The Cost of Not Doing a Proper Background Check 15 Jan 2018
Share
Running a small business or managing a nonprofit is often a labor of love. One of the essential skills many managers in these sectors are continually working on is how to cut costs and run a leaner organization.
Any organization operating on a tight budget is often wary about the upfront cost associated with an employment background check. Even though working with a reputable agency is relatively inexpensive, many small-business owners would rather skip the background checks altogether or look to cut corners and go at it on their own, not worrying about whether they are being FCRA compliant.
The desire to cut costs is understandable, but failure to properly perform an employee background check can cost much more.
In this blog, we’ll look at a few instances where companies ran into legal issues that were tied to their failure to perform adequate background checks.
Make sure you’re FCRA compliant
Procedure is important! In August 2013, James Ellis III sued the trucking company Swift Transportation for violating the Fair Credit Reporting Act. Due to the results from his background check, Ellis was turned down for a job. However, Swift Transportation did not inform him that he had a right to get a free copy of the report, as required by FCRA — a small but important procedural matter. Instances like this are more frequent than you think and highlight the need to work with a company that can navigate complex laws.
Check credentials
Many businesses large and small require that employees have certain credentials. Neglecting to ensure new hires really have the qualifications to work in your industry can be costly. Most recently, this was dramatically demonstrated when the Financial Industry Regulatory Authority (FINRA) fined J.P. Morgan Securities, LLC to the tune of $1.25 million for failing to adequately screen 8,600 individuals for felony convictions or disciplinary actions from financial regulators.
Okay, so this example is rather extreme. But again, it illustrates an important lesson: Namely, that cutting corners can do more than harm your business or endanger employees — it can lead to costly fines as well.
At Trusted Employees, we know the challenges and rewards that come with managing a small- to mid-sized organization. We also know how important it is that you hire the right people. If there are legal hurdles in your way, we can help you navigate them. Feel free to contact us with any questions you might have.
Robyn Kunz is the Chief Compliance Officer at Trusted Employees. She has worked in the background screening industry for over 15 years and holds Advanced Certification in the Fair Credit Reporting Act from the National Association of Professional Background.
This website uses cookies so that we can provide you with the best user experience possible. Cookie information is stored in your browser and performs functions such as recognising you when you return to our website and helping our team to understand which sections of the website you find most interesting and useful.
Strictly Necessary Cookies
Strictly Necessary Cookie should be enabled at all times so that we can save your preferences for cookie settings.
If you disable this cookie, we will not be able to save your preferences. This means that every time you visit this website you will need to enable or disable cookies again.
3rd Party Cookies
This website uses Google Analytics to collect anonymous information such as the number of visitors to the site, and the most popular pages.
Keeping this cookie enabled helps us to improve our website.
Please enable Strictly Necessary Cookies first so that we can save your preferences!