But I thought you checked?

Case involving Red Cross workers who stole $200,000 from Katrina victims underscores importance of background checks for temp workers

Temporary employees can help employers meet their staffing needs. They’re often used to address staffing shortages, cover holidays and maternity leaves and, more generally, accommodate workload peaks and valleys on an as-needed basis.

But do employers really know the background of the temporary employee the agency sent? Can the employer be confident the temp has the skills and education it requires? How can an employer be sure temps don’t present a risk to the organization?

While a number of Canadian temporary agencies perform some types of background checks on their staffing pool, others don’t — except, typically, for reference checks — unless clients request them.

Employers can be at risk if neither they nor the agency conduct the appropriate background checks. In one particularly egregious case, the American Red Cross found itself splashed across news headlines when 49 temporary workers it had hired through an agency were charged with stealing at least $200,000 US meant for victims of hurricane Katrina, the deadly storm that devastated New Orleans in 2005.

Although the Red Cross had a policy of ordering background checks, and the temporary agency had a practice of working with its clients to set up employee screening standards, the special circumstances in the aftermath of the hurricane, combined with the urgent need for workers, led to background checks not being performed in all cases. Clearly, the results were both publicly embarrassing and hurtful to victims who urgently needed aid. In another example, 28-year-old Christina Appleton was stabbed to death in California in August 1990 by co-worker Arvie Carroll, a convicted murderer placed with Iron Horse Vineyards by a temporary agency that had not conducted a background check.

By working with temporary agencies to understand their background checking practices and by developing a well-considered background checking policy of their own, employers can reduce the risks associated with using temporary employees.

Types of background checks

There are many types of pre-employment background checks or tests available to employers and temp agencies. These include reference checks, education/professional certification checks, credit checks, psychometric tests, medical tests (including drug and alcohol tests), criminal records checks, immigration and terrorism checks and Internet searches.

Some background checks, such as reference checks and education checks, help ensure applicants are qualified. Other checks, such as criminal records checks, reduce the risk of hiring a job applicant who poses a risk of criminal activity. Tests such as psychometric or skills tests will help employers determine whether a job applicant is a good “fit” within the organization.

Of course, not all background checks will be suitable for every position within an organization. Because any background checking process must comply with human rights and privacy laws, employers should be judicious in determining which checks and tests are appropriate for a particular position.

Human rights and privacy laws

Human rights and privacy laws play important roles in the background checking process.

Human rights laws across Canada prohibit discrimination during the hiring process. Background checks may reveal an applicant’s age, disability and other characteristics protected by human rights legislation. For instance, a university transcript may show a person’s date of birth and a medical test might reveal an applicant’s disability. A rejected job applicant may allege — if an employer or temporary agency has received this type of information during the background checking process — that he was not hired because of those characteristics.

To reduce the risk of human rights complaints, employers and temp agencies should perform most background checks only after a conditional offer of employment has been extended. This way, rejected job applicants who have not been background-checked cannot use the checks as ammunition for a human rights complaint.

Privacy laws also play a role as almost all background information on a job applicant will be “personal information” under privacy statutes. The Personal Information Protection and Electronic Documents Act (PIPEDA) applies to personal information of employees employed in federally regulated companies such as railways and airlines. British Columbia, Alberta and Quebec each have their own private-sector privacy legislation that applies to all provincially-regulated employers in those provinces. In those jurisdictions, employers have the additional obligation of ensuring there is a reasonable basis for collecting background information.

For example, the Alberta Privacy Commissioner found an employer violated Alberta’s Personal Information Protection Act because it was unreasonable to require a credit check from a person applying for an administrative assistant/receptionist position.

In the remainder of the provinces, although in general provincially regulated employers are not bound to apply PIPEDA with respect to employee information, there are “best practices” that all employers and temp agencies should consider following. These include obtaining express written consent to collect personal information from job applicants, identifying the purpose for which the employer is collecting the information and then collecting, using and disclosing that information only for the purposes for which it was collected in the first place.

By putting careful thought into the background checks required for each position and by working co-operatively with a temporary agency in understanding its background checking practices, employers who make use of temporary employees can work to reduce the risk of bad temporary hires.

Christina Hall is an associate and Adrian Miedema is a partner in the employment and labour group of Fraser Milner Casgrain LLP’s Toronto office. They are the co-authors of the HR Manager’s Guide to Background Checks and Pre-Employment Testing (published by Thomson Carswell), which was profiled in the National Post in January 2007.

Checking up

Tips for employers using temporary employees

• Don’t assume the temporary agency has done all the necessary background checks.

• Carefully evaluate each position for which you are hiring candidates through a temporary agency and consider which background checks are appropriate for that position.

• Understand the agency’s practice. Ask the agency which background checks it provides as a matter of course and which additional checks it will provide on request.

• Request a copy of the agency’s background checking policy.

• Ask the agency about the practices and procedures it uses for performing each type of background check.

• If the agency has a standard background checking process, consider whether your organization wishes to supplement that practice with additional background checks.

• Ask the temporary agency for a written report on the individual’s background check for your records, if the individual consented.

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