Background checks may be a casualty of staffing shortage; labor and employment attorney looks at why they still matter

Plus, how reference checks are different from background checks

Have background checks taken a back seat – or been shelved altogether – in the midst of pandemic-spawned staffing crisis? Recent news that the State of Michigan Unemployment Insurance Agency failed to do background checks on thousands of new employees and inadvertently hired hundreds of individuals with a history of fraud and identity theft, puts the focus back on this once-ubiquitous step in the hiring process, according to Deborah Brouwer, managing partner of Detroit-based labor and employment law firm Nemeth Law, P.C.

“Background checks were once a staple of the hiring process, and job offers were frequently withheld pending their completion,” Brouwer said. “With employers feverishly seeking to hire in almost every industry and profession amid a national talent shortage, it may be that some dangerous shortcuts are being taken.”

Brouwer notes that background checks may include a look into the applicant’s credit history and criminal record, if any. While criminal records shouldn’t automatically preclude returning citizens from employment, they may rightly exclude them from certain jobs, depending on the nature and age of the conviction. For example, it would be inadvisable to hire someone convicted of embezzling for a position requiring check signing or the regular handling of cash. Also, an individual with a documented history of workplace violence might be a dangerous hire in a variety of employment settings, potentially putting employees at risk of harm in addition to lawsuits filed against the employer should an act of violence occur.

Background checks are different than reference checks, Brouwer explained.

“Reference checks are conducted based on personal or professional references provided by the prospective hire. While they can be helpful, they are handpicked and generally likely to be favorable,” Brouwer said.  “When advising employers on hiring processes, I definitely recommend background checks first and foremost because they provide information that is less likely to be obtained from a reference.”

But how about ban the box?

A national movement about five years ago sought to ‘ban the box’, referring to the box on a job application asking if the applicant has ever been convicted of a felony. In Michigan, then Gov. Rick Snyder signed a 2018 law that prohibited the question from being asked on state applications for employment and encouraged private employers to do the same. That same year, though, the Michigan legislature enacted a law prohibiting all local governmental entities from adopting ‘ban the box’ ordinances.  As Michigan law currently stands, generally, an employer may inquire into pending felony charges and may ask a job applicant if he or she has been convicted of a crime.

Reviewing best practices for hiring

The old adage says hire slow and fire fast, but in an era where employees are hired on the spot and sometimes paid the next day, does it still hold true? When talent is tight and decisions often need to be made quickly so as not to lose out on good candidate, Brouwer offers the following tips.

1. Coordinate hiring so that it’s centralized into a department, such as the HR department if an employer is large enough to have one. When multiple managers are given carte blanche authority to hire, quality can be compromised; conversely, good candidates for a position in another department may be overlooked.
2. Follow a prospective hire checklist – even if it’s shorter than those used before the pre-pandemic and the current staffing shortage – to ensure that all appropriate steps are made in seeking the best hire.
3. Have the candidate be interviewed by more than one person; a second or third person may notice red flags that could be missed by a sole interviewer.
4. Conduct background checks on all employees, regardless of position. A uniform policy will avoid claims of discrimination. Follow the same protocol for drug testing if that’s part of the hiring process.
5. Given the hiring roller coaster, employers may be working with new and possibly less experienced HR staff – don’t forget to ensure that staff is properly trained in best practices and the laws regarding hiring.

About Nemeth Law, P.C.

Celebrating 30 years in 2022, Nemeth Law specializes in employment litigation, traditional labor law, management consultation, arbitration, mediation, and workplace investigation for private and public sector employers. It is the largest woman-owned law firm in Michigan to exclusively represent management in the prevention, resolution and litigation of labor and employment disputes.