BusinessTN

In a post-9/11 age of advanced technology and heightened national security, the demand for comprehensive background checks is stronger than ever. A background check can consist of anything from social security number verification to a detailed account of an applicant’s employment history—extremely useful tasks for companies looking to reduce risks.

“Drug testing and training programs cost money and take a significant amount of time,” says Camille Gamble, marketing director of Memphis-based criminal background check company Rapsheets. “When a company runs a background check on the front end, it can avoid wasting time and money on an obviously ineligible candidate.”

Companies also can face liability issues if they fail to conduct background checks. If a company hires someone for a position without adequately researching his or her criminal background, references, etc. and exposes customers or other workers to danger, it could be held legally responsible for anything that goes wrong as a result. This is especially pertinent for companies who offer jobs that involve working with children or having access to personal property.

“There are two types of criminal background checks companies,” Gamble says. “There are companies that physically send a runner to the county courthouse to check a record, and then there are the kind that aggregate criminal records into a central repository and make them available to customers online.”

Criminal background check companies such as Rapsheets usually work with small- to medium-sized businesses and allow customers to search their online databases before making a decision on whether to hire an applicant.

Larger background check companies, such as Nashville-based Kroll Background Screening Group, of independent risk consulting company Kroll Inc., offer more comprehensive services that can help “eliminate doubt about the integrity of U.S.- and foreign-born job applicants and vendors” by using all available means to research applicants.

With such measures available, both small and large, one might think that would take care of security issues. Not quite. A global economy means a world’s worth of rules and regulations. International background checks, particularly those done in Europe, are governed by different laws than those in America.

For larger companies that conduct business internationally and develop their own policies for conducting background searches, the lattice-work of sometimes overriding and conflicting rules can require substantial care to navigate.

In 1998, the European Commission’s Directive on Data Protection began to prohibit the transfer of personal data to non-European Union (EU) nations that did not meet European standards of privacy protection. The EU privacy laws ensure that data is transferred to the United States if only there is a guarantee of adequate protection.

Because the privacy laws of the United States and the European Union take different approaches, the U.S. Department of Commerce along with the European Commission developed Safe Harbor, a framework of principles that allows U.S. companies to have access European data without being subjected to penalties.

Safe Harbor was designed to aid in the transfer of all personal data, be it from within an international corporation or from a potential employer. However, because it saves so much time in the long run, more and more international companies are considering membership.

“On one level, it is not that difficult to become a Safe Harbor member. It’s as simple as a company filling out a form and certifying itself,” says Cindy Burns, a consultant for Nashville-based Privacy and Data Protection.

“The difficult part, however, is that companies must take the time to do a complete audit of their own data policies and adapt them to fit the standards of the Safe Harbor,” adds Burns, who is also an attorney specializing in privacy law.

If a company does decide to adopt those principles and become a member of Safe Harbor, then it must religiously adhere to those principles or else fall subject to punishment by the Federal Trade Commission (FTC), which governs Safe Harbor. Any transactions that happen outside the rules of the Safe Harbor are subject to penalty by the FTC. The Commission can impose fines, enjoin and/or even destroy any data that is acquired or used outside the realms of the Safe Harbor.

“One of the good things about Safe Harbor is that it guarantees privacy protection on both ends while allowing for a free-flow of information,” Burns says.

This free flow of information is a prime motivation for companies to use Safe Harbor. An employer can receive personal information about an applicant or a client without having to go through an extensive process.

“When transferring data internationally, there are a lot of contractual terms that have to be arranged with the relevant data protection authorities of a certain country,” says Jesse Bacon, vice president and general counsel of Kroll Background Screening Group, one of the first background check companies to join Safe Harbor.

“By being a member of Safe Harbor, you can bypass a lot of that. You only have to go through that whole complicated ordeal once,” Bacon says. He adds that even though Safe Harbor members must go through a yearly renewal process, the little extra time spent on the front end is definitely worth it.

Safe Harbor, though, is not the only way in which data can be transferred across the Atlantic. Companies also can receive information from overseas by getting consent from the applicant, contacting the proper data protection authority and entering into a model contract term. This method is the most beneficial for smaller companies that don’t need access to international information on a regular basis, but simply want to conduct a few background checks every so often. (This also explains why only three Tennessee businesses are registered Safe Harbor members.)

These days, background checks on potential employers are a necessary safeguard. And knowing the laws, whether home or abroad, is the only way to ensure the pros outweigh, and outnumber, the cons.