Hiring Presents Tricky Areas for Employers

By Jeff St. John, TRI-CITY HERALD
Inside Bay Area, March 12, 2005

KENNEWICK, Wash.— When it comes to hiring, business owners know there are some questions you just can't ask. Or maybe they don't.

At least, that's what Candice Bluechel, business services coordinator at WorkSource Columbia Basin, noticed at a recent WorkSource seminar on what's legal — and what's not — in the world of hiring and employee references. "Some of the folks in the audience were surprised," Bluechel said. "Even on their (job) applications, they were asking things you can't ask."

But what you don't know can hurt you when it comes to employee hiring.

A welter of federal and state laws and legal decisions — and fears of lawsuits — have put tight constraints on what information you can ask someone you're considering for a job, or what information you can give about a former employee. The Washington Legislature is considering that last problem this session with House Bill 1625, which would shield employers from legal liability for giving information about a former or current employee's job performance to a prospective employer.

"I have come in contact with people who have frustrations with not being able to get reference information," said Shannon Davis, human resources director for Kennewick-based Pay Plus Benefits Inc., which manages employee-related functions for about 100 small businesses across the country. "If disclosing information can get you in harm's way, you don't disclose anything."

But closing that gap still leaves a lot of questions off the table, and the business of testing and background-checking job applicants has taken off partly as a result, said Barry Nadell, president of InfoLink Screening Services Inc. Employee background checks used to be a "hard sell" when Nadell started his Chatsworth-based employment screening firm in 1994. "But our business has exploded in the last few years," he said. "More companies are concerned about due diligence and who they're hiring."

It isn't just the rank and file under scrutiny — chief executives can have hidden criminal records, too. Nadell noted InfoLink's 2004 "Annual Hit Ratio Analysis" shows that about 8 percent of its clients' applicants failed to disclose information about their criminal records. About 40 percent of applicants presented information that didn't jibe with their motor vehicle records, and 26 percent delivered incorrect information about their past employment. Interestingly, one of the most controversial types of testing — drug testing — only saw a 3 percent "hit ratio," indicating that modern testing can, in fact, ferret out information that can't be picked up with a conversation and a handshake.

Nadell congratulated Washington for considering a law to make it easier to share job-related information, noting its absence doesn't just aid employees with something to hide. "It works both ways," he said. "Because employers are scared of saying anything at all, it delays good people from getting employment. But it's good for our business. We're getting more orders for background checks than ever before."

Of course, job applicants can be ill-treated by this process, said Tena Friery, research director for the Privacy Rights Clearinghouse, a San Diego-based consumer education and advocacy nonprofit.

"We're not opposed to background checks. We think they're necessary in today's society," she said. "Our main concern is accuracy and access." The problem comes when the information on the public record is inaccurate — or when a background check picks up a criminal record belonging to someone with the same name as an applicant, for example. "The employer, from where I sit, has nothing to lose by giving an employee a copy of their background check," she said.

The Federal Trade Commission handles complaints from people who feel they've been wrongly fired or not hired, she noted. Also, what's OK for a background checking company to find in public records isn't the same as what an employer can ask in a job application, she said. For example, there's the date-of-birth issue. "This is obviously part of someone's personnel record," she said, but on the job application, "discrimination laws might prohibit having the direct employer, at least, ask about age."

That's just one of the many mistakes Bluechel noticed at her recent WorkSource seminar. "Some small businesses haven't even gotten around to having a really good job description written out," she said.

But setting out clear rules and standards for jobs is critical to follow laws that cover applicant testing, because tests are legally required to be job-specific.

"Testing is its own beast," said Davis of PayPlus Benefits. "They're very clear in their guidance that you can only administer tests that are made for that position." WorkSource Columbia Basin uses an assessment called Work Keys, which asks questions designed from the testmaker's profiles of more than 7,000 jobs, Bluechel said.

Like any good test, it's received approval from the U.S. Equal Employment Opportunity Commission, she noted. But for specific job sites, it's best if tests not only ask questions specifically tailored to the position, but also compare all the prospective employees to each other rather than an idealized norm, said Alan Lasky, InfoLink vice president of sales. Also, "Do not use them as the sole hiring and firing decision maker," he said.

But taken together, there's little doubt that background checks, screening and testing, when done appropriately, can cut turnover costs, Davis said — and that's good for both employers and employees.