As the name implies, FCRA governs credit reporting activities.  The Fair Credit Reporting Act also sets guidelines and standards for gathering information about employee applicants. Every ‘consumer report’ which relates to ‘character, general reputation, personal characteristics, and mode of living’ about a person is regulated by the FCRA.  Background screening reports prepared by a consumer reporting agency are included in the reports under the regulation of the FCRA.

You would expect to receive certain benefits from screening applicants for employment, such as being able to know a resume is accurate, or that you aren’t hiring someone with a criminal background. By actually saying in your employment advertising that you use background screening, you also receive another benefit. Most people who have a criminal background won’t even apply for the job, and all applicants are much more likely to provide a complete and truthful application or resume. You’ll save time and money in the hiring process, before you even begin reviewing applications.

The 1996 Workplace Violence Survey, by The Society for Human Resource Management, reported that background screening was being used by only 66% of companies. HR professionals now are reporting that number is up to 96%. Due primarily to concerns about corporate scandal, workplace violence, and security, screening employees is now a routine.

As an employer, you’ve likely been advised by your attorney and/or insurance agent that you should have insurance that will protect against negligent hiring claims. It’s also important for you to know that insurance isn’t likely to cover all the costs of negligent hiring activities. If an employee commits assault, rape, murder, or armed robbery, against another employee or customer, there can be equally damaging non-financial costs. The potential of a negligent hiring lawsuit is just one more reason to perform thorough pre-employment background screening before you hire!