7 Things You Need To Know About Background Checks

Avoid the common pitfalls of instant searches and the risk that result from incomplete background checks. In this premiere episode of Information Is Power, Jonathan Kraut of Net Check Investigations and Bill Stierle talk about background checks as they highlight the importance of the employee screening process and debunks the myths around it. Join Bill and Jonathan as they unwrap the seven things you need to know about background checks.

Listen to the podcast here:

7 Things You Need To Know About Background Checks

How To Conduct Effective Tenant And Employment Screening And Background Checks

I am here with Jonathan Kraut. We’d like to talk to a bit about Net Check Investigations. We’re going to introduce you to the Information Is Power Investigations Show. Jonathan, tell us a bit about you, how you’ve come into this field and a little bit about your company.

This is about my 22nd year as a private investigator. I used to be a professor at a college. A lot of my students were not finding internship in investigation work. I got a license and put them to work. I got busy so I stopped teaching. Since then, I’ve been running this firm and trying to make sure that people are safe and they make good decisions.

It’s nice to be on this show to share your wisdom, knowledge and experience. A big part of decision making is having the right information. We’d like to share with you some information that’s crucial to employers. You will be able to pick up a lot of valuable information as we talk through the Information Is Power Investigations Show. Jonathan, tell us about the seven things that the employers need to know.

The obvious thing is when you do a thorough background check, you’ll weed out people that could do you, your company and your employees harm. There are a lot of myths that are out there and I wanted to dispel what those are. I wanted to give employers a very logical and easy way to make sure that they’re doing the right thing as far as their background check on new employees or candidates and recheck later on.

I remember that it’s important in the State of California, as well as other states, for people to know what your private investigations license is. Isn’t it a part of the process too to create trust?

The state goes through great effort to make sure that licensees are knowledgeable and follow the law. The worst thing that could happen is somebody like a law enforcement officer, government official or licensed agency uses their trust and their position to take advantage of others. We’re very careful about doing the right thing as much as we can all the time.

Tell us a little bit about the responsibility employers have to keep their people and customers safe and taking the appropriate preventative actions with employment screening.

By creating an environment, employers have a responsibility to their people and customers that the environment that people come into are safe. To do so, that includes not just their employees, but also the safety of their clients, customers, visitors and so forth. We want to protect property, reputation, privacy and physical objects from being misused.

Do they also have other responsibilities?

Besides the physical premises, you’re talking about the welfare of individuals that may be exposed to let’s say you bring in a stalker or sex predator into your workplace. That could have a great impact and negative impact on other people working in your company.

The screening process is important.

In addition to the safety of your employees, employers are responsible for their clients and customers. For example, you hire a cashier who has a drug issue, drug problem or embezzlement habit, they could steal the private information of their clients, their social security numbers and credit card information. You want to make sure that the people you bring into a setting have at least the certainty that there’s nothing in their criminal record that would indicate a habit of misconduct.

There’s a duty to check in with them.

In addition to the initial duty to check-in, you want to have a bi-annual recheck. There are individuals who perhaps weren’t caught, arrested or convicted prior to being hired. Because of the way that they think or behave, maybe after they were hired and entrusted with certain responsibilities in certain information, the history will show up later. They could be convicted or arrested after they were hired. You want to check for that as well.

We’re getting to why proper background checks are critical then.

Doing background checks is weeding out people that could do you, your company, and your employees harm. Share on X

I’ll give an example. In Burbank where our office is located, a property management company hired a janitor. They did a California search for criminal records. They didn’t find anything. They handed to the janitor all the keys to the property. It’s a multi-unit. They have 100 to 200 residents in the property. They didn’t know the true history of the janitor.

Even though they didn’t know the history of the janitor, they’re still responsible for that as a business owner.

In this case, what happened was the janitor, who is a sexual predator, was convicted in another state. He had an arrest warrant from that other state. It did not show up in the California system. Therefore, he had access to all the keys. One day, he entered into a unit where a young girl was alone. She was thirteen or fourteen years old. He assaulted and raped her. A court case arose that finally resulted in a multimillion-dollar penalty and fine charge to the apartment complex. By allowing someone to come in who was known to be from another state, to not check their background thoroughly was an issue.

There are all kinds of challenges here if you’re doing a limited local search. It’s the responsibility of the employer or the business owner to follow the state-licensed screening agency and this whole misconduct search.

If they did a comprehensive misconduct search, it would have taken minutes to realize that the individual had lived in another state. If they check for records in that state, they would have found a warrant. They would have found that he was a sexual predator. They would have found that he was already convicted for the same kind of crime.

Imagine what it would be like then to have one of these events where people show up. We’re interested in getting the protection, the safety and the thoroughness that your company advocates.

It’s very important that employers know what they can do to protect their company, their employees, their customers and defend against liability and risk.

Myths About Employment Screening

As we get started, there are certain things that people believe are true that are not true. Could you take us through the different myths that people have about employment screening?

Relating to the last example that I gave, myth number one is that a state live scan is comprehensive. In reality, the live scan only checks the state that you’re in. It does verify fingerprints and it does go into the FBI system, but it does not check the other states. It does not look for warrants. It does not locate issues or events that are non-criminal that are very relevant.

It is very light and it doesn’t do the thoroughness that you advocate.

It does check the state that you’re in and the FBI records, which is part of it. I’ll give you an example of how a live scan led to the injury of other people. An individual purchased a weapon in Aurora, Illinois. There was a National Instant Background Check through the Brady Bill. It did not locate a relevant criminal case out of Mississippi. The reason would be that a lot of states voluntarily contribute to the system, but there’s not one push-button index where all the criminal records are kept. His name is Mr. Martin. When he applied for a concealed weapon permit a little bit later, after he purchased a firearm, a case was located. The FBI estimates that about 29% of all adults have a criminal record. About 9% are felons. If the National Instant Background Check System was adequate of the 230 million background checks, about 23 million criminal records would have been identified instead of the 1.3 million that have identified. In other words, even the Federal Instant Background Check System for purchasing a gun missed about 22 million criminal cases, which is terrible.

That is not good. The thoroughness is interesting. The first myth is that the state live scan is comprehensive and we’re seeing that not to be true.

When Mr. Martin tried to get a concealed weapons permit, a five-minute skip trace and a hand search found that record in no time. While an instant search through the federal government or the state is good in some cases or partially helpful, a hand search would have found that record instantly in a matter of minutes.

Since he got the weapon, he shot several coworkers.

He shot his coworkers. I don’t know if he killed anybody, but he hit four. It’s because he had access to a weapon that was cleared through an instant state live scan search.

Background Checks: It’s important that employers know what they can do to protect their company, employees, and customers.

What’s the second myth? It says all criminal activities are filed at the criminal index. Tell us a little bit about the first part of this myth.

The criminal records include lots of different statuses. For example, they are dismissed, diverted, convicted. They need interpretation. A person who’s diverted and not convicted due to drug use and who is in rehab, may not show up as a criminal conviction. It’s illegal, in some cases or in many cases, to refuse to hire someone because they’re in diversion. They’re not going to be working for a pharmaceutical company. That would be a mistake and their requirements are a little different from a cashier. We used dates of birth and name to identify somebody. If somebody lies about their date of birth, you may not find it. A lot of the cases that are in the criminal index system are not reportable. It means it may show up through a search, but because it’s been diverted or dismissed, it cannot be used against the person in most cases.

You’ve got to take a look at this myth to make sure that it includes some of these other elements that a person doesn’t want to hire.

Criminal indexes don’t include something related to or commonly related to domestic violence, harassment, stalking, elder abuse and child abuse. Often, those are not in the criminal index. They’re kept in other indexes.

The thoroughness is checking these other indexes, not just one of them.

If you rely on the criminal index only and you use whatever you find, first of all, a lot of it is not admissible. The parts that are admissible may be incomplete.

Take us then through myth number three, the jurisdictions. This is something that I had a little bit of confusion about but after talking with you, I’ve got a little more clarity about it.

Jurisdictions vary by level. You have federal jurisdiction, FBI records, local and county records, stayed incarceration and probation. They’re kept separately. There is no one place where the records of all the counties, all the states and all local jurisdictions are kept. Each jurisdiction that applies must be searched separately. Even sex offenders by state, which may not be kept at the county level, maybe at the state level.

There are a few different indexes to trace down to get the thoroughness that an employer would like. Are medical-related things also separated?

Sometimes, medical records are not included in the other records. There are different systems to check for medical professionals as well.

A little bit of bureaucracy for someone that understands or has the experience of knowing which rock to turn over. You know which rocks to turn over. Is that what you’re saying?

We do. I assume that licensed investigators who make their business as background checks and screening would know. You’d be surprised that a lot of my fellow professionals don’t do background checks. They don’t know what I am disclosing.

Even they would have a lot of assumptions as I did about some of these myths that I would buy into, “They did a background check.” It’s like, “What kind?”

In fact, what disturbs me and one motivation for making this show is I watch on TV and hear on the radio, “Our people were background checked.” What they mean is they did an instant search online. Myth number four would be that an instant search online is sufficient. It is not sufficient.

I was thinking about the database is not sufficient. As I started thinking about it, the fine-point or disclaimer are not necessarily in play here.

It is better to be slow and accurate than fast and wrong. Share on X

If you go online and do an instant search, look at the disclaimer. It usually will say, “Do not use for employment purposes. It is for entertainment purposes only.” It does not meet the Fair Credit Reporting Act, which is our umbrella legislation. Firms gather information from different counties and different states. They compile a phonebook of all the records they have. When they do an instant search, what they’re telling you is any record that we have, we will find. They’re not making a promise that they’re checking every jurisdiction. They’re promising that if you put in a name and the date of birth and it’s in their index, they’ll find it. The sad part is that about 80% of criminal records are not in these databases. New cases aren’t there. Arrest warrants aren’t there. In fact, most county information is not in this index. It’s basically updated every few months, maybe every year. A lot of county information like LA County is not in these indexes. If you’re paying $10, $15 or $20 to do an instant search, know that you cannot be accessing all live and real information instantly. It’s not possible.

It’s not going to cover your employment due diligence.

It does not protect the employer and does not find out valuable information.

Is it because the court is not quite connected to it fully?

Even if you did find cases through an instant search. You need to verify with the court that the information is accurate. You can’t rely on a database.

There’s a big difference. It doesn’t constitute a valid search.

No, the courts have ruled that an instant search is insufficient. The employer can protect themselves from doing a comprehensive search.

This brings us around to myth number five. Once a background check is performed, the employer’s obligation is fulfilled. Tell us some of the time limitations or stamps or things that the employer needs to know to keep themselves up to date.

For many years, my firm has done hundreds of thousands of background checks. Our experience is not only should companies re-screen, but about 3% of those who are re-screened have new cases that occurred after the time that they were hired. Typically, we re-screened every other year, a biannual re-screening. Even then, 3 out of 100 have new cases. New issues include drug use, embezzlement, fraud, all kinds of things that you never think of, assault with a deadly weapon, sex, predatory crimes that occurred after they were hired.

It seems like the employer needs to build a system of reliability to cover their due diligence or their protection and their obligations in this area.

When an employer hires somebody, the original agreement should be something authorizing periodic re-screening so that the employer doesn’t have to go back and get a new authorization every couple of years.

Things To Know About Background Checks

As we went through the myths, it loops us back around to the topic of this show, which are the seven things employers need to know about background checks. Why is a comprehensive background check needed and what they must know? Could you walk us through the seven things so that we can get a sense of what the employers can do? That way at least we’ve got a level of awareness and consciousness about how to get this thing done.

By knowing the myths, our readers understand that there are more than one door to open. On average, there are about twelve different indexes to be searched. If you do an instant search, you open one door. If you do a live scan, you open two more but you’re still missing more doors. Imagine twelve doors to be opened to find out what someone’s history and record is and you open only three. Anything could be behind the other nine doors. Let say you have a twelve-wheeler truck. You need twelve tires. You go into the dealer and you say, “If I buy one, is it cheaper?” They’ll go, “Sure, here’s one.” That’s the same as doing an instant search. You still can’t drive it away. You do a live scan or a state search, you get two more tires, you can’t still drive it away. We’re very excited to share to your audience that to do a comprehensive search, you need to check all twelve places. Number one is the first thing employers need to know is there are twelve different indexes or searches to be conducted.

Tell us about the second thing. The only licensed agencies are authorized. Help me with that.

What distinguishes a private investigations company from others is that we’re licensed to acquire private information, not open to the public. We can assess character. Your computer or your instance search cannot assess character. Who would testify in court as to what they found? The computer? We had the ability to do what’s called a skip trace, where we use confidential means to verify someone’s date of birth, their social, other names that they have used and where they’ve lived. Having access to that gives us a lot of information. Believe it or not, convicted criminals often lie about their date of birth.

Background Checks: Directly accessing the system can often be the only way to access people’s records.

Why would they ever lie?

They know that if you run the date of birth you gave them, they’ll come up clean. A licensed agency is going to find that. They are going to check every date of birth, whether they gave it to us or not. Every name that shows up whether they gave it to us or not.

It is not available to the public unless you have the license.

That’s why an online search is not going to give you a lot of good information. Especially, it may give you lots of names that don’t belong to them. Lots of do it yourself. You’ll see, if you go to one of the online searches about yourself, a lot of stuff is there that’s not accurate. We want to search every date of birth and every known name in every jurisdiction where they’ve been located, which goes back a number of years.

This whole assessment of character, how does that work?

Assessment of character means should you hire them or should you not base on the record that you’ve found? We can make suggestions to employers. It’s is still up to them. Our report is going to be on letterhead and that goes in their file. We don’t decide if someone should be hired, but we’ll provide information. The employers will ask us, “What do you think? This guy has been convicted five times of DUI. Should we allow him to be one of our delivery guys?” We say, “What’s it look like if there’s going to be a six or seven? He’s not learning. It is a great risk. Why not find somebody whose record is clean?”

What is the liability or lower in the insurance? How does that work?

If certain practices are followed and a licensed agency is conducting a comprehensive search, most insurance companies with liability insurance will give you a discount. I’m very delighted to share with the clients if you want to call me and ask me how that’s done. It’s a little bit complicated, but we show them what we do and how that helps them lower the liability risks for the company. Insurance companies are all about mitigating costs.

If they got a thorough search and the validation of that, I could see how the insurance company would then give them a lower rate. That makes a lot more sense to put protections in place. In the third part of this thing, there are many records that can only be accessed locally. Tell us a little bit more about the network.

We do searches nationally. We have access to every court system in every county and every state. Anyone doing your background check should do that. A lot of records only could be accessed locally, meaning someone has to walk into the courtroom, sit down at the computer or hand the court clerk a list. That’s the only way to get a record if that person has something or not that we should be concerned about. Not only can you not access these from the internet, but you can’t access the mystery. It takes maybe two or three days, but usually three days for that information to come back. There are fees associated with that. Some states charge $6, $10, $15 for a comprehensive criminal or civil records search in that state. You’ve got to do it correctly or you’re not going to get information.

Do you also have access to these agents that can do hand searches?

We have a network of agents in every county, in every state that can do a hand search and make sure that there’s nothing in that record or in that file. If it’s reported back to the clients so they know exactly what’s going on.

You know what they’re getting themselves into.

You’ve got to connect with the court data system directly, not through an index, which is compiled periodically or may be completely missing. The only way to know is if we directly access that system.

The fourth tip for employers is the most active warrants are kept by the County Sheriff’s Department. Tell us a little bit about that.

Someone could have an active warrant for their arrest, which is not in the criminal index of the county. That arrest warrant may not be kept in the criminal system. Probably in some cases, it would only be kept by the Sheriff’s Department. Unless you check with the Sheriff’s Department, you would not know if a person has an active warrant in that county. Obviously, that’s an area to be checked. It may not be in the criminal index system.

There are different processes to go about this search.

Let’s say somebody was pulled over and ran off. They know who it is. They’ve got their fingerprints from the car. They have a picture of the person, but since they’re not arraigned, they may not be in the county or local criminal system yet. It’s just an arrest warrant.

That’s a big difference. There is some misconduct in number five. Tell us a little bit about the misconduct that is not in the criminal search.

One of the most important messages of this episode is that a lot of misconduct is not in the criminal system. An example is civil harassment and stalking. They are usually kept in the civil system. Orders of protection, restraining orders may be considered domestic or family law. Domestic violence may not be kept in the criminal system. A tragic story is one of our clients said, “This guy has nothing in the criminal record.” The judge said, “He’s a good guy. There’s nothing to go back on.” The woman had heard of something that had happened in a different county. We checked for family and domestic records and we found that this guy had a restraining order, violation of orders of protection and stalking charges. All these were in the civil system and the family law system. We brought these cases to the court. It changed the whole outcome of the case. That’s because we didn’t depend on the criminal system for finding criminal information.

This is probably the one that bothers me the most. People’s mindset thinks criminal and don’t think domestic or don’t think that there are these different buckets that you’ve got to check or these different tires that you’ve got to put on. They might not be represented by the person that you’re in front of.

That reminds me, elder abuse and child abuse are generally not reported in the criminal system. I don’t know why. A lot of counties put it under family law or domestic. You could choke or take advantage of someone who’s related and that may be considered a family dispute and not a criminal case, although it’s very relevant. Also, you have military records, which are not in any county or federal system. There’s a completely separate index conducted by a different agency, a military agency. Any misconduct or unfavorable discharge might not be in the criminal system. That might be in a different system.

Tell me about this FCRA compliance. Tell me a little bit about why an employer needs to know that.

The Fair Credit Reporting Act, which we call FCRA, has outlined the duties and requirements that credit reporting agencies like us, private investigations companies, which go beyond credit. What they need to do? It gives them some rights or authority to an individual whose background is being checked. A credit reporting agency has to get authorization either from the individual or there’s a court case. We need something to go with in order to look at someone’s private information. We can’t just go run it because we want to. When we file a report with the company, we give them the results of our background check, for example, signed on our letterhead. Why it’s signed is so then the employer knows who did the work and who could be called to testify if it comes to that.

The testimony is important. The signature is that next level of verification because a real live person is doing it.

All our reports are signed by an individual. We know who that individual is. If there’s an issue, we can go back to our agent and say, “How did you conduct it? Where did you go? What agents did you employ to county by county to do the work?” We want to make sure that it’s traceable and that we can go back. You can’t bring a computer to court to testify. There should be an individual who did the work, the research, the hand search, the skip trace that can say exactly what they did.

Do private investigators show up in court and do the testimony thing?

If needed. I’d say that of the 400,000 or 500,000 background checks we’ve conducted, we hardly missed anything. Although, a couple of times, somehow we have. Maybe we’ve typed in something wrong, but we’ve never had a case related to any misconduct or something that we missed. A couple of times, we’ve found that we did on our own when we do a recheck. Not often, maybe 1 in 100,000 that something didn’t show up or maybe it wasn’t in the court system then and it is now. We’re very patient and careful. We’d rather be slow and accurate than fast and wrong. We have to verify with the court an FCRA requirement to verify a case with the court directly that it’s accurate. The date of birth and the name is right.

Once this is a signed authorization from the candidates, it allows you to be in compliance or thereabouts.

The job candidate should sign an authorization and allow us if there is an error to give them the information, which is free, to go back and say, “That was my twin brother. It’s the wrong date of birth. He has my date of birth and my name but it’s not me.” We’ve had that. A candidate has to have the right to go back and challenge your results. At times, the court data is wrong.

Background Checks: Employers take on tremendous responsibilities to risk because the penalties of not doing a complete background check are very high.

We’re coming up to number seven because we are doing the seven things. The employers have a duty to periodically recheck and re-screen. Tell us a little bit about that.

About 3% of those that we recheck have new cases that were filed and convictions that were filed after they were hired. We recommend that all employers re-screened every two years. In some cases like medical facilities, elder and childcare, those who handle money, credit card information, pharmaceuticals, you want to check that annually. You have a duty to your clients for the safety of privacy and the people that they’re caring for that you recheck more confidently and more often.

We’ve run through a whole bunch of wonderful information. Take us through a little bit of the summary of this thing and walk us through what’s at stake here.

First, employers take on a tremendous responsibility to risk and the penalties of not doing a complete background check are very high. We wanted to bring that up and let them know. Using a licensed agency will reduce this exposure for workplace and employer liability. Knowing the myths about that should enlighten our employers as to what they should or should not do, especially when it comes to background checks. Next, we want to say that if you understand how a background check is performed, it gives the employer a lot of choices and a lot of information so that they don’t make mistakes that could hurt them. While a background check only may take three days to complete, we’d rather take our time and get it right than hurry up and get it wrong. A comprehensive search will protect employers and workplace and reduce the risk from liability.

For more information about ways Net Check can help support employers, where should we go? What should we do? Give us a website.

Anyone who wants to ask me questions about this information or others, I’d be happy to share. The more information you have, the better. The information is free, we want to help you. Our website is NetCheckPI.com. There are a lot of valuable tools and information, videos and podcasts on there. To our employers out there, remember Information is Power. Good decisions start with great information. We want to give you great information. We want you to be powerful and be successful and take the steps necessary to make sure your workplace and your future looks great.

This has been great. This has been a journey for us beyond a little bit. I feel grateful that you asked me to ask you questions about it. I sure have learned a lot about this. I’m looking forward to do the next one with you. We’ll be able to provide employers, business owners and individuals that are looking to have a private investigator work for them and support them and getting their needs for protection or privacy or information and ways that you can help them. Are there any closing thoughts or things that you’d like the readers to know?

You ask an expert, I wouldn’t say that I know everything about everything, but I know a lot about background checks. I’m very happy to help out. I want everyone to be safe. I want to hold people responsible for the misconduct they’ve performed. It’s only fair that good people with good histories are given a chance first. If you only knew now what you knew then or you knew then what you knew now, either way. That’s why you want to recheck all the time and why you want to be thorough in your background checks for employment.

Jonathan, thanks for sharing your information with others and more to come.

You’re welcome, Bill. Thanks.

Take care. Bye.

Important Links: