Continuous Employee Background Checks May Now Be Required

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Aug 26, 2019

What if one of your employees was arrested on an assault weapons threat, but you were unaware because you only check backgrounds at time of hire?

How would a young mother employed at your firm react when she finds out that she was working alongside a recently convicted sexual predator? And, that the company made no effort to make her aware of it.

Obviously, it would be desirable to avoid these types of sudden surprises and the associated PR damage that will likely occur when the public finds out your company hasn’t acted to immediately get the problem employee off your payroll. Well, it is now becoming increasingly clear that the appropriate corporate preventative action for identifying problem employee behaviors outside of work is implementing continuous employee background checks. Yet in 2018, only 11% of workers were later re-screened (outside of a status change).

If you’re not familiar with the term, continuous background checking is where (after hiring) you proactively and continuously look for embarrassing or disqualifying employee actions that occurred outside the workplace. These events or actions often include scandalous arrests/events, the loss of a required license or the loss of an immigrant’s work authorization. With these real-time background updates, organizations can now quickly know about issues with a current employee so they can take immediate action to change their employee’s status (when it’s appropriate) before PR or legal issues get out of hand.

There are many reasons why continuous employee background checks may be necessary

In addition to the PR damage that can occur from employing an individual who has recently done something controversial, there are many other reasons why continuous background checks are becoming more necessary.

The image damage resulting from employing a problematic worker now spreads faster – In the past, the image damage from employing an employee with a toxic background was limited. However, because of the growth of social media, the fact that your firm is still employing a troubled worker is now more likely to spread faster and more widely. This viral spread may result in significantly more costly PR damage to the company if it doesn’t act quickly and appropriately in the eyes of the public.

Other firms have already led the way – because they have already experienced the PR damage associated with retaining a driver with a questionable background. Benchmark firms like Uber have already initiated a process for continuous background checking of its gig workers. That has resulted in dozens of drivers being dropped. Continuous background and license checks have been common in healthcare, transportation, schools, and childcare for years.

Your employees expect their safety to be protected – With all the negative publicity around mass shootings it’s only natural for your employees to expect leaders to take proactive action to identify and remove troubled employees. And with this overall increase in gun violence and sexual predators, workplace security and being protected from fellow workers with mental issues may now be at the top of many employee’s minds.

Your customers expect their safety to be protected – whenever your customers are likely to be in an uncomfortable situation with your employees. It makes sense to increase their comfort level, by letting them know that you instantly weed out employees with even the slightest negative background issues (as Uber does).

An employee may have lost their right to work – In many jobs, the loss or suspension of a government-issued license may mean you can no longer legally employ the person in their current job. And in the cases of immigrants, the employer should be aware of cases where the employee has recently lost their right to work in the US.

The intense recruiting competition may increase the number of weak hires – It’s also important to realize that the likelihood of hiring an individual that may need continuous background checking has increased because of the talent shortage. When hiring managers are faced with slim candidate pickings, they are often forced to “settle” on questionable hires.

There are now many more gig workers that you know less about – It has become more common for many firms to hire a large volume of gig workers and those that work remotely. And with fewer interactions, management is less likely to know if one of these workers has done something nefarious outside of work that, if revealed, could severely damage your firm’s image.

Continuous background checks are now much easier to conduct – now that much of the needed background data is available digitally online. It’s much easier for a firm or a vendor to quickly and inexpensively conduct continuous background checks covering serious issues.

Action steps to consider

When you are considering continuous employee background checks, here are some important positive and negative factors to consider.

Build a business case for more frequent monitoring – Work with the CFO and your risk management department to calculate the costs of the brand damage that can occur when your firm is not immediately aware of significant changes in your employee’s backgrounds. Also, calculate the costs of having a “toxic employee” working alongside other workers in a productive team. Show executives the cost-benefit ratio in order to justify the appropriate level of updated background checks. Also be aware that the practice will likely hurt recruiting, your external employer brand image and employee retention. In case of doubt, do a small pilot in one job area and see if the early discoveries justify the costs of the background checks.

Prioritize the jobs that most need background checks – Obviously, it makes sense to focus more frequent background checks on the jobs where a license or credential is required. More frequent background checks should also be prioritized when there is a higher chance of fraud / theft or a major PR embarrassment.

Decide which background areas should be monitored –The most common background areas that are checked include licenses, the right to work and arrest records, when it’s appropriate and legally allowed. You should also consider periodic security clearance checks, credit checks, credential verification, bankruptcy, civil filings/judgments, drug tests and a search for controversial political/social behavior on social media.

Decide how frequently you should check backgrounds – Even if you conduct periodic once or twice a year arrest, license, and social media background checks managers could still be unaware of a serious employee problem for many months. So, if you need to know immediately about damaging employee behavior, continuous background checks may be the only effective option.

Encourage your employees to “say something” – because the damage caused by not knowing about a problematic employee can be so great. It’s important to get the entire team involved in immediately identifying employees with potential issues. That starts by encouraging individual employees to proactively come forward about their own issues (that management should know about). But it also involves the sensitive issue of encouraging employees to come forward with information about any damaging issues involving their co-workers. The best way to get employees to be more forthcoming is often to ensure that everyone knows the full damage that a “surprise employee issue” can have on everyone’s job security.

Be aware of privacy issues – Many of your employees may consider continuous background checks to be an invasion of their privacy. So, whether they are legally justifiable or not under privacy law, it makes sense to thoroughly and convincingly explain the need in these inquiries to your employees.

Get specific written permission – It’s a mistake to assume that an organization automatically has the right to continuously check on employee’s backgrounds. Even though they gave permission during the hiring process, you will need separate written permission from them (including what you will check), in order to legally continually check a current employee’s background (especially in California).

Be aware of legal issues – Legally it’s a good practice to make each employee aware of any negative finding resulting from continuous background checks and to give them a reasonable chance to challenge those findings. It’s also important to realize that financial background checks must meet the requirements of the FCRA (Fair Credit Reporting Act) and any appropriate state or local country laws. It’s also a good idea to calculate whether background checks have had an adverse impact on members of EEOC protected groups.

Be aware of the flaws in background checking – It’s important to note upfront that there are many flaws related to background checking. It’s also important to realize that not all public records are accessible and there is no evidence that behavior is revealed on social media accurately to predict negative workplace behavior.

Plan your action steps after discovery – Once you discover a problem with an employee, you need a structured plan of action. In many cases, an immediate suspension might be enough. However, firing someone simply because of an arrest is almost always legally problematic. But still, there may be some arrest cases where an organization can simply no longer be associated with the employee. In those cases, a release negotiated with the employee and their lawyer (sometimes with a confidential payment) may be the highest ROI solution for the company. In any case, always check with your lawyers and union reps before you take any direct action so that you are fully aware of all the possible ramifications.

Final thoughts

It’s important to realize that we now operate in a highly charged environment where much of the public is cynical about the actions of corporations and businesses. And in this hypersensitive environment. Failing to immediately take immediate action against an employee that has done something that the public finds unpalatable can result in a variety of damages from bad PR to product boycotts.

In my view, it is becoming essential that business leaders proactively educate themselves about the need to be fully aware of an employee’s actions outside of work that can almost instantly damage their company. In my experience, the most effective tool to minimize the damage is to conduct continuous background checks at least on your employees that work in highly visible or sensitive jobs.

Author’s note: If this article stimulated your thinking and provided you with actionable tips. Please take a minute to follow or connect with Dr. Sullivan on LinkedIn and to subscribe to TLNT Daily

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