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Hiring Employees

What To Know About Background Checks in the Restaurant Industry

David Peasall, VP, Human Resources
by David Peasall, VP, Human Resources on December 20, 2013

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Odds are that a great many restaurant owners have decided against performing background screens on prospective employees.

The most common reason is probably due to 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, 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. But there are also a number of caveats for the restaurant owner who chooses 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

Next and even more significant is that there are a number of regulations governing the use of data provided through background screenings. Some of the most important are those of the Fair Credit Reporting Act relating to pre-notification of individuals being screened and notification of 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. Also recently, the Equal Employment Opportunity Commission issued guidelines related 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 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 if you decide employee background checks are important, that you consider using a third party organization that specializes in this field and can help you avoid non-compliance and the adverse selection minefields.

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David Peasall, VP, Human Resources
ABOUT THE AUTHOR
David Peasall, VP, Human Resources

David Peasall joined FrankCrum in 2010. Since that time, he has served as the Vice President of Human Resources. Serving in the Army, he began his 20+ year career in human resources and benefits administration and has held several management positions within the corporate and public human resources environments overseeing employee benefits sales and administration, recruitment, compensation, employee relations, organizational development, and compliance. He has the nationally recognized designation of Senior Professional in Human Resources (SPHR), PPACA certification from NAHU, and a Bachelor’s degree from Barry University with a dual major in Human Resources Management and Health Services Administration. He has written for the Society for Human Resources Management, HR Insight, Proyecto Magazine, and for online publications in the restaurant and health care industries. While not at work, this Florida native loves spending time with his family, preferably boating, fishing, and diving the beautiful waters of Florida.