NATIONAL REPORT--The U.S. Department of Justice reports that one out of every 32 adults is a criminal, and that two-thirds of criminals end up being rearrested within three years after release from prison.

If you hire applicants with criminal records, you might end up in trouble because

of a legal concept called "negligent hiring." This is an employer's obligation not to hire applicants whom they knew or should have known might undertake conduct against other individuals or otherwise subject employees or third parties to actions that can create legal liability. For example, if you hire someone who has a history of criminal behavior, and if this employee accosts a guest in your hotel, you can be sued by the victim and/or his or her family under the negligent hiring concept. According to American DataBank, a third-party screening company, employers lose 72 percent of all negligent hiring suits.

Companies that routinely use third-party screening services find that they can weed out undesirable applicants before they end up being hired. According to American DataBank, 45 percent of all applicants that clients send to them for screening have either a criminal record, a bad driving record, a workers' compensation claim or bad credit history.

Where do rejected applicants go next for employment? They gravitate toward employers who don't do background screening. In sum, if you don't do background screening, there's a good chance that a disproportionate percentage of your work force is composed of individuals who were rejected, or knew they would be rejected, elsewhere for criminal, driving, credit, or workers' compensation problems.

A recent survey conducted by the Society for Human Resource Management found that more companies are focusing on formal background checks of applicants in response to increasing levels of employee violence in the workplace. In 1996, 51 percent of HR managers conducted criminal background checks. Today, 80 percent do. In 1996, 19 percent conducted credit checks. Today, 35 percent do.

Employment screening can be done legally under the guidelines of the Fair Credit Reporting Act. Most screenings focus on criminal history, driving record, credit history, workers' compensation claims and Social Security number verification.

If someone has a criminal conviction or driving conviction, that doesn't mean you should never hire that person. For example, an applicant in his 40s who had an offense that occurred in his teens and has had a clean record ever since might not be a bad employee. It is a judgment call on the part of each employer to determine just how relevant a criminal record is, based on the number of offenses, the types of offenses, the seriousness of the offenses and how recent they are.

In certain instances, however, there are laws that will prevent you from hiring individuals with certain criminal or traffic convictions for certain job positions, as well as implied employment responsibilities. For example, certain offenses, such as battery, can almost always be grounds for refusal to hire, since it is a form of violence, and employers have a responsibility to prevent violence in the workplace.

A Social Security number verification will help you identify false numbers and identities used by applicants who are trying to evade screening of their own personal history. If you find that the Social Security numbers don't match, you have someone who either wrote down the wrong number (possibly an honest mistake), or someone who doesn't want to be traced.

In terms of the credit check: "If a person is in enormous debt, he or she may be tempted to steal money or inventory from your company," said Louis Rovner, president of Rovner & Associates, a Woodland Hills, Calif.-based company that provides human resources consulting.

However, it is not necessary to seek credit information unless the employee could affect you financially, such as having access to funds, credit card information or having a gasoline credit card, according to Barry Nadell, president and co-founder of InfoLink Screening Services, a third-party employment screening company based in Chatsworth, Calif.

Applicants having filed one or more workers' comp claims with previous employers shouldn't automatically disqualify them from employment. For example, there are some individuals who make a living through workers' comp scams. On the other hand, there also are honest workers who are simply accident-prone and routinely get injured.

The best way to screen for workers' comp claims is to look at the names of the employers on the third-party screening report where the applicant filed claims. Compare this list of employers with the names of the former employers the applicant listed on your employment application. If you find that an applicant failed to list one or more employers on your application whose names appeared on the third-party screening report, it is pretty good evidence that the applicant didn't want you to know about the previous claims. The failure to report this on the application is sufficient grounds (falsification of information) to dismiss the applicant.

"In other words, you don't need to rescind an offer because they filed workers' compensation claims, but rather because they falsified the application," Nadell said. "If an applicant does list all employers where he filed claims, and if you are still considering hiring the person, then you need to make sure you can offer the person 'reasonable accommodations' based on their previous injuries."

When you receive a screening report, check it against information on the application. Again, if the information doesn't match, you can reject the applicant for falsifying the application. The screening company cannot offer you advice as to whether you should or should not hire someone based on the information it provides you. It might be a good idea to have your attorney provide you with guidance on relevant information you receive from the report.

hmm@advanstar.com