It is important for an employer to be prudent in the screening of prospective, as well as current, employees.  Without a proper background check, a business exposes itself to significant risks from unqualified, dishonest, and even dangerous individuals. The threat of potential liability arising from the employment of these types of individuals should make background screening a standard hiring best practice and part of an annual employee review process for every business. Of course, the depth and breadth of the screening will naturally vary depending upon your business and the job position.

It has been fairly common to use an employment credit report to evaluate job candidates and employees, especially those individuals with access to company banking and financial accounts.  An individual`s credit report can give an employer insight into an individual`s ability to handle significant financial responsibilities for the company and to identity potential risks of theft in dealing with company funds.

In the current economic environment, the use of the employment credit report has come under scrutiny as a way for employers to unfairly discriminate against people with bad credit.  A number of states have recently passed legislation to limit most employers from legally obtaining or using credit history information on job applicants or employees.  According to a recent New York Times article, more than a dozen states that have introduced such bills and there is even talk of a federal ban.  Many consumer lawyer groups are also lining up behind this movement, pointing out that credit reports can contain inaccurate information.

Some of the new laws provide exceptions for job positions where the credit check is substantially job-related.  Such exceptions include positions where there is access to financial information that goes beyond a normal retail transaction or where obtaining credit history information is a condition of bonding or insuring the employee.

Using credit reports as a background screening tool for potential employees may be necessary depending on the business type and the specific job position.  However, a credit report alone is never sufficient for a thorough background screen.  Employers should certainly use a variety of public records, other data, references and online searches including the basics - criminal and sex offender searches, employment and education verifications, professional license search, driver`s license search and motor vehicle reports.