of the background check. Every company should have it written into policy that employment is contingent upon he results of the background check and that the employee’s background, including credit history, can be reviewed at any point during his/her employment at the company. False or inaccurate employment applications are grounds for termination.
Texas convictions and sex offender screening
The Texas Department of Public Safety (DPS) has established the Convictions and Sex Offender Registration Databases Website to search for and verify criminal records of individuals. It is the official Internet source of background information about criminal convictions, felony judgments and sex offender registrations.
On the DPS website, the “Sex Offender Database” can be searched free of charge. The “Conviction Database” however requires users to create their online account and purchase “credits” which are kept on record in their account. The credits are used to purchase individual queries. For $3.15 per query, searches can be conducted based on names, dates of birth and other alphanumeric identifiers. The DPS states, however, that they do not guarantee accuracy and that the only way to positively link someone to a criminal record is through fingerprint verification.
For more information or to purchase queries, visit the site at