A single negligent hiring lawsuit can cost millions of dollars, and even if a poor hiring decision doesn’t result in a lawsuit, the subsequent negative publicity can cause irreparable damage to a company’s reputation.
Contractors, engineering firms and all employers have a duty not to hire individuals whose criminal history indicates they are unsuitable for the job. Knowing as much as possible about employees before they become intimately familiar with a business is crucial because not all positions are supervised constantly, leaving the door open to potential liabilities.
Few industries face as many risks and exposures as construction. Not only is it possible for an employee to cause an accident operating machinery or equipment while under the influence of alcohol or drugs, but a malevolent employee with access to critical company information could inflict serious financial damage on a construction business—putting jobs and key stakeholders at risk. Moreover, an employer may be liable for negligent hiring and retention if it fails to conduct comprehensive background checks on employees.
Simply stated, the potential for lawsuits and corporate liability for negligent acts reinforces the importance of due diligence in hiring practices. Pre-employment screening is one of the best risk management defenses against workplace violence, drug abuse, accidents and theft.
Tips to Reduce Liability
Construction companies can use a screening process to determine whether an applicant has been honest through the initial application process. Supplying false information on an employment application can indicate a potential hiring risk and can be a justifiable cause for termination.
It’s important to evaluate the information received from a background check provider. Companies should base the information used to select or deny a candidate on established facts relevant to the position. In addition, a thorough background check should include both national database and single-county searches.
When conducting background checks, companies must adhere to the Fair Credit Reporting Act (FCRA). Employers must obtain written authorization from an applicant to perform a background check, obtain past education or employment references and obtain professional license reports. Additionally, if a background check produces negative or adverse information, the applicant, under FCRA guidelines, has a right to dispute the report.
Additional guidelines for reducing liability include:
- develop internal policies and mandate a company-wide commitment to mitigate risk and promote a safe work environment;
- develop a pre-employment screening policy using background check products and services to ensure safe hiring practices;
- follow all FCRA rules and regulations;
- perform due diligence in selecting a screening supplier;
- use multiple screening products and develop position-specific standardized searches;
- establish criteria to evaluate information (i.e., what will constitute disqualifying information?);
- incorporate applicant background information and release forms in an application or pre-hire package;
- eliminate subjective opinions to ensure consistency when interpreting results;
- conduct a periodic program review to ensure all applicable policies are followed; and
- conduct periodic screening of employees to maintain a dependable workforce free of unlawful behavior.