How to Avoid Negligent Hiring Claims

As an employer, your primary responsibility is the safety of your customers and your employees. An essential component of this duty is performing due diligence when hiring.

If you fail to adequately screen an employee who goes on to harm a third party — such as a customer or fellow worker — you may face a negligent hiring claim. And that can end up costing you and your business dearly.

If you’re unaware of the potential negative impact of negligent hiring, you’re in the right place.

This guide will take you through the definition of negligent hiring, how to prevent it, and what risks could emerge from cutting corners during the recruitment stage.

First, let’s start with the basics.

What Is Negligent Hiring?

Negligent hiring is a legal claim that an employee or customer can file if they’ve been harmed by an employee and if they believe the harmful behavior could have been predicted based on the background of the employee before they were hired. Some examples include:

• An employee with a violent past assaults another member of staff
• A home health care worker with a record of theft steals from an elderly patient

One of the biggest payouts in the United States was made by a communications company to the family of an elderly woman murdered in her own home by a service technician with a well-documented history of criminal behavior

The employers should’ve foreseen these events, either because they knew about the employee’s past or they should have known but failed in their due diligence. Negligent hiring leads to lawsuits.

How to Avoid Negligent Hiring Concerns

There are a number of practices businesses can employ to avoid negligent hiring concerns. Here are a few examples:

Create a Rigorous Recruitment Process

An employer’s HR team must create a robust recruitment process to make it difficult for applicants to disguise or omit information about themselves that’s relevant to the hiring decision.

Basically, when you’re applying for a job, the employer can’t just discriminate against you or ask for personal information that’s not relevant to the job. Ask certain questions, and you could be breaking the law.

A good example of legislation that impacts recruitment is ban-the-box laws and fair chance laws, created to help those with criminal records avoid discrimination during the hiring process.

Conduct Thorough Background Checks

Plenty of people put false information on their resume. It might not pertain to a claim for negligent hiring further down the line, but what else might they be hiding if they’re not being honest over some details?

It’s essential to take time to make thorough checks of applicants and also conduct the appropriate types of checks depending on the role and industry. This could include identity verification, reference checks, criminal history checks, and more.

Assess Job Relevant Competencies

Roles in specific sectors like financial services, education, and healthcare require professional training and licensing.

Industry-specific governing bodies verify training and look at other aspects of candidates’ suitability before issuing a professional license.

Always verify an applicant’s professional license: never take them at their word.

Employment involving transportation, whether a company car, a sandwich delivery business, or driving big rigs from coast to coast, should spark an MVR check for an applicant’s driving history.

The Importance of Comprehensive Background Checks

Comprehensive background checks are necessary for lots of reasons. Even with a detailed application form, essential candidate information is sometimes missed; that’s why professional pre-employment background screening is vital. These checks offer a lot of information and benefits to the employer.

Here are just a few reasons why.

• Fraud Prevention: Discover fake education or employment details and even applicants using false identities.
• Applicant Suitability: Check employment references and history.
• Protect Investors and Customers: Uncover applicants with a history of fraud or who pose a financial risk.
• Comply with Legislation and Industry-Specific Regulations: Protect the business from future legal action.

Exercising Due Diligence for All Candidates

Employers should carry out due diligence on all applicants; otherwise, they run the risk of being accused of discrimination.

Due diligence must comply with legislation on employment practices and hiring. It must be fair, reasonable, and ethical. Any background checks must also be relevant and proportionate to the type and seniority of the job.

Smaller organizations that don’t use professional background-checking services should create a defined process for all applicants to avoid an unfair piecemeal approach.

It can be necessary to conduct specific checks for certain roles. The check must be consistent with the vacancy and carried out on all candidates.

How Negligent Hiring Can Affect Your Business

Taking precautions in the hiring process is essential, or you could end up with some serious consequences – in addition to the harm the employee may cause, negligent hiring lawsuits can be extremely costly.

Not only that, but your reputation could also suffer as a result of wrongful hiring. It’s essential to take the time to verify that you’re hiring the right person for the job.

Final Thoughts

Negligent hiring can result in harm being done and even costly lawsuits – and it could potentially damage your reputation. Fortunately, there are steps you can take to avoid negligent hiring, including comprehensive background checks.

Professional background screening services offer employers many benefits, including avoiding a negligent hire claim. They protect businesses and take some of the legwork out of the recruitment process. Consider ScoutLogic today to help you find the perfect fit for your next hire.

David Garcia

David Garcia is the co-founder and CEO of ScoutLogic. David is also a senior operating advisor for Norwest Venture Partners. David is a member of the boards of ScoutLogic, YipitData, and Supplier.io and was formerly on the boards of Infutor and Avetta. He has over 25 years of B2B commercial leadership experience in data & analytics companies.