1. After reading the materials, share at least three statistics or information you found most surprising regarding background investigations for pre-employment situations. Why did you find them surprising?

2. What types of information should a pre-employment background check provide in a report to an employer? What might be inappropriate information to provide in a preemployment background check? How might a preemployment background check differ from a background check you might do for a client who wants to go into business with the subject as a partner, rather than as an employee?

3. What are your best options for obtaining accurate and current records for the following sections of your preemployment background check: Social Security/Identification Verification; Criminal History Verification; Employment History Verification; Education Verification?

Background Investigation Typologies "Background investigation" is the generic term given to an investigation of a person's past activities. In this module we will focus focus on background investigations contracted to an investigator by an employer. These are referred to as pre-employment Investigations and due diligence divided into two categories: due diligence investigations. Due diligence investigations can be . Basic due diligence investigations that are done to ensure that a current employee who is transferred or organization has the qualification ssigned to another position within the tions for the new posi 2. Financial due dilig Investigations of executives, prospective corporations being acquired for an acquisition, or individuals being brought in as a partner to an existing firm. Pre-employment investigations are background investigations conducted on an plications may have multiple purp multiple purposes. One purpose of a pre-employment investigation is to determine if there is anything in the applicant's past that would disqualify him from employment in the position he has applied for. For example, there may be a bona fide educational requirement for a specific type of degree. The investigation may yield evidence that the applicant does not hold such a degree, or the degree is from an unaccredited or sub ol. The pre- employment background investigation may also delve into past job performance, criminal records, and other well-defined areas. These areas will be discussed later in his module. Conversely, a pore-employment investigation can verify qualifications. ational qualifications, pro nian licenses, and other positive attributes can be termed. planonany, reference ched ks can provide positive information regarding the applicants past. Whether positive or negative, pre-employment background nvestigations should be unbiased and written in an objective format. Due diligence investigations include two types of investigations. The first type of due diligence investigation is a is a due diligence investigation gal and liability reasons. In this context due diligence is "the care that a reasonable person takes to avoid harm to other persons or their property". In the context of employment law the term due diligence indicates reasonable and prudent effort to provide for the safety of the firm employees and customers. Due diligence investigations of an employee or applicant are designed to protect the company from lawguns that can be gener Howany characterized as negligent hiring of hire an employee who is considered dangerous for any reason. These type lawsuits occur when the company hires an employee who they should have known is unfit for the job they are hired to perform, however the company does not exercise the normal "standard of care" in hiring the applicant. An example of this would be the hiring of an individual with a history of sexual pre ny backgroundal predation or theft to a sensitive position without performing any background check. Negligent entrustment occurs when the company "entrusts" or provides access to specialized areas or equipment of the company, and the negligent entrustment results in some form of harm to the firm's employees or customers. It is differentiated from negligent hiring in several ways. In an allegation of negligent entrustment it is not necessary alleged that the company should not have hire d the applicant at all, however the position the applicant was hired for had special access not available to other employees, and the employee is unqualified for the position, Examples of negative e five hiring an employee who has a with a company car. If the employee then is involved in a traffic collision with the entrusted company vehicle the company may be successfully sued for a crash in whi ee was involved in an company should have foreseen the possibility or likelihood of ne pungent conduct as a result of t of company assets to an unqualified additional. Another example of negligent entrustment might involve a securities company entrusting access customer's investment funds to an employee who does not hold an appropriate securities license or has a history of embezzlement. Negligent entrustment can occur with an applicant or a current employee who is reassigned to a new position. . second use of the term due diligence refers to an investigation when two firms office. This can be referred to as a financial due diligence investigation, Because of the increased access to company funds this type of due diligence investigation usually ificant investigation into the potential partner or employee's financial history. The traditional information such as employment, education, and criminal history is still performed, however this type of due diligence will include an enhanced investigation into the financial history of the subject. Frequently the investigation will not only include the subject's personal financial history, but also an investigation into how the subject handled company financial matters in prior employment. Endnotes Due diligence, Merriam Webster dictionary (online), retrieved online from http:/www.merriam- webster.com/dictionary/due%%20diligence, 7-26-2020 Understanding the Problem It is generally accepted that businesses are negatively impacted by substandard employee performance. It is also accepted that these negative impacts may be attributed to numerous personnel issues. The employee may mployee may not have the education, experience, competence or work ethic to perform the job tasks. The employee may be dishonest and engage in internal theft. The employee may engage in corruption. harassment and workplace violence. other liability concerns such as engaging in sexual businesses are negatively impacted by substandard employees and employee misconduct in numerous ways numerous ways. According to Rory McMahon' there is a high incidence of fraud in employment applications and poor hiring decisions can significantly impact the financial viability of a business may be compromised by the additional costs of employee incompetence or misconduct. McMahon also states that employer causes one third of all business failures, and three quarters of all employees who commit white collar crime at businesses had committed white collar crime at a prior usiness employment". Although McMahon does not reference the origins for his data, the figures are ted by numerous industry studies. According to the Association of Certified Fraud Examiners (ACFE) 2020 Report to the Nations "employee fraud, theft, and misconduct are a significant problem and a threat to the success of many busines The study found that asset misappropriation was the most common method of internal fraud/theft, occurring in 86% of fraud cases. The second most common type of fraud was corruption (bribery, extortion, or conflicts of interest). The final type of fraud categorized in the study was financial statement fraud. Although the least co of fraud, financial statement fraud had the highest average loss- $954,000 over the course of each individual fraud. Financial statement fraud was typically conducted higher level executives within the organization such as owners and higher level executive positions Other studies confirm the data. A 2018 Forbes article cites U.S. Chamber of Commerce statistics indicating 75% of employees have stolen from their employer at least once, and 30% of business failures may be linked to employee fraud and abuse The same article quotes a study by Hiscox that indicates smaller firms are more like be at risk than larger firms. Hiscox studied embezzlement cases that were actively being prosecuted in the federal system. The study indicated that firms with less than 50 employees were ten times more likely to be victims than larger companies. Employee misconduct is not limited to theft and fraud. Background investigations should consider other factors. There are many types of employee misconduct can give rise to litigation or negatively impact employee performance. Employee misconduct can encompass workplace violence and assaults, intimidation, and substance abuse within the workplace. A rising area of concern are sexual harassment claims. According to EEOC statistics there were over 12,000 sexual harassment filings in 2019". The studies and reports clearly indicate that employee misconduct is a significant problem for businesses both in the United States and Globally. Since prevention is the most efficient means of preventing victimization, background investigations are the mo efficient means of protecting a business. Em procedures in hiring and due diligence in promotions and retention, may expose their irms to unnecessary losses or liability. Mcmahon, Rory J. Practical Handbook for Professional Investigators (3d Ed. (pg. 319)),2014, CRC Press, Boca Ihid at 319 . walker foo young the global study on fraud and pause. association of certhand it Forbes December 2018 "The 3016 " Charges Alleging Sex-Based Harassment (Charges filed with EEOC) FY 2010 - FY 2019. United States Equal Employment Opportunity Commission. Retrieved electronically from https://www.eeoc.gov/statistics/charges- alleging-sex-based-harassment charges-filed-eeoc-fy-2010-fy-2019, July 29 2017