Background checks can be a powerful tool for businesses and organizations looking to safeguard themselves, the public, and those that they serve. As one part of a thorough hiring process, a criminal background check provides key insights that make risk management more effective. However, these tools only have real utility when those responsible for hiring make the best use of them and the information they provide. In Michigan, auditors recently discovered that the state’s unemployment agency had become lax in its enforcement — and as a result, at least one person had the opportunity to embezzle taxpayer dollars.
Relying on temporary workers provided by staffing agencies to fill various positions, the Michigan Unemployment Insurance Agency labored under poorly-defined guidelines and unevenly enforced policies. The UIA did not require these agencies to conduct background checks as part of their contracts. In a review of six thousand records, a single third-party staffing company sent more than 150 employees to UIA that had reported convictions — and nearly a third of those had felony convictions for crimes including identity theft and embezzlement.
Had UIA ordered an advanced background check of its own to confirm that candidates were safe and qualified to work in an environment involving state funds, these convictions would have appeared. Even so, another problem within UIA could still have prevented effective vetting: ambiguous employment restrictions. Auditors found that supervisors in the UIA were sometimes unaware of when or how to disqualify an applicant, with ambiguity surrounding what types of convictions could be disqualifiers. One contractor passed through the system and went on to steal nearly $4 million before authorities uncovered the embezzlement.
State auditors laid out an array of recommendations, including defining the types of convictions that are disqualifying and for which positions. These are the guidelines that all businesses using background checks should strongly consider. Not only can such guardrails assist companies in their efforts to maintain compliance with local laws that “ban the box,” but they ensure more consistent outcomes in the hiring process.
In some places, such as California, businesses must also factor in the time background checks may take to conduct as part of their usage guidelines. Under a recent judgement, the state’s courts and law enforcement agencies were prohibited from allowing users to search for criminal records by date of birth and/or driver’s license number.
The result for many employers has been skyrocketing delays and increasingly long times to hire due to the difficulty associated with verifying that records belong to the correct individual. A bill was introduced in the California legislature to amend state code to allow birth dates and DL numbers once more. Still, California has not been the only state to explore limiting background checks in such a way.
Although there can be challenges associated with background checks, making effective use of them requires only careful planning and the right tools. Businesses must use the best practices to conduct due diligence on every applicant, especially to screen for convictions related to the duties and opportunities afforded by a job role.
About Michael Klazema The author
Michael Klazema is the lead author and editor for Dallas-based backgroundchecks.com with a focus on human resource and employment screening developments