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Construction Business Owner, July 2008
What is the role of a private investigator in today's environment? Business due-diligence is the emerging field for private investigators. Businesses must be "in the know" about their suppliers, clients, competitors and employees. Protection from serious economic liability can be directly attributed to making informed choices.
The financial strength of key suppliers is instrumental in maintaining an uninterrupted flow of raw material, supplies and merchandise to support contracts and commitments. Contracts are essential to all business dealings, but without assets to support the company behind the contract all that remains is a worthless piece of paper. Clients with a list of outstanding judgments and liens can be virtually impossible to collect payment from. You can avoid financially weak clients with business credit reports based upon demonstrated payment history, not just supplied information. An information specialist can supply critical information for an effective evaluation of risk to opportunity.
Competition is often the logical and obvious threat that most businesses focus on, while the often overlooked danger can be found internally on the payroll. Internal theft, drug use, employee harassment, embezzlement and negligent hiring lawsuits can do greater financial damage faster than legitimate competitive practices. It is to the licensed Private Investigator that an employer can look for a compliant, accurate and credible employee background screening program.
Criminal Background
Pre-employment criminal record screening and drug testing will minimize the hiring of individuals with the "heavy baggage" associated with anti-social lifestyle choices. An employer is legally responsible for the intentional action of their employees. The employer has a "duty of care" to the general public, their employees and their clients. The preventive measure is to determine, within the limits allowed by federal and/or state law, if an applicant has a demonstrated criminal history that represents an unacceptable level of risk and liability. The goal is not to eliminate everybody with a criminal conviction, but rather to make an informed hiring decision.
Employment background screening is regulated by the federal Fair Credit Reporting Act, as well as several state overriding laws. In all interpretations of the law, it is not legal to automatically disqualify an individual based solely upon having a criminal record. The length of time since the conviction occurred, the frequency of subsequent illegal activity and the ability to perform the job all must be taken into consideration.
New partners and key employees occupy a unique relationship within the business. They often are acquaintances or are recruited from within the same industry. The need for proper due-diligence doesn't stop at the executive office door. Employees that steal tools to support a drug habit are a nuisance; executives that embezzle millions are a serious problem.
Smaller businesses are far more likely to attract unscrupulous employees because fewer controls are in place, and one person may have many roles. A false sense of trust and the "family" environment that small businesses strive to create are a magnet to thieves. When the enormity of the loss is finally discovered, it's often too late for any format of recovery---the assets are gone and so often the business is as well.
Proper background screening with the level of scrutiny commensurate with the level of risk just makes good common sense. If you're going to give the keys to the safe to someone you should, first know exactly who they are.
An accurate and compliant background check is based upon verified identification of the subject, including; name, date of birth, driver's license and Social Security numbers. When any of these identifiers are missing or not included, the credibility of the report is in question and renders it worthless.
Drug Abuse
The construction industry ranks among the highest level of frequency of drug abuse by occupation in the United States. Employees who use drugs should never operate or use safety-sensitive equipment, but they often do, resulting in an increase in accidents. This increased-frequency in accidents creates more worker's compensation claims that drive up the experience modifier rates. After all accidents, the victims should be routinely drug tested, because if they were under the influence, it's likely that worker's comp and/or unemployment insurance benefits will be denied. Drug abusers also have increased absenteeism, poor work habits and contribute to an overall decrease in employee morale. In a competitive world, producing second-rate products from drug-abusing employees will not bring success.
Employee Harassment
Employee harassment and hostile workplace issues can never be ignored, no matter how trivial they may appear. In 1999, the U.S. Supreme Court decided two cases that spell out when an employer will be legally responsible for harassment. In these cases, the Court held that employers who have an antiharassment policy and investigate harassment complaints quickly and fairly can avoid liability in certain kinds of cases---even if the employee proves that he or she was harassed. In many states, only an attorney or licensed private investigator is legally permitted to conduct the investigation outside of the business.
Undocumented Workers
The construction industry is inundated with the hiring of undocumented workers, often paid in cash. The Immigration Reform Act of 1986 clearly makes it a federal crime to knowingly hire persons whom are unable to prove their legal right to work in the United States.
Largely ignored until recently, worksite enforcement and prosecution under this law has just become a top priority for the Immigration Customs Enforcement (ICE). Fines range from $275 for clerical errors to $11,000 for knowingly hiring illegal's per case. The added twist is that company executives, owners and managers are being personally charged under the Racketeer Influenced and Corrupt Organizations Act (commonly referred to as RICO Act or RICO) that provides for extended penalties for criminal acts performed as part of an ongoing criminal organization. These same company decision makers are facing huge fines and jail time as a result of their actions.
To alleviate this added strain on employers, the Social Security Administration (SSA) and the Department of Homeland Security have jointly created a verification system for employers based upon the Form I-9. Private industry has improved and simplified the free government system for added benefits and ease of administration. The use of one of these electronic Form I-9 programs will virtually eliminate the SSA "no match" letter problem and demonstrate that the employer has used a reasonable effort to comply with the law.
Private Investigation
The business model of a private investigator is diverse and is built upon the Latin derivative, vestigare. Therefore, investigation implies a tracking, a search, an assimilation or collection of data and facts. These essential functions are common to all types of investigative work, regardless of their special purposes. Private investigation is the search and journey toward the reconstruction of events and conditions pertinent to clients' needs and interests. It is the collection of information to resolve factual disputes and confusing data.
To support professional and ethical practices, forty-four states now require that private investigators be licensed to operate. The licensed private investigator plays a very important role for all business, small or large. Only trained professionals can consistently deliver the results that are compliant, legal and expected on time. The Internet brings a vast source of options, not all of which operate with the best of intentions for the client. In the end, it is the client whom is left to answer to their state attorney general in a lawsuit when information is improperly or illegally used.
Information, when properly obtained and used, is always the best defense available.
Alfred A. Firato is the president and CEO of HIRE-SAFE. He can be reached by phone at 888.792.4473.
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