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What You Should Know About Employee Background Checks and The Restaurant Industry

What You Should Know About Employee Background Checks and The Restaurant Industry

Odds are that a great many restaurant owners have decided against performing background checks on prospective employees. The most common reason is the cost of thorough employee background checks. Particularly in a restaurant segment like quick service, turnover is often extremely high, easily exceeding 100 percent each year. In addition, we’ve heard owners say that their prospective employee pool is small enough already for these relatively low-wage positions, and instituting background checks would possibly eliminate some candidates, further reducing the size of that pool.

Potential Risks

If you’ve decided against background checks for your restaurant, just be aware of your potential risks. For example, your new employee may have a theft problem, and steal from you, your customers, and even other employees. Or, given the close quarters in many kitchens, hiring an employee with anger management issues may result in bodily injury to coworkers.

There are also a number of caveats for the restaurant owner who does choose to conduct background screenings. First, this should probably not be a “do it yourself” process. Perfunctory screenings using public database searches will only pick up issues that may have been reported by a specific jurisdiction. At a minimum, this should be expanded to state and county searches. There are a great many reporting agencies, varying by geographic area, what they cover, and the degree of detail they provide, so it can become quite complicated.

Government Regulations in Employee Background Checks

The next and even more significant thing you should keep in mind is that there are a number of regulations governing the use of data provided through background screenings. Among the most important regulations is the Fair Credit Reporting Act, which relates to the pre-notification of individuals being screened and notification of potential proposed adverse action (such as non-selection) in writing.

Recently, Massachusetts Senator Elizabeth Warren introduced The Equal Employment for All Act, which would prohibit employers from requiring potential employees to disclose their credit history as part of the job application process, and would stop employers from disqualifying employees based on poor credit rating. The bill makes an exception, however, for national security jobs. Recently, the Equal Employment Opportunity Commission also issued guidelines relating to the rejection of job applicants because of credit history or criminal backgrounds, stating that these may create a discriminatory impact based on race and national origin. Employers are expected to exercise conservative judgment in determining whether hiring decisions meet these guidelines.

We know that you didn’t get into the restaurant business to become an expert on background screenings and how to interpret these regulations and guidelines. Our advice to you is that, if you decide employee background checks are important, you consider using a third-party organization that specializes in this field and can help you avoid non-compliance and adverse selection minefields.

For more advice and support, turn to Integrity Employee Leasing! As a professional employer organization, or PEO, we are here to make your job as an employer and business owner easier. We can take care of many of the everyday tasks bogging you down, from onboarding new employees into your payroll system to processing paychecks and more with an easy-to-use online platform. We can even connect you and your employees with workers’ compensation benefits, insurance, and more. Interested? Contact Integrity today to learn about all the PEO services we have to offer, and ask for a free cost analysis!