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Labor: Hiring Best Practices

David EvanstThe adage in journalism is "If your mother tells you she loves you, check it out." This level of diligence in the employment world is equally important, especially in today's hiring environment, where employers are inundated with applications for precious few job openings.

How can an employer make sure that in the buyer's market in which it finds itself, the labor services it is acquiring will be "as advertised?" And as importantly, how can it ensure it is not creating liability for itself in performing its due diligence? Here are three quick best practices to keep in mind.

First, make sure your background checks comply with the federal Fair Credit Reporting Act (FCRA). Anyone who has refinanced a home or applied for a credit card has seen the credit report generated as part of the process. Lenders are legally required under FCRA to provide such reports, and for good reason. Oftentimes, there are inaccuracies in the report that require fixing. Occasionally, there is even evidence of fraud or identity theft that would have never been uncovered otherwise.

However, too few employers realize that the FCRA also applies to the background check process. Under FCRA, job applicants have a right to know beforehand that a background check will be performed on them and a right to know of any adverse information that may be discovered as a result.

Accordingly, an employer should consult with an attorney or human resources professional that is well-versed in FCRA compliance to make sure every step of its application process is FCRA-compliant. In fact, some payroll companies provide this kind of guidance as part of the package they offer to employers.

Second, once you know you are FCRA-compliant, make the most of your reference checks. Too few employers utilize the reference information that is generally included in most standard employment applications or volunteered on an applicant's resume. This is a shame because such checks can provide a wealth of information, even if a previous employer wisely limits its answers to "neutral" information like confirming dates of employment, wage level and positions held.

If there is any variance between the information the applicant provided and what a former employer or reference provides, run this discrepancy to ground. It could be an honest mistake, but it also could be an applicant betting on the fact that his would-be employer won't have the time or the inclination to verify such information. Even if the explanation is an innocent one and an employment offer is ultimately extended, you have already demonstrated to this particular employee that you pay attention to such things.

Third, ask for backup documentation whenever possible to prevent fraud and puffing. The level of fraud perpetrated on employment applications in practically every industry is staggering. And even setting aside instances of outright fabrication, almost all applicants cannot resist the temptation to puff their credentials just a tad in hopes that it will distinguish them from the pack. How does an employer guard against this?

In addition to specifically telling applicants that you do check references as mentioned above, you should also insist on backup documentation. Did this applicant claim to graduate from college with a 3.8 GPA? Ask for a transcript. Did this applicant serve in the military and receive an honorable discharge? Request that she provide her discharge paperwork. Did the applicant claim that he was laid off from his last employment assignment as opposed to being terminated? Require him to produce the original of the employment benefits determination he received, which in most states certifies the reason for separation from last work.

If done right, background checks can not only prevent bad hiring decisions from occurring, but can deter would-be applicants from ever applying in the first place.

Read David Evans' previous column. Read David Evans' next column.

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