If a lawsuit or prior arrest is part of your past, your new employer increasingly wants to know.
As the economy improves and companies add to their ranks, many are taking the opportunity to revamp their hiring processes. And, with many people still out of work and vying for a limited number of jobs, employers can be pickier than ever.
At the St. Louis-based AAIM Employers Association, a provider of employer-related business services to 1,600 employers, the number of companies using the background checks and drug tests that AAIM offers its members more than doubled last year while its membership rose only marginally.
In 2012, 810 companies sought AAIMCheck background checks or drug tests from the organization, up from 392 in 2011.
The group’s background checks include employment and education verification, driving records and criminal histories. But county civil record searches that detail a prospective employee’s past or current civil lawsuits was the category that AAIM saw the most growth in, from 2011 to 2012, company executives said. A standard search dates back seven years.
Overall, AAIMCheck ran 19,215 background checks in 2012, up from 8,313 in 2010. The number of drug tests it conducted for its members grew from 502 in 2010 to 4,236 last year.
Philip Brandt, AAIM’s president and CEO, said the sharp rise in the number of checks isn’t due to increased hiring activity by its members.
Instead, employers are increasingly becoming aware of the high costs when they don’t pre-screen employers, he said.
“Hiring people costs money,” Brandt said. “To get it right the first time is what employers are more focused on now.”
An added danger, Brandt said, is the greater exposure companies are faced with when a high-ranking employee is caught flubbing information on his or her resume.
Examples of executives whose resumes contained errors that proved embarrassing for their employer include Yahoo! Inc.’s former CEO Scott Thompson, who was ousted from the company a year ago after news broke that he claimed a degree in computer science he hadn’t earned.
“There’s more and more awareness when hires go wrong,” Brandt said. “That can be devastating for their business.”
But with the increase, employers need to make sure they don’t run afoul of federal law.
“It’s a trend that we’ve been noting for several years, particularly after 2011,” Michelle Rodriguez, staff attorney for the National Employment Law Project, said about increasing number of employers conducting background checks and drug tests. NELP is an employee advocacy nonprofit organization based in New York.
Rodriguez said the number of companies that offer these services is increasing, and technology is making it faster and easier for the checks and tests to be performed.
Her nonprofit group is fielding more complaints from people who say background checks are making it impossible to find work, she said.
“Unfortunately, there are too many companies that have blanket bans” based on criminal history or other factors, Rodriguez said.
The U.S. Equal Employment Opportunity Commission provided new guidance last April that said the use of some background checks in hiring can violate prohibitions against employer discrimination in Title VII of the Civil Rights Act.
For example, a company could be in violation of Title VII if it uses criminal history information for applicants in different ways for different groups, based on applicants’ race or national origin.
David Minton, president and CEO of Clayton, Mo.-based Heartland Bank, said the bank, which employs 300 people, has used background checks and drug tests on all new hires for at least six years.
“We’re obviously handling one of customers’ most important possessions, their money,” he said. “We want to make sure that we do that with employees of the highest caliber.”
But even with the information the background checks and drug tests can offer, Minton said employers should also rely on other factors to make their hiring decisions.
“There’s no substitute for checking references,” he said.
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