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NYC Bosses Can’t Ask Prospective New Hires This Sensitive Question

(Washington Post, with permission from Jena McGregor)

In a vote Wednesday, April 5, 2017, NYC approved legislation that will ban employers from asking job applicants about what they make in their current or past job and could have far-reaching consequences beyond the city as employers try to standardize their practices. It’s an idea that’s starting to spread: In passing the measure, New York City joins Massachusetts, Puerto Rico and the city of Philadelphia — where the local Chamber of Commerce filed a lawsuit against that measure Thursday — in banning the question from job interviews. More than 20 other city and state legislatures have introduced similar provisions.

The measure, aimed at tackling pay inequity, prohibits employers from asking the candidate’s current or former employers about salary, as well as querying public records for it, although applicants can volunteer the information if they choose. The city’s Public Advocate, Letitia James, said it would affect about 3.8 million workers when it takes effect in six months and extends the prohibition to private employers. New York City Mayor Bill de Blasio (D) and Gov. Andrew M. Cuomo (D) had earlier passed orders that would ban salary history details from public-sector jobs.

The thinking behind the new law is that when employers ask about an applicant’s salary history, they can end up perpetuating any discrimination that women or people of color may have faced in the past. When employers ask about current or previous salary, they can hear a number that “anchors” them, and then offer to pay some percentage more on a figure that could already be too low. “Being underpaid once should not condemn one to a lifetime of inequity,” James said in a statement.

Although the measure is for New York-based employees, employees well beyond New York could feel the effects, say equal pay advocates and employment lawyers. Fatima Goss Graves, president-elect of the National Women’s Law Center, said in an email that the measure “stands to transform the way that companies operate around the country,” she said. “So many companies operate in multiple jurisdictions. If a company changes its practices in New York, it is likely to also make changes around the country.”

Melissa Osipoff, a labor and employment attorney with Fisher & Phillips, agreed that companies like to homogenize things as standard as a job application. With so many companies doing business in New York, “I think what we’ll see is companies that do business in New York City just eliminate that from their applications entirely,” she said. “This will have wide-ranging influence.”

Meanwhile, nearly 20 states, the District of Columbia and two cities (San Francisco and Pittsburgh) have introduced legislation that includes a provision against salary history information, according to data from the NWLC. At the federal level, the newly reintroduced Paycheck Fairness Act also calls to ban the question, and Rep. Eleanor Holmes Norton (D-D.C.) plans to reintroduce a bill from 2016 that did, too.

Some business groups have opposed the measure. Kathryn Wylde, president and chief executive of the Partnership for New York City, said in a statement that “closing the gender pay gap is important” and most major employers are already taking steps to correct the problem. “Inserting the city government into the relationship between employer and potential employee is potentially disadvantageous to both,” she said. “Politicians are eager to demonstrate their contribution to popular causes, which is about all this legislation accomplishes.”

It’s also possible the measure in New York could face legal challenges. On Thursday, the Greater Philadelphia Chamber of Commerce filed litigation against the law in that city. “The ordinance is a broad impediment to businesses seeking to grow their workforce in the city of Philadelphia,” the chamber said in a statement, citing a violation of employers’ First Amendment rights.

But other companies have begun privately ending the practice of asking the question on their own. James’s office said that several New York-based companies, including Kickstarter, Peeled Snacks and BBMG were among those who had already prohibited the question.

Others are weighing the concept. Cindy Robbins, who leads human resources for the cloud computing giant Salesforce, said in an interview this week that it’s a shift her staff has discussed training their recruiters to make. “For example, instead of asking what current compensation is, ask what is the expectation they have around compensation,” she said. “That changes the tone around negotiation.”

================================================================================

As a boss, I’d definitely like to know a potential employment candidate’s previous salaries as it provides me with insight into employee performance.  Forcing employers to operate in the dark can only be bad for business as many small to medium sized businesses can not afford a high employee turnover rate and the less we know about a new hire, the more difficult it is to employ that person to his/her maximum capability.

BNI Operatives: Situationally aware.

As always, stay safe.

Anatomy of a Background Check; Information In An Initial Sweep.

background-check-2

With a fairly healthy dose of humor and an equal measure of alarm, I’ve listened, read, heard,  have been Tweeted, Facebooked and Tumblred to by representatives on all sides of the “gun control” (the gun has control – it is immobile and its product possesses kinetic energy only when put in motion) issue.  Almost all parties agree that an enhanced background check should be required for persons wishing to purchase firearms. That’s a throwaway sentiment.   How many people, besides those that have already been through a gun purchase background check, actually understand the process and the information contained in such a search?

We conduct background searches daily; the majority are on domestic subjects, and we also provide international services.  Our clients request background searches for a multitude of reasons ranging from pre-employment prerequisites, (I’ll get into the government-mandated employment eligibility program, EVerify, in another article. Althoug,h if you search the archives, I’ve already posted several on the matter.), to hiring a nanny to personal  financial stability of potential business partners. (We do not conduct background checks for purposes of investigating a potential personal partner, locating mistresses or suitability of a date.)

To follow is the bare bones information contained within a comprehensive check (the minimum required to possess a firearm, aside from the NCIC fingerprint and DNA checks):

COMPREHENSIVE BACKGROUND CHECK

DOE, ARMANDO J.

Subject Information:

Name: ARMANDO J. DOE

DOB: 5/20/1979

Age: 33

SSN: 123-45-6789 issued in New York between 5/20/1979 and 12/31/1979

Names Associated With Subject:

ARMAN DOE

ARMAND J. DOE

J. ARMANDO DOE

ARMAND JOHN DOE

A.J. DOE

Others Associated With Subjects SSN:

(DOES NOT indicate any type of fraud or deception)

THOMAS ROBERTSON DOB: 4/9/1967

================================================================

Address History:

135-23 122nd  ST, SOUTH OZONE PARK, NY 11420-2742                      (Jan 2011 – Dec 2012)

14-01 121st , COLLEGE POINT, NY 11356-3765                                          (Aug 2010 – Jan 2011)

P.O. BOX 5106, COLLEGE POINT, NY 11356-5106                                      (June 2007 – Dec 2012)

149-21 71ST ST, COLLEGE POINT, NY 11563-9823                                    (Feb 2003 – Nov 2008)

7 SUMMIT STREET, MALBA, NY , 11357-3476                                            (June 1990 – Mar 2006)

Information on Affiliated Addresses:

135-23 122nd  ST, SOUTH OZONE PARK, NY 11420-2742                      (Jan 2011 – Dec 2012)

Name Associated with Address:

ARMANDO J. DOE

Current Residents at Address:

ARMANDO J. DOE

DINA C. DOE

SARA DOE

718-555-1234   ARMANDO DOE

Property Ownership Information for this Address

Property:

Parcel Number – 50-40-21-09-1001

Book – 4761

Page – 1243

Owner Name:  SMITH, HERMAN

Owner Name 2: SMITH, ANNA LIA

Property Address: – 135-23 122nd  ST, SOUTH OZONE PARK, NY 11420-2742

Owner Address: 13247 SW 43RD ST,  PLANTATION,  FL 33309-2742

Sale Date – 02/03/2011

Sale Price – $320,000

Land Usage – MUTLI RES

Total Market Value – $438,850

Assessed Value – $438,850

Land Value – $100,950

Improvement Value – $118,010

Land Size – 16,789 Square Feet

Year Built – 2000

Seller Name: RIVINGTON, IAN & JANICE

Legal Description –  182-2400 B LOT 270

135-23 122nd  ST, SOUTH OZONE PARK, NY 11420-2742                      (Jan 2011 – Dec 2012)

Possible Properties Owned by Subject: 

Property: None found.

(THE REPORT CONTINUES LISTING ALL OF THE ABOVE INFORMATION – owner, owner address, sale date… – FOR EVERY ADDRESS ON RECORD FOR THE SUBJECT.)

Emails Associated W Subject:

AJDOE520@FLASH.NET

ARMANDOJD520@GMAIL.COM

ARMANDOJD05@HOTMAIL.COM

Phones Associated W Subject:

Name: ARMANDO DOE

Address: SOUTH OZONE PARK, NY 11420

Phone Number:  718-555-1234

Phone Type:  Landline

Carrier:  Verizon

Name: DINA C. DOE

Address: 135-23 122nd  ST, SOUTH OZONE PARK, NY 11420-2742

Phone Number:  347-555-9518

Phone Type:  Mobile

Carrier:  VERIZON WIRELESS

Criminal Record Profile:

 National Criminal Record Search (Felonies & Major Misdemeanors):

       New York Arrest Report:

              Name: DOE, ARMANDO J.

              SSN: 123-45-6789

              Address: 135-23 122nd  ST, SOUTH OZONE PARK, NY 

              State of Origin: New York

              County of Origin: Queens

              Case Type Description: Queens County(NY)Arrest

              Arrests: 

Arrest #1

Arrest Date: 09/21/2010

Arresting Agency:  109, NYPD

Arrest Disposition Date:06/29/2012

Court Fine:          Offense: INTENT DIST/2Nd

Agency Case #:2011-675835G

Arrest Level/Degree: FELONY

Arrest Disposition: BOOKED


(The arrest will undoubtedly carry several charges.  Possession, attempt to distribute, resisting arrest, etc.  Each arrest charge will be separately defined – from charge to disposition.)

       New York Department of Corrections:

              Name: ARMANDO J. DOE

              SSN: 123-45-6789

              State of Origin: NY

              Inmate Number: 137869

              DOB: 05/20/1979

              Race: WHITE

              Sex: Male

              Eyes: GREEN

              Height: 6′ 00″

              Weight: 205

              Case Number: 0529234

              Case Type Description: Department Of Correction, NY

              Latest Admission Date: 09/21/2010    

State Criminal Record Search (Felonies & Major Misdemeanors):

(Repeats the Nationwide Search and may include ACDs – Adjournment in Contemplation of Dismissal. In an ACD situation, the offender is on a conditional probation period of anywhere from six months to several years, depending on his/her criminal history.  If the person re-offends for any reason during this adjournment period, s/he can be re-arrested.  The follow up information will include every possible detail from co-defendant(s), arresting officers to court transciptionists to defense counsel/prosecutors to the presiding judges and every motion made on the case.  Per the number of arrests, this portion of a background check can run anywhere from several dozen to several hundred pages.)

Driver’s License Information: 

(Current)

Name:           ARMANDO J. DOE

State: New York

License Address: 135-23 122nd  ST, SOUTH OZONE PARK, NY 11420-2742

DOB: 05/20/1979

SSN : 123-45-6789

Gender: Male

Ethnicity: WHITE

Expiration Date: 05/20/2016

Issue Date: 03/13/2006

License Type: RENEWAL

License Class: Non-Commercial – Class D

Height: 6’00

Data Source: Governmental

(Previous)

Motor Vehicles Registered To Subject:

Vehicle:

Description: Blue 2001 Nissan Sentra – 4dr Sedan

VIN: 5NING01C8ST000001
Engine: 4 Cylinder 152 Cubic Inch — Gas Powered               State Of Origin: Pennsylvania

Anti Lock Brakes: 4 wheel standard

Air Conditioning: Standard

Daytime Running Lights: Standard

Power Steering: Standard

Power Brakes: Standard

Power Windows: Standard

Security System:  Standard Alarm

Roof: Standard

Price: 16750

Radio: AM/FM CD

Front Wheel Drive: No

Four Wheel Drive: No

Tilt Wheel: Standard

Registrant(s)

Record Type: CURRENT

Name: ARMANDO J. DOE

Address: 135-23 122nd  ST, SOUTH OZONE PARK, NY 11420-2742

DOB: 5/20/1979

Sex: Male

Age: 33

Tag Number: CFD9524

License State: NY

Earliest Registration Date: 6/12/2012

Latest Registration Date: 6/12/2012

Expiration Date: 6/11/2013

License Plate Type: Private

Title Number: 0219856887

Title Issue Date: 6/12/2012

Lien Holder(s)

Company Name: CHASE MANH

Address: 150 PARK PLACE, 23RD FLOOR, NEW YORK, NY 10019

 (Report includes every vehicle ever owned or registered by the subject and all associated tags.)

Concealed Weapons Permit:  (This will include target permits.)

[None Found]

Possible or Previous Work Affiliations:

Name: ARMANDO J. DOE

Title: Manager

SSN: 123-45-6789

Company: ABCDE, LLC.

Address: 158-09 Northern Boulevard, Little Neck, NY  11363-4857

Dates: Dec 21, 2005

Corporate Affiliations:

[None Found]

Professional License(s): 

[None Found]

 FAA Certifications: 

[None Found]

FAA Aircrafts: 

[None Found]

Watercraft: 

[None Found]

Voter Registration:  

Name: ARMANDO J. DOE

Address: 135-23 122nd  ST, SOUTH OZONE PARK, NY 11420-2742

DOB: 5/20/1979

Gender: Male

Ethnicity: White

Political Party: UNDECLARED

State of Registration: New York

Status: ACTIVE

Hunting/Fishing Permit: 

[None Found]

Bankruptcies:

[None Found]

 Liens and Judgments:

[None Found]

UCC Filings: 

[None Found]

Possible Associates:  (Business)

Possible Relative Summary: 

>Immediate Relatives
>> 2nd Degree Relatives & AKAs on Immediate Relatives
>>> 3rd Degree Relatives & AKAs on 2nd Degree Relatives

(This section begins at the grandparents and continues through prior-divorce or death in-laws. Each item contains the person’s name, DOB, DOD, last known address/phone number and their 1st through 3rd degree relatives.  Then we run the subject through EVerify – subject matter for an upcoming article.)

END OF COMPREHENSIVE BACKGROUND CHECK REPORT. 

The above described background report is compiled from many diverse sources including, but not limited to,  governmental (federal, state and local) agencies (SSA, DMVs, DHS…),  consumer credit reporting companies and other reporting affiliates that may be indirectly or second/third-party affiliated to the subject (e.g., guarantor).  This is a low to average security level background check. There is additional research that occurs but the above sample report is representative of a first sweep on a background investigation.

Now we at least have a jumping off point to begin discussing enhanced background checks.  Debate away.

There is more to the above subject profiled than meets the eye.  All of the identifiers have been changed but this is a real background check – minus multiple pages of repetitive and unrelatable information.  Armando’s grandmother’s ex-and now dead- husband won’t make a difference. My point is that a comprehensive background check follows through very carefully and leaves enough markers for the reviewing investigator to pick up on if s/he decides there is reason to dig deeper.  I have trust that the security background search systems in place actually do work and have and will evolve as we meet new technological challenges for those wishing to circumvent their disqualifying past as it relates to gun purchases and in general.

Our operatives: Situationally aware.

As always, stay. safe.

Profile Of An Employee Thief.

employee theft

The vast majority of annual losses that result from criminal activity in business and government entities are not caused by shoplifters or burglars in the United States. It is employee-thieves disguised in many forms who commit their crimes, which are, unfortunately, often discovered long after their various schemes begin. (We recently worked a case involving a medical clinic with 120 employees, 27% of which possessed a significant criminal history.  The average for a company this size is 2- 3 %.  In next week’s Part II of this series on employee theft, we’ll go more in depth with the details of this particular entity’s setup, causal factors and how we resolved the issue.)

Their many schemes are identified as occupational fraud by the Association of Certified Fraud Examiners, or ACFE.

Based upon the Gross World Product, the ACFE estimates that global losses from fraud may be $3.5 trillion.  No entity is exempt and just about any employee can be engaged in some form of fraudulent activity and theft, be it office supplies, time, gasoline, telephone calls, cash, assets, food, liquor, artwork hanging on the walls, bed sheets, pillows and blankets, dishes, narcotics, credit cards, checks, information, and whatever else is available for the taking. They pad time sheets and expense reports, submit false medical claims, forge mortgage documents, submit phony bills to clients and customers, and just about anything else that you can imagine.

The businesses or entities most at risk

The businesses most at risk to internal fraud and theft, in the order of losses from highest to lowest, are banking and financial services, government, and public administration, and the manufacturing sectors. Small employers (fewer than 100 workers) are more commonly victimized than larger companies because they usually cannot afford strong anti-fraud measures. They’re also often not in a financial position to absorb losses and  keep their business going as a viable entity.

Shocking statistics about losses

Businesses, globally, experience losses of about 5% a year from schemes committed by employees. The average  loss was about $400,000, and in one-fifth of businesses that were surveyed in the ACFE study, the loss was at least $1,000,000. In the least costly forms of fraud, the cost to business was about $120,000.

In about 87% of the cases the assets was the leading cause of losses. While financial statement fraud accounted for only about eight percent of all cases, it had the highest median loss of about $1,000,000 per occurrence. Finally, corruption and various phony billing schemes made up about one third of all cases but more than fifty percent of the dollar losses, for an average of $250,000.

Many cases will never be discovered in time and therefore, the actual amount of the losses may never be known . In cases that are referred to law enforcement, 55% of the offenders plead guilty, 19% of prosecutions are declined, and 16% are convicted at trial.

Profile of an employee-thief

ACFE reports analyzed a number of factors to identify the thieving employee: gender, personal credit history, education, criminal history, employment history, job duties and responsibilities, lifestyles and other influences in the employee’s life and concluded that long-term employees are the most suspect because of their knowledge of the inner workings of the entity and understanding of the controls that they must circumvent.

As a general rule, occupational fraud is carried on by men and women who fit into the following profile:

  • College educated employees are most likely to steal, those with high school degrees are second, and those with either graduate degrees or some college are least likely to commit criminal thefts;
  • Most who engage in fraud are first time offenders within the criminal justice system. The vast majority (87%) have never been charged or convicted of a fraud related offense, and almost the same percentage (84%) have never been punished or terminated by an employer for fraudulent conduct. Only five percent had prior offenses or had been charged but not convicted;
  • Two-thirds of the crimes are committed by men 31 to 60 years old. The highest concentration is between the ages of 36 and 45;
  • More than 75% of frauds occur in six departments: accounting, operations, sales, executive upper management, customer service, and purchasing;
  • The more authority an employee has, the larger the losses will be, with a median value by owner/executives of $573,000;
  • Losses caused by managers averaged $180,000 and by employees, $60,000;
  • The longevity of employment is related to the amount of losses. This is because the longer a person is employed the more he or she is trusted and is subjected to less scrutiny; and they have a better understanding of the system. Consider Bernard Madoff and the number of years he was able to defraud investors;
  • Employees who commit fraud during their first year (fewer than 6%) will cause an average of $25,000 in losses. Almost half the losses (42%) are caused by employees who have worked from one to five years. Those that worked for the company more than ten years caused a median loss of $229,000.

Now that you understand the make-up of a company thief, next week we instruct on loss prevention.

BNI Operatives: Situationally aware.

As always, stay safe.

 

Who Am I Dealing With?? Watching Your Back(ground) Checks.

Lately, we are requested quite often to research the backgrounds of prospective employees, personal and business partners and corporate entities.

With our now internet-enabled reach (not just to locate web-based information but to network with other investigative specialists), we are able to access nationwide data as to the personal, work and credit backgrounds of potential new hires.  We have gained the ability to likewise perform these background search services on a global basis for those seeking new business alliances, products and services.   Today, given the mobility and globalization of people and companies, often the backgrounds of the those with whom we might form potential partnerships are, at best based on hazy anecdotes and very basic, publicly available information.  Unfortunately, these types of non-professionally investigated histories can easily be manipulated, i.e., by net savvy perception managers.  For this, and many other reasons (personal security, access and information verification, to name several) we will always steer people away from the alleged “free” searches available online.  If one is serious about researching a potential employee or partner’s background, get it done right — by an experienced, highly rated private investigator.

Below we outline several types of background searches, their information yield and best applicability situations.

Basic Background Check, Individual:

Primary Uses:  Prospective new hires, subject identification, tenant verification.

Should yield:

  • DOB & Alias Names
  • SSN Verification
  • Address History (20 yr)
  • Address Summaries
  • Others Residing w/Subject
  • Possible Phone #s Associated w Subject (landline/mobile)
  • Email Addresses
  • Nationwide Criminal Profile (Includes State & Nationwide Criminal Databases, National Warrant Databases, Department of Correction Records, Nationwide Sex Offender Check)
  • Property Transactions
  • Civil Judgments, Tax Liens, & Evictions
  • Bankruptcies
  • Registered Vehicles *
  • DL Information *
  • Voter Registrations
  • Hunting & Fishing Permits
  • Professional Licenses
  • Possible Work Affiliations
  • Relatives & Associates

*In available states.

Recommendation: If the new hire will have access to accounting and or client information, we also suggest obtaining a release to conduct a standard asset search.

Comprehensive Background Check, Individual:

Primary Uses:  Prospective partners, major settlement/award cases, potential private care (nannies, housekeepers, home nursing aides…) and personal/business financial services providers (attorneys, accountants, brokers…)

Should yield:

  • All of the above plus :
  • Credit check (obtain authorization)
  • Financial background (to include but not limited to assets, banking information,  involvement in fraud investigations)
  • Professional background (to include but not limited to being a named party in any legal action, professional sanctions, industry rating)
  • Verified (in person/voice) and thorough reference checks

These are basic searches to conduct in the above referenced circumstances.  Of course, no two files will ever be the same and each search should be geared towards individualization.  A good professional investigator will know where to look and when to dig deeper.

As always, stay safe.

Federal and State Employer Use of Arrest And Conviction Records.

job application

(From Nolo.)  Given that nearly 65,000,000 Americans have an arrest history, now more than ever we are seeing new laws to address the legal rights of a potential new hire when it comes to his/her criminal history.

There are two current federal protections in place to shield job applicants from discrimination based solely on an arrest and or conviction history. I.e. :

Federal Protections for Applicants With a Criminal Record

– Title VII: Discrimination Based on Criminal Records

Title VII of the Civil Rights Act of 1964 prohibits discrimination in every aspect of employment, including screening practices and hiring. Because arrest and incarceration rates are higher for African Americans and Latinos, an employer that adopts a blanket policy of excluding all applicants with a criminal record might be guilty of race discrimination.

– The Fair Credit Reporting Act: Inaccurate Records

The federal Fair Credit Reporting Act (FCRA) addresses the issue of inaccurate criminal records. Criminal background checks may include errors, such as information on convictions that have been expunged, multiple listings of the same offense, incomplete information (for example, failing to report that the person was exonerated of a crime or that charges were dropped), misclassification of crimes, and even records that belong to someone else entirely.

The FCRA imposes obligations on employers who request criminal background checks and on the firms that provide them. Employers must:

  • Get the applicants written consent ahead of time.
  • Notify the applicant if the employer intends to disqualify him or her based on the contents of the report. The employer must also give the applicant a copy of the report.
  • Give the applicant notice after the employer makes a final decision not to hire him or her based on the information in the report.

Each state also has employment laws on the book in regard to hiring those with a criminal past.

New York Law on Use of Criminal Records

New York gives applicants a number of protections when it comes to employer use of criminal records in making hiring decisions. Employers may not ask about or consider arrests or charges that did not result in conviction, unless they are currently pending, when making hiring decisions. They also may not ask about or consider records that have been sealed or youthful offender adjudications.

Employer with at least ten employees may not refuse to hire an applicant based on a criminal conviction unless hiring the applicant would pose an unreasonable risk to property or to public or individual safety, or the conviction bears a direct relationship to the job. The law defines a “direct relationship” strictly to mean that the nature of the criminal conduct underlying the conviction has a direct bearing on the applicant’s fitness or ability to perform one or more of the duties or responsibilities that are necessary related to the job.

An employer that considers an applicant’s prior conviction must look at these eight factors:

  • the state’s public policy to encourage the hiring of those who have been convicted of crimes
  • the duties and responsibilities that are necessarily related to the job
  • whether the conviction has a bearing on the applicant’s ability to perform those duties and responsibilities
  • how much time has passed since the conviction(s)
  • how old the applicant was at the time of the offense
  • the seriousness of the offense
  • any information the applicant provides about his or her rehabilitation, and
  • the employer’s legitimate interest in protecting property and the safety and welfare of individuals and the public.

An employer who decides not to hire someone based on a criminal conviction must, upon the applicant’s request, provide a written statement of the reasons for the decision. This statement must be provided within 30 days of the request.

Look here for state-by-state hiring regulations and information as they relate to applicants with a criminal history.

BNI Operatives: Situationally aware.

As always, stay safe.

Business & Employee Background Checks – Know Your Partners, Employees & Vendors.

fingerprints

If you run a business, you have lots of worries.  Aside from the normal concerns like competition, pricing, R&D/marketing, location and customer service,  security issues  have become increasingly important.   Instinct can only take a business owner so far in assessing the work relationships in which he becomes involved.   A businessperson can run up against:

  • Employees with compromised criminal/civil litigation histories
  • Prospective partners who are less than truthful about their business (and related personal – divorce, child support, etc.) histories
  • Theft
  • Fraud
  • Embezzlement
  • Scams
  • Unscrupulous suppliers/subcontractors

In looking at the statistics of employee theft alone:

“In a recent [2014] survey of small businesses, a University of Cincinnati criminal justice researcher has found that only 16 percent of those that have experienced theft by employees actually reported that theft to the police.

That’s even though 64 percent of the small businesses surveyed reported experiencing employee theft.”

Increasingly, security tech companies pitch IT monitoring systems and control to business owners as the most effective means of controlling today’s work environment as it relates to corporate crime.  Now let’s look at the reality:

detection

The vast majority of business thefts, embezzlements and frauds are uncovered by tips, audits and by accident. Accepting these statistics as fact borne over time, what does the employer do proactively and reactively with workplace crimes?

Employee Background Checks Provide the Answer

Certainly there are many free online tools of which prospective employers can avail themselves to research their employees backgrounds, but such a search should just be a cursory check, pre-hire. Working with an experienced investigator will yield formerly-hidden information as the professional background checker knows what to look for and where to look for it  – often in databases that are not easily available to the general public and through a process of key data analysis that can only be borne of experience, inclination and talent.

Here are the types of things a business owner can and should be looking into for the protection of his business:

Criminal Background Checks

Any time your business is dealing with someone you don’t know, you should run a quick check to see if they have any history of criminal activity. It’s very simple to find out about criminal records, FBI records, prison records and sex offender status.  There is access to their entire criminal history if there is one. With violence in the workplace such a major issue, a simple criminal check can be a very effective way to avoid problems before they happen.

Background Check for Employment (Pre-Employment Screening)

If you’ve got a small business, you should be pre-screening each person you consider hiring. No matter how professional, or how harmless, they appear.

A small print shop franchise in Florida hired an especially friendly fellow as their bookkeeper after the owner got too busy to handle it himself. The new employee didn’t offer much in the way of references but he sounded like he knew what he was doing and – big plus – he agreed to work cheap. The owner figured he would save money hiring the guy. He figured wrong.

The bookkeeper drained more than a hundred thousand dollars out of the company before they found him out. Turned out he’d previously been charged with embezzlement.  This is something a criminal background check would have quickly turned up. (Tip: Your investigator should know the positions sought by would-be new hires.  If a crime is directly related to the employee’s duties, [e.g., previous theft charges/accounts payable job], that history would certainly be a direct factor in the hiring decision.)

Background Check Existing Employees – Make it a Condition of Employment

You shouldn’t check only new hires. Over time, employees can develop habits and get involved in activities you’d never suspect. So you should regularly check on existing employees. Note: this is something you should get legal advice for – but generally if it’s a condition of employment and you let them know in writing, it’s not invading privacy. You entrust employees with company funds or materials that can be stolen, or negotiating and purchasing power that can be abused. Keeping an eye on existing employees is just being prudent.

Run a Background Check on Each Company or Individual You Do Business With

You should investigate every supplier or contractor who serves your business. If the possibility of harm exists, then you need to know if someone you’re in business with is likely to harm you. You can check credit, check backgrounds of the owners and managers, check the company itself for any past criminal or questionable activity.

Run a Background Check on Each Partner With Which You Intend Do Business.

Here at BNI we’ve worked with numerous matters involving prospective and current business partners.  Our clients come to a realization during our investigations that either the partner is upstanding or s/he is seeking a working relationship that is covertly dishonest due to personal and professional issues, (i.e., expensive divorces, costly child support litigation, past debt, etc.)  Especially those who are very close to your business  – your means of support –  should be thoroughly vetted and, moreso after the partnership is active and red flags begin to appear.  Our intent and focus during partnership investigations are on collecting information that can be used in potential criminal and civil litigation.

I’m not relating anything in this post that you, as the business owner, have not already considered or experienced but I’ll add the important point that with today’s tech tools, conducting this type of business due diligence is cost-effective and results-effective and is easily set up on an as-needed scheduling basis.

Given the increasing transiency and mobility of our work relationships, it is smart to proactively protect your business, rather than the latter, often very expensive clean-up required in the aftermath of personnel failure.

BNI Operatives: Situationally aware.

As always, be safe.

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