Background Screening Terminology

Hiring new employees can sound like a straightforward process of collecting a few resumes, conducting interviews, checking references, and choosing the right candidate. But you would probably laugh at (or kick) anyone who would suggest that being a hiring manager is easy. Even in today’s economy when available talent is more plentiful, the complex legal environment surrounding employment, the strategic side of human capital, and the risks involved throughout the selection and employment process make it anything but simplistic.

And let’s face it: Not all managers are experts in recruitment, selection, employment law, employment background checks, human capital risk management, and other disciplines that affect their jobs. To make up for gaps in our knowledge, and the fact that we only have two arms and 24 hours in a day, most managers rely to some extent on outside vendors to handle employment-related tasks. Employment background screening is one such task.

But dealing with outside vendors who are experts in their fields can sometimes mean you’ve got to learn a whole new set of “lingo” in order to communicate with them. To help you out, we’ve compiled some basic employment screening terminology. (For a surefire way to impress the boss you can rattle off some of these definitions at your next staff meeting.)

Consumer Report: The FCRA defines a consumer report as any written, oral, or other communication of any information by a consumer reporting agency bearing on a consumer’s credit worthiness, credit standing, credit capacity, character, general reputation, personal characteristics, or mode of living which is used or expected to be used or collected in whole or in part for the purpose of serving as a factor in establishing the consumer’s eligibility for employment purposes and other purposes as outlined in the Act.

Investigative Consumer Report: The FCRA defines an investigative consumer report as a consumer report or portion thereof in which information on a consumer’s character, general reputation, personal characteristics, or mode of living is obtained through personal interviews with neighbors, friends, or associates of the consumer reported on or with others with whom he is acquainted or who may have knowledge concerning any such items of information.

Consumer Reporting Agency: FCRA defines a consumer reporting agency as any person which, for monetary fees, dues, or on a cooperative nonprofit basis, regularly engages in whole or in part in the practice of assembling or evaluating consumer credit information or other information on consumers for the purpose of furnishing consumer reports to third parties, and which uses any means or facility of interstate commerce for the purpose of preparing or furnishing consumer reports.(Proforma Screening is a consumer reporting agency)

Employment Screening: Employment screening, also known as background screening or background checks, are performed by employers or consumer reporting agencies to gain information and insight about an employee or job candidate in order to make predictive decisions about how the individual will perform in a given role.

Employment Screening Program: Employment screening program is the overarching agenda of an organization to implement screening as part of the employment process.

Background Screening Policy: The foundation of a background screening program, screening policies clearly state the purpose of the program, types of checks to be conducted at various levels of the organization, the methodology, and the company standards for handling and use of the resulting reports.

Background Screening Process: Closely tied to policy, the process states how the background screening program will be implemented.

Adverse Action: In employment screening, adverse action is the denial of employment or any other decision for employment purposes that adversely affects any current or prospective employee.

Adverse Action Notice: An adverse action notice is an oral, written, or electronic notice that is provided to the applicant or employee informing the individual of the adverse action that has been taken on the basis of information obtained from public records and provided by a consumer reporting agency during the employment screening process. A related term is “pre adverse action notice” which is provided to the individual before the adverse action takes place in order to give the individual a chance to respond.

Respondeat Superior: A Latin phrase meaning “let the superior answer,” respondeat superior is the legal doctrine which holds an employer, officer, manager, supervisor or other “superior” individual or group to an employee or subordinate legally liable for the acts of the employee or subordinate. In other words, employers may be responsible for the actions of the people who represent their companies.

Duty of Care: Employers have a legal duty of care, which is an obligation of employers to adhere to a standard of reasonable care when making employment decisions. Each state has tests for imposing duty of care in the event of harm. One such test is the foreseeability test (was the harm foreseeable?).

Negligent Hiring: Negligent hiring is a legal theory based on the principle that employers can be liable for the wrongful acts of their employees should the employer fail to use reasonable care in the hiring process.

Due Diligence: Due diligence is a term used for a number of concepts involving either an investigation/examination of a business or person prior to signing a contract, or carrying out an act with a certain standard of care.

Due diligence in a broad sense refers to the level of judgment, care, prudence, determination, and activity that a person would reasonably be expected to do under particular circumstances.

FCRA: FCRA is an acronym for the Fair Credit Reporting Act, a U.S. federal law that regulates the collection, dissemination, and use of consumer information, including employment screening data. The intent of the law is to protect applicant privacy and support fair hiring practices.

EEOC Guidelines: The U.S. Equal Employment Opportunity Commission (EEOC) describes its role as enforcing certain laws that are designed to prohibit an employer from using employment policies and practices that have a disproportionately negative effect on certain classes of applicants or employees, if the polices or practices at issue are not job-related and necessary to the operation of the business.

Criminal Records: A criminal record is a record of an individual’s criminal case history that is used by employers to assess the trustworthiness of the individual. Crimes reported on a criminal record are those that are prosecuted in criminal court and punishable by fines, restitution, confinement, and/or forfeiture of certain civil rights.

Arrest: An arrest is the act of depriving the liberty of an individual by taking the individual into custody, holding or detaining the individual to answer a criminal charge, or preventing the individual from performing a criminal offense.

Conviction: A conviction results when a court of law finds an individual guilty of a crime.

Acquittal: The opposite of conviction, an acquittal is a verdict that finds an individual not guilty of the crime for which the person has been accused.

Felony: A felony is a category of crime broadly defined as either violent offenses or non-violent property and drug offenses. Aggravated assault and/or battery, arson, burglary, illegal drug use or sales, grand theft, robbery, murder, rape, and vandalism on federal property are examples of felony crimes.

Misdemeanor: Compared to a felony crime, a misdemeanor is a “lesser” criminal act and is generally punished in a less severe manner. Many misdemeanor charges are punished with monetary fines or incarceration of one year or less.

Civil Records: Civil records are records of non-criminal nature. Unlike criminal law, civil law is a body of law that determines private rights and liabilities. Civil cases usually involve private disputes between persons or organizations and generally involves cases wherein one party sues another party in order to recover a right, obtain damages for an injury, obtain an injunction to prevent an injury, or obtain a declaration of judgment to prevent future legal disputes are found in the civil records.

Federal Criminal Records: Federal records contain information about federal court-level crimes that are either violations of U.S. federal legislation, or are crimes that occurs on U.S. federal property. Crimes such as kidnapping, financial fraud, immigration violations, terrorism, and drug trafficking.

Employment Verification: Basic employment verification is a confirmation from the applicant’s current or former employer of start date, end date, title, salary and eligibility for rehire. Most verifications are completed by phone but some must be handled by mail.

Identifying Information: Identifying information is the information used to distinguish one person from another. Identifying information may include social security number, maiden name, middle name, last name, account number, etc.

Judgment: In a legal sense, a judgment refers to the final finding, statement, or ruling of the court based on evidence presented to the court.

Lien: A lien is a form of security interest placed against an item of property in order to secure the payment of a debt or other obligation from the owner of the property.

Negligent Hiring: Negligent hiring is a claim made by an injured party against an employer based on the theory that the employer knew or should have known about the employee’s background which, if known, indicates a dangerous or untrustworthy character.

Sources: FCRA, EEOC, Wikipedia, US Legal