Small Business: Running background checks on job applicants

Close to two-thirds of small businesses test job candidates for drug and/or alcohol use, but only about a third verify their education, according to a recent survey by HireRight.

The majority of small businesses don't use social media to screen applicants, the survey found, a prudent choice given the potential for liability if personal details such as marital status or sexual preference come into play.

Regardless of the screening measures your business takes, having a clear and consistent policy can help ensure you're making the best hiring decisions while limiting your exposure to rogue employees.

"The stakes are frequently much higher for small businesses," explains Rachel Trindade, vice president of marketing for HireRight, an Irvine, California-based provider of employment screening solutions. That's because small firms typically have less of a financial buffer against employee theft, turnover and other costs, she notes.

As more small companies recognize this, "we're seeing adoption increase dramatically," Trindade says.

Create a core list of background checks to use on all new hires, adding additional checks based on specific job duties, HireRight suggests.

"Be consistent," advises Kimberly Malerba, chair of the employment law practice at Ruskin Moscou Faltischek PC in Uniondale. You may use different checks for different positions as long as they're consistently applied, she says.

When determining the questions to ask applicants, keep in mind the protected characteristics you're not allowed to consider, such as age and religion, Malerba says. "If you seek inappropriate information, an applicant can bring a claim that you didn't hire him or her for an improper reason," she explains. That's why using social media for screening is ill advised, because you may come across information you don't need to know that could be problematic.

The top checks made by small businesses were criminal searches (97 percent); identity checks (81 percent); previous employment/references (58 percent) and driving records (43 percent), according to HireRight.

Check court data. There are roughly 3,300 court jurisdictions in the United States, and about half of them have electronic access, says Michael Gaul of Proforma Screening Solutions, a Purcellville, Virginia, employment background screening firm. Don't take anything for granted, he advises, noting about 10 percent of the people Proforma screens turn out to have a criminal past.

Establish a written screening policy that "becomes the framework for everything you do," he says. Rescreening is advised when employees are promoted or take on increased responsibility. Screen independent contractors, depending on their responsibilities.

Know the laws or seek counsel, says Gaul. States have different requirements, and you need to make sure you're in compliance, he notes.

If you need help, it can pay to use a third-party screening vendor, says Barbara DeMatteo, director of human resources consulting at Portnoy, Messinger, Pearl & Associates Inc., an HR consulting firm in Syosset. Costs range from $30 to $100 per employee.

DIY. You can do some basic checks yourself, such as searching the Social Security Administration website to verify identity, which is free, DeMatteo notes. "Spend your money wisely," she advises. Avoid unnecessary checks. For instance, perform credit checks for those handling money or securities, not those in customer service.

At the very least, confirm educational history. "Education is the biggest place where people lie about their backgrounds," DeMatteo says.