Why do an employee background check?
WORKPLACE VIOLENCE – The U.S Department of Justice reports that 1 in every 32 adults has a criminal record. 8.5% of of applicants who have authorized background checks have convictions. There are 6 million threats of violence and 2 million workplace assaults each year. 13 people die due to workplace violence every week.
EMPLOYEE THEFT – 33% of employees admit to stealing a product or money from jobs in the last three years. The U.S. Chamber of Commerce estimates dishonesty by employees costs 1%-2% of gross sales. It is estimated that 30% of business failures are directly related to employee theft.
FALSIFIED EMPLOYMENT APPLICATIONS & RESUMES – Applicants tend to stretch the truth. Statistics reveal that near 36% of applications are falsified!
The cost of hiring, training, and then terminating one employee can be very expensive. According to William M. Mercer, Inc., turnover costs a minimum of $10,000; 20% of respondents indicated turnover costs exceed $20,000.
NEGLIGENT HIRING LIABILITY
In 1999, Trusted Health was ordered to pay $26.5 million dollars to the family of a murdered patient. Courts throughout the U.S. declared, “prior to the time the employee is actually hired, the employer … should have known of the employee’s unfitness”, and is liable if they did not perform an adequate background investigation.
Negligent hiring litigation is a growing problem! Employers lose 79% of all negligent hiring suits and the average jury plaintiff award in employment law cases continues to be in excess of $1.6 million! (Public Personnel Management – USA Today – Nov. 21, 2003) Damages are awarded against employers because of the employer’s negligence and failure to perform a reasonable search into the employee’s background prior to hiring. Courts have ruled that “an employer has a general duty to check criminal records for employees who will have interface with the public, or who could have a foreseeable opportunity to commit a violent crime against someone in the course of their employment.”
Today’s litigious society has created an environment that requires management to be armed with numerous tools. Many employers currently spend little time verifying the accuracy of employment applications; and, although they would like to adequately screen applicants, the cost to do so has, in the past, been financially prohibitive. Now, companies can not afford to not perform background checks.
A car rental company recently paid $750,000 to an employee who was raped by a fellow employee.
A guard service was found guilty for inadequately checking a guard’s references when the guard helped steal from their client. The charge – negligent hiring as they failed to investigate and the employee had a criminal record. The damages paid were over $300,000.
An employee who had previously been convicted of passing bad checks forged signatures on sales contracts. The court judged his employer negligent and awarded $175,000.
After driving for a telephone company for only a week, an employee was involved in a traffic accident. The jury learned that the company never saw the employee’s driver’s record which had five traffic tickets within 18 months. They awarded the injured party $550,000.
An Appellate Court awarded $4 million to a woman who was raped by an employee. His employment application indicated no criminal convictions and the employer did not perform complete background checks.
A hospital was found negligent in hiring a kidney transplant coordinator who was unskilled in reading medical charts. As a result, a patient was given a transplant of a cancerous kidney which resulted in his death.