Who Have You Hired Lately?
Proper Employee and Background Screening
Proper Employee Background Screening is not only an essential tool, but also the first line of defense in Risk Management; Which may save you thousands of dollars in future Claims and defense fees. So why would you trust an internet based information broker When so much rides on accuracy.
Recent Statistics After a recent study of business losses conducted in the manufacturing, Service and retail industries, The New York Times reported that an estimated 72% of inventory loss can be attributed to employee theft. According to the Bureau of National Affairs the cost to businesses in the United States each year is between $1 5 – $25 billion dollars.
● 27% of small business failure in the U.S. is attributed to employee and undetermined theft.
● Internal employee related thefts to businesses operating in the U.S. occur 15 times more often than external theft.
● Embezzlement losses related to U.S. small and medium sized businesses exceed $4 billion dollars every year.
● Other non theft related employee crimes cost U.S. small and medium sized businesses an estimated $50 billion dollars annually.
(U.S. department of Commerce)
Even more detrimental than fiscal loss due to employee dishonesty is workplace violence. Statistics show that the average award in workplace violence lawsuits exceeds $ 1 million dollars per case, and overall, On the job violence costs U.S” employers $36 billion per year.
Today it is fairly common knowledge that employers have an obligation to provide a safe work environment for its employees. But not everyone is aware of the consequences that can stem from negligent hiring and/or negligent retention of employees. Negligent hiring occurs when an employer does not exercise “reasonable care” in hiring of a new employee or contractor. More and more legal actions are resulting in judgments that find employers liable for negligent hiring in situations when an employee was hired into a position without the proper checks in place to verify the individual’s history. An employer who hires an employee, Or contractor with a history of criminal or violent behavior which results in ham to another employee, Vendor, Contractor Or Customer Will likely encounter civil litigation, and in some cases be included in the criminal proceedings. Employers additionally face the risk of liability for negligent retention should the employer not perform regularly scheduled screening and / or if the employer does not respond appropriately to signals or information that an employee or contractor may pose a threat to those with whom they associate with through employment.
2016 Los Angeles, California; A manufacturing company paid a $12 million settlement in a negligent hiring and retention lawsuit. The suit alleged that the company failed to adequately investigate an employee’s criminal past or property respond to the employee’s erratic behavior which subsequently resulted in the beating of an off site employee during a meeting. 2015 Redwood City, California; A maid service employer paid a $2 million settlement to a customer in a negligent hiring lawsuit as a result of an alleged rape. The suit alleged that the employer failed to investigate the employees criminal past, Or respond adequately to allegations that the employee has made several sexual advances towards other employees during his 4 year tenure with the employer. Accessed criminal records included incidents of sexual battery, and multiple restraining orders.
What can the employer do?
Because employers are held accountable if they were aware, should have been aware, Or had any reason to believe that a potential employee, current employee or contractor posed a risk or threat to others, it is essential that thorough background checks be conducted at the time of hire and periodically throughout the employee’s employment. These background checks should be recorded and documented by the licensed agency conducting the investigations and made available with the agencies investigation methods during or before any litigation or legal process. It is recommended that employers have a background policy in place which describes the pre-employment screening and indicates that employees will background checked periodically, Semi-annually or annually as a requirement for continued employment.
At the time of hire every employer should carefully inspect the information recorded by an applicant on his/her employment application・ Discuss and consider prior patterns of short-term employment. Verify the potential employee’s explanation with the previous employer. Develop a relationship with a licensed investigative agency that specializes in background investigations to obtain employee screening checks that include applicant social security number, date of birth, and criminal history as part of the screening process. Many employers also require DMV driving records, Civil records, and basic family law records as part of their screening requirements, each maintaining specific places of information which may indicate financial issues’drug use and violence. Performing the employee background checks annually or semi-annually is also a recommended technique that is essential in Risk Management.
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