If you’ve ever gotten a job or hired an employee in the United States you’ve filled out an I-9 form. The form is used to verify a new hire’s identification and their right to work in the States. All U.S. employers must complete (including document verification) and store an I-9 form for every single individual they hire to work in the U.S, both citizens and non-citizens. Luckily, the form is only 3 pages long.
Completing an I-9 form
New employees must complete their section of the I-9 form after accepting a job offer and before finishing their first day of employment. Employers have 3 days from the new employee’s first day to complete their section and examine the employee’s documents.
Keep in mind that an employee’s first day of employment isn’t necessarily their hire date as set out in their employment contract, it’s the first day that they show up to work. For example, if your new employee’s hire date is set to be Monday but they come down with the flu and can’t come into work until Thursday, Thursday is their first day of employment.
Once the form is complete, you don’t submit it to anyone, instead, you store it for 3 years after the date of hire or 1 year after the date of employment ended, whichever is later. Fortunately, all I-9 forms can be filled out, signed and stored electronically, just so long as they are stored securely and are made available for any authorized officials, of the Department of Homeland Security, the Department of Justice, Civil Rights Division Immigrant and Employee Rights Section or the Department of Labor, who would like to inspect them.
Examining and verifying an employee’s documents – E-Verify
Individual employers have the option to use E-Verify to authenticate an employee’s documents.
The E-Verify program is a free online service that runs the information from the employee’s documents through government databases, to check it’s authenticity. The program is administered by the U.S. Department of Homeland Security, U.S. Citizenship and Immigration Services, Verification Division, and the Social Security Administration.
Some companies, such as AIS, are directly integrated with E-Verify, these companies are called employer agents. This means that AIS can act as an authorized agent on your company’s behalf and not only help you fill out the I-9 forms but also verify your employee’s documents quickly and easily.
What has changed with the new I-9 form?
You may have heard that a new I-9 form was released in July. Employers have until September 17, 2017 to switch to the latest version.
Not a lot has changed with this latest revision. The same information is required but the template is slightly different. The list of acceptable documents has been modified and the handbook for completing the I-9 form is now easier to navigate.
Streamlining your I-9 process
If you will be hiring or recruiting a large number of employees, we recommend streamlining your I-9 process by outsourcing it. Since AIS is an employer agent and therefore directly integrated with E-Verify, they can act as your company’s authorized agent to take care of everything related to the new I-9 form and process.
More information and resources
The information in this post is from the experts at AIS and the official website of the Department of Homeland Security, specifically the U.S. Citizenship and Immigration Services section: https://www.uscis.gov.
On the website, you can find more information about the new I-9 form, the E-Verify program, and other helpful resources. It is also where you can find the new I-9 form to download and use, as well as the instructions and handbook to help you fill out the forms if you choose to do so yourself.
The Federal Trade Commission enforces the Fair Credit Reporting Act (FCRA), which outlines what you must do when requesting a background check for pre-employment.
To start, before you request the background check, you must tell the applicant and get permission from them. These 2 things must happen using documents that contain no “extraneous” information and are in a stand-alone disclosure format.
Small Details Lead to Big Lawsuits
These may seem like small details from a large act. But an increasing number of class-action lawsuits are being filed against companies that failed to comply with the details of the FCRA. Companies are paying millions of dollars for, what is usually, one small slip-up. Here are a few of examples:
- Last year, Waffle House was accused of not providing a copy of the background check to potential employees that were not hired due to the information in the check
- A lawsuit against Kelly Services Inc. alleged the company violated the FCRA’s stand-alone disclosure requirement. The case was settled earlier this year for $6,749,000
- In 2014, it was alleged that Michaels Stores Inc. (the craft supply retailer) didn’t properly disclose to job applicants that the company regularly performed background checks on potential employees during the application and screening process
Mitigating the Risk
How do you ensure that your company always follows all of the rules and regulations set out in the FCRA when requesting background checks? You hire a trusted company with lots of experience. A background checking company who will work with you to ensure compliance with, not only the FCRA, but also your state laws. A company like Accurate Information Systems.
Kelly Services Inc., and Michaels Stores Inc., are just a couple examples of companies that allegedly didn’t follow all of the rules before requesting a background check. There are far more rules in the FCRA regarding what must happen once you receive the report, including what you can use the information for, how and when you can take “adverse” action, and how to dispose of the report.
More information about the FCRA, including the stand-alone disclosure requirement, is available on the Federal Trade Commission’s website: https://www.ftc.gov/tips-advice/business-center/guidance/using-consumer-reports-what-employers-need-know.
If you need a trusted company to run your background checks for pre-employment please give us a call at 1-(800)-295-7109 or download a sample report here: https://www.accinfosys.com/pre-employment-background-screening/
There is a plethora of companies in today’s background screening industry. A quick Google search of the term “professional background check” generates over 13 million hits!
These results range from honest reliable companies to others that will charge anywhere from $20-$50 dollars for an “instant national criminal search”. Their claim is that they will search billions of records, all instantly returned to you in an easy to read and understand format, right to your web browser. What they do not tell you is where this information comes from, how old it is, how often the information is updated or the legality of its use.
You need a professional to perform your pre-employment background checks.
Finding a professional
Like most things, you get what you pay for and not all professional background check companies are the same.
Here is a checklist of questions (and the answers to look for) that you can use to background check the background checkers:
1. Where are your call centers located and who is answering the phones?
The answer you’re looking for is: “The call centers are located in the United States and the people answering the phones not only have decision-making ability but also know and understand the products and services that they’re selling.”
If a company is offshoring their call centers, that is a huge red flag. When you call the company you need to know you’re speaking with someone in the USA who knows what is important in a background check and how to help you evaluate the results.
2. Will you guide me through the process, making sure that I’m following the applicable laws and regulations including the FCRA?
The correct answer to this is (obviously) “yes” and an explanation of how they plan to do so.
The professional background screening company you choose must know and be in full compliance with all applicable laws and regulations including the FCRA. This will ensure that you (and your employer) are on the right side of the law.
FYI – The Fair Credit Reporting Act (FCRA) is “a U.S. Federal Government legislation enacted to promote the accuracy, fairness, and privacy of consumer information contained in the files of consumer reporting agencies.” (wikipedia)
3. How many consent forms do you have for my perspective hire to sign?
You need 2 different forms for your perspective hire to sign. One of them is an authorization form and the other is a notification of disclosure. Both of these are standard and provided to you by the background screening company.
If the company has more or less forms than these 2, be wary and get more information about what the forms are and why you need them, or why they’re missing the ones we mentioned.
4. What is the process that you use to gather the information for the report?
The answer to this will heavily depend on the type of report that you’ve requested. This question is meant to make sure that they have a process in place that consists of a professional vetting the results of the report before it is given to you.
5. What is the cost?
The answer to this question will also heavily depend on the type of report that you’ve requested. Keep in mind that you get what you pay for.
6. What is the turnaround time?
All things being equal, a completed background check should be returned, on average, within 1-3 days. There are some aspects of a report that may require a lengthier turnaround time such as verifications of employment and education.
But ALL background check companies are held at the mercy of the prior employer, school or reference to reply in a timely manner. So, if a company is guaranteeing a certain turnaround time than that is a huge red flag.
What these companies are doing to close a search quickly and keep their “guarantees” is making three calls and if they don’t get a reply they close the search as unable to verify. This answer only provides additional questions for your staff and doesn’t provide a very good background check.
Keep in mind that international searches can and most often will, go longer.
One last piece of advice
Once you’ve made your (informed) choice, chosen a company and received the background report that you asked (and paid) for, do a gut check.
– Does the information contained in the report seem relevant?
– Did the company help you through the process? Showing their understanding of laws and regulations in different states and counties.
– Is there anything to make you believe that the company didn’t truthfully answer any of the questions you asked them in the pre-interview?
This may seem like a lot of work but choosing a background screening company should be something that you only need to do once. After you have a great team of people that you trust and are ready to help you, it will feel like an extension of your company and will be something that you no longer have to worry about.
A dictionary definition of ‘streamlining’ is to: “make (an organization or system) more efficient and effective by employing faster or simpler working methods.”
Since our expertise only falls within the screening and candidate assessment step of the recruitment process, we did a bit of extra research for advice on the rest of the process.
Turns out, there is no standard recruitment process. It depends on a lot of different factors, including: the industry, size of the company, position being hired for, and company culture. Basically: what works for one company may not work for another.
There are some obvious overlaps and the common trend we found to streamline your recruitment process, is to make use of technology where possible, and outsource what you can to experts.
Technology to streamline recruitment
The latest technological advancements are staggering. There are now a multitude of online tools and software that will help you streamline your recruitment process to get the top talent faster and more efficiently. Here are some examples that we found, sorted into various stages of the recruitment process:
- Tools that integrate job boards such as Indeed with social sites like LinkedIn can help you to find the right potential candidates.
- Using social media sites like Twitter, Facebook and LinkedIn are not only great ways to learn more about candidates, they are also platforms to reach out with job openings.
Pre-screening, interviewing and candidate assessments
- Pre-recorded video interviews give both the recruiter and candidate more flexibility in when they can watch/record the interview and how many tries they get.
- Online interview guides that you can fill in during the interview means increased consistency for the candidate, no matter who is doing the interviewing that day. And increased consistency for the interviewing team because each candidate can then be compared using the same criteria (from the guide). And of course, all the information is digital so sharing, organizing, and comparing it is a breeze.
- Digital onboarding paperwork will help to expedite the first day. There are tools that allow you to send the necessary paperwork to your new employee ahead of time and it allows them to digitally sign and return it to you. No more stacks of paperwork (hopefully)!
- Customer relationship manager (CRM) for managing candidates.
- CRM’s are generally used on sales teams. If you’re not familiar with them here is the best definition we found: “CRM software consolidates customer information and documents into a single … database so business users can more easily access and manage it. The other main functions of this software include recording various …interactions (over email, phone calls, social media or other channels, depending on system capabilities), automating various workflow processes such as tasks, calendars and alerts, and giving managers the ability to track performance and productivity based on information logged within the system.”
If you’re serious about streamlining your recruitment process, explore the technology that was built to help.
Outsourcing to streamline recruitment
Outsource what makes sense for your organization. Usually, these are things that require an expert and/or will take less time when outsourced.
- If you’re looking to fill a very specific position with a unique skill set you might want to consider a headhunter or recruitment agency. They generally have larger networks of people and an “ear to the ground” for all things recruitment.
Pre-screening, interviewing and candidate assessments
- Background screening and reference checks are something that should be outsourced to professionals. We can tell you that unless you have a highly skilled HR team already on the payroll, DIY screening can cost you more right off the bat. It’s also a good idea to have your well-structured background screening programs and policies as transparent to applicants as possible. This will help to attract top recruitment prospects and deter individuals with less than credible qualifications or intentions.
- Outsourcing some of your onboarding to an IT consultant can get new hires up and running quickly. A consultant can set up special onboarding policies and checklists to make sure nothing falls through the cracks when it comes to setting up email accounts, computer stations, access to work drives etc.
The recruitment process at your company is unique but it can probably still be streamlined with a combination of technology and outsourcing policies.
The Problems with DIY Screening and Why You Need a Professional for Your Pre-employment Background Checks
From what we’ve seen, almost all of our customers have been there: halfway through the interview process and already cautiously optimistic that they may have found their purple squirrel.
Then they get to the “Pre-Employment Background Check” step.
It’s always tempting to cut corners, especially with the continued pressure from management to cut costs. But DIY screening really isn’t something you should waste your time with. Unless you have a highly skilled HR team already on the payroll, chances are it will cost more in wages to staff members trying to do the screening than it would to hire the pros. Let’s dig a little deeper into why.
A few common pitfalls we see when untrained staff members attempt to navigate DIY screening: lack of accuracy, no legal certifications, and incompleteness of the results.
Lack of Accuracy
At the time of posting, there were 382 people named Jack Smith in Florida alone. How much time will it take to dig through all of those people to find the Jack Smith that is nearly through your interview process?
Alternative names (preferred vs. given), different spellings, name changes and duplicate people (like our friend Jack from Florida) are a few of the problems untrained staff will be up against.
No Legal Certifications
According to Wikipedia, the Fair Credit Reporting Act (FCRA) is “a U.S. Federal Government legislation enacted to promote the accuracy, fairness, and privacy of consumer information contained in the files of consumer reporting agencies.”
Any professional background screening service worth their salt will be in full compliance with the FCRA.
As an aside: Accurate Information Systems is not only in full compliance with the FCRA, but also with state consumer reporting laws and International data protection and privacy regulations.
Can you guarantee that your staff will know the in’s and out’s of the FCRA? How much time will they spend trying to sort through the 100+ pages of the act?
Incompleteness of the results
Still not convinced that you need a professional? Up until this point, we have assumed that the only extra cost versus hiring the pros, is in the wages of the staff members doing the screening.
We’re assuming that, while it took WAY longer than expected, (because it always does with DIY screening), it’s done, and you have hired the perfect candidate.
But what if you missed something? And your purple squirrel ends up being a bad hire. It happens all the time. According to a CareerBuilder survey of 6,000 hiring managers and HR professionals worldwide, more than half of employers in each of the ten largest world economies said that a bad hire has negatively impacted their business and 27 percent of employers in the U.S. who reported a bad hire said that a single bad hire costs more than $50,000. Don’t let your company fall into that statistic.
What you need to know
If you’re serious about finding and retaining top talent you need to be sure about who you’re hiring. Pre-employment background checks are a must and trying to do it yourself may cost more in the long run.
It’s worth the investment to use a professional background screening company that can show you everything from a federal criminal search and personal/professional reference interviews to education and employment history searches.
If you go with the pros you’re more likely to finally find your purple squirrel, or at least know when you haven’t, before you offer them the job.
One of the most common questions we hear when it comes to international background checks is “how long do they take.” Companies considering international candidates are no less eager to bring them aboard than locals, and anything that slows you down the finalization can be a major stumbling block.
While we know this is the case, there’s no easy answer that applies across the board. It’s critical, however, that you don’t rush or skip the process. Here’s what you need to know.
If you’re hiring internationally, candidates will have to go through some sort of immigration process to enter the US, if they are going to be a domestic hire. However, that process can vary greatly from country to country, and it’s worth researching US immigration requirements before you even start the hiring activity. Limiting your search to countries with lower requirements can speed things up significantly.
Once the process has started, and you or your screening agent are attempting to access information, the country or countries in question will once again be a factor. It can be notoriously difficult to access information in some countries, while others are hotbeds of corrupt governments and bureaucratic red tape, all of which slow down the process.
What Comprises Global Screening Services?
The good news when hiring from abroad is that US immigration and customs will do some of the work for you. However, if you’re appointing a foreigner before they apply to enter the US as an employee, you might choose the perfect candidate, only to find they’re ineligible.
Here are a few of the things your international background check should cover, to help prevent this problem:
- A criminal record check from every country they’ve lived in for more than six months, and from their current country of residence. This will be required by US immigration officials, and any negative information here (even if it doesn’t prevent you from hiring them) might very well bar them from entering the country.
- Education verification, for all the institutions they have credentials from. This can be tricky too, as there are different policies in different countries, and in some cases, credentials are only available in foreign languages, and need to be translated before they can be assessed.
- Credit reports for each of the countries that they have lived in.
- Work related references, for at least a few of the companies they’ve worked for, as well as checks into the companies themselves. It’s not unheard of for prospective employees to provide false references from companies that don’t exist, and even if they do provide bona fide references, there’s often the issue of translation too.
International hiring is certainly not without its challenges, but with the global pool of talent out there, it’s an attractive prospect for companies looking to fill highly specialized or technical roles.
The best thing you can do to speed up the process is to work with a company who is experienced in this area, and who can get things done as quickly as possible.
In 2015, an estimated 2.7 million people were evicted in the US.
That’s a mind-boggling number, and with the upward trend in evictions, that’s likely to have grown in the two years since.
The largest factor driving this eviction trend is the rising cost of rent, while salaries and wages have simultaneously stagnated, and the data shows that the higher the portion of take home salary rent comprises, the more likely an eviction becomes.
While this is an alarming socio economic trend in general, and one that will certainly affect this country deeply in years to come, it’s also a major concern for landlords. After all, with more families opting to rent for one reason or another than ever before, this could happen to anyone.
Evictions Are Hard for Everyone
Let’s be honest: no-one wants to put anyone out on the street. Chances are, even if you have done so in the past, you didn’t take this drastic action lightly, and you probably lost some money in the process.
The fact is that evictions are bad for everyone. They put families in impossible situations, they cost landlords money, and they’re likely to leave your property empty and losing money for at least a little while.
If you’ve had to do this more than once, you might even have chosen to use a third-party property management company, simply so that you don’t have to deal with the fallout directly.
This is one situation where prevention is infinitely better than cure.
Tenant Screening Is Critical
The single most important thing you can do to avoid having to deal with evicting a tenant is to conduct thorough tenant screening. Here’s how this can help:
- The key issue here is affordability. Since families who pay larger chunks of their salaries to rent are more likely to default, leading to eviction, knowing what your prospective tenants earn is a very important.
- Another important issue you want to check when finding the right tenant is the length of time your prospective tenants have been in their jobs. Even if they’re earning great salaries, the ink may not be dry on their employment contracts, and it might not stay that way.
- A credit report or basic credit check will also tell you if your prospective tenant is in financial trouble in general. When there are lawyers and debt collectors knocking on the door, they might decide to use their rent money to buy some time.
- Finally, don’t forget criminal record checks. Even if people are completely above board today, they may have a criminal past, and when money is tight, sometimes people choose to do things that are not completely legal, especially if they have a history of criminal activity.
Proper screening might not be able to predict a tenant being fired or racking up unexpected medical bills, but it can help to show you what their track record and character is like. People tend to behave the way they have in the past, so if there are any red flags there, you should at least address them.
Ultimately, renting out your properties remains a risk, but you can take steps to limit those risks and help to protect your investment.
The right people can make all the difference to your company’s success, but the wrong ones could literally sink it.
Great people make great companies. Or as Sir Richard Branson so often says, “teamwork makes the dream work.” However, while the right people can make all the difference to your company’s success, the wrong ones could literally sink it.
There are companies that choose to wing it when hiring new employees, but they are also often the companies that find that their dream candidate turns into a nightmare quickly. We’ve heard horror stories that range from grossly unqualified new applicants (who looked great on paper!), to discovering that the new hire has a long criminal record under their own or another name.
The fact is, when hiring on the fly goes wrong, it very often goes wrong spectacularly.
Prevention Is Better Than Cure
Even if you operate in an at-will employment state, getting rid of bad hires can be costly in terms of restarting the hiring process, undoing the damage that’s already been caused, and potentially hiring temporary help during the process. It’s always better to hire right the first time.
The best way to ensure that your company hires the right people is to create a detailed and comprehensive interview and employee screening policy. Here are some of the reasons why this is so critical:
- Narrow your candidate list easily. One of the biggest problems with any hiring effort is that you’re likely to get a large group of applicants who all seem to be suited to the job. An in-depth employee screening process can help to eliminate some of those candidates right off the bat.
- Eliminate the risk of hiring employees who are unqualified or inexperienced for the role.
- Weed out employees who have hidden criminal records.
- Avoid hiring employees who have tax troubles.
- Ensure that your requests for criminal record checks, medical screening and other potentially tricky checks don’t land you in hot water.
A well thought out, fair and above-board employee screening policy that complies with the law and covers all the important bases might not eliminate 100% of the hiring risks you could face, but it will certainly cut them right down to a minimum.
Create a Lifetime Employment Policy
Many people think that employee screening begins and ends with new hires, but the truth is, it’s an ongoing process, that will require additional steps throughout the duration of your association with an employee.
You may need to implement annual or regular screening of certain types of employees to ensure your compliance with industry regulations, or you may need a policy to “rescreen” before choosing from a pool of employees up for internal promotions.
Proper Screening Is Always Cheaper
Professional employee background screening may carry costs that you’d rather avoid. The process may slow down your HR processes. However, with the true cost of a bad hire estimated to be well over $200,000 (and that’s without any lawsuits that may result in extreme cases!), it’s certainly worth the investment.
There’s no “one-size-fits-all” solution to corporate due diligence, so you have to look for the right fit for your company.
Ignorance of the law is rarely a defence in a court of law. That’s just as true in business as it is in your personal life. But while it’s usually fairly easy to keep yourself out of legal trouble, it can be a lot harder to stay on the right side of the law in business.
Laws, regulations, certification requirements change all the time, and your business needs to adapt and add policies and procedures to ensure that you change with the times. That’s corporate compliance in a nutshell, but while it sounds simple, it’s actually much more complex than one might think.
No “One Size Fits All” Solution
One of the major stumbling blocks for companies when it comes to corporate compliance is the lack of a one size fits all solution.
Because there are so many elements to any compliance program, based on your industry, your state, and a host of other factors, you really need to create a tailored system that is unique to your company. There are professionals who can help you to create an effective compliance program if you are struggling, so that you have a solid foundation to work from.
This can be even tougher when your company does business in emerging markets, where the local legal frameworks may differ significantly from US laws.
Some Universal Factors
Even though your corporate compliance is often driven by what you do and where you do it, there are a few basics that all programs should incorporate:
- Leadership involvement. This is the most important step. Without a complete leadership buy-in, corporate compliance programs almost invariably fail. Leaders might not draft the actual policies, but they need to ensure that they are adopted universally and applied absolutely.
- Properly trained staff. While you might not have a dedicated compliance official in your business, it’s important that department managers understand what their role in compliance is, and what their department needs to do to ensure companywide success.
- A list of state and federal laws governing your industry and company, and policies that outline how your company will comply.
- A list of certifications and accreditations required to practice in your industry, if required. This may include things as simple as maintaining a current business license for the city or cities you operate in.
- Documented policies that outline your business ethics, what constitutes corruption, and how it is handled in your business.
- Any other documented policies relating to human rights, legal compliance, service level standards, and any other regulations that affect your company.
The smaller your company is, the less complex your compliance program is likely to be, but companies of all sizes should consider having their policies and procedures documented. It’s always easier to remember what you need to do when it’s written down!
When Buying a Company
When you are considering buying or merging with another company, it’s always a good idea to include some investigation into their corporate compliance program when conducting your due diligence, too.
After all, companies that don’t have a good handle on complying with state and federal laws, and good, solid internal policies, may well come with all sorts of surprises that you weren’t expecting, and that aren’t likely to be pleasant. No one wants to inherit legal troubles based on someone else’s lack of good corporate governance.
Jobs have gotten a lot more specific these days. Roles are far more complex, and there’s a good chance that at least one of the positions you will need to fill will combine a weird mish mash of skills, some of which may be scarce. After all, there’s no longer room for one trick ponies at the top of major organizations. You need to have candidates who are flexible, knowledgeable, and adaptable.
The good news is that while the number of candidates who fit the bill may have gotten smaller, you have a bigger pool of prospects to choose from to find the perfect fit.
If you’d like to use a global talent search to find that one special employee, then there are a few things you need to know.
Job Sites Are Your Friend
The good news is that while you’re searching the world for that one special employee, special people are looking to emigrate too. They’re searching internet job sites as you read this, so the very best way to reach them is to start posting your jobs not only on local job sites, but also on their global equivalents.
Language Is a Factor
When you hire internationally, you are going to get involved in immigration issues, and one of those will be linguistic ability. With few exceptions, candidates who emigrate to the U.S. to take up a position will have to prove their proficiency in English, so make that a part of your international screening process.
Post all your ads in English only, and ask for proof of ability early in the hiring process.
Have a Credential Verification Plan
Another big factor in international hiring is the equivalency of credentials. Not all titles or specializations will be called the same thing in other countries, and there may well be different qualification levels in the countries you’re targeting. Be prepared to enter a more complicated education and professional credential verification process, and if licensing is an issue in your industry, bear in mind that you might need to arrange bridging courses or U.S. exams for your international hires.
Health Is a Factor
You might not be able to request medicals as a part of your local hiring process in most cases, but if your candidate is emigrating from abroad to take up a position, medicals will be a part of their immigration process. Make sure you mention that they need to be eligible for U.S. immigration on medical and criminal grounds. These are usually legal deal breakers if not met, from an immigration point of view, and the last thing you need is a tricky legal situation where you’re forced to break a contract because of factors outside of your control.
Hiring a Pro Is Recommended
Having the world’s most talented people a mouse click away is a huge boon to companies who need scarce skills and exceptional candidates, but international hiring is a very different, very complex undertaking.
Unless you have a highly skilled HR department in your company who can deal with all aspects of international screening and verification, and who know how the immigration process works, it’s always best to defer to the pros.
Anyone with any experience in commercial property leasing will tell you that this type of property rental is a very different beast. While you still need effective tenant screening to make sure you’re renting to the right person or organization, there are many other factors to consider too.
Types of Commercial Rental
Commercial leases come in many different forms and formats, with a huge variety of terms and contract clauses, but while there’s certainly no one size fits all solution, there are few basic options:
- Percentage leases, which are common in retail spaces, include the base rent for the unit, as well as a percentage of monthly sales.
- Net leases, double net leases and triple net leases are another common commercial form of lease, which leave tenants liable for taxes, insurance, and maintenance costs in addition to rent. They’re great if you want to be a hands-off landlord.
- Gross leases are much less common, and are also known as “fully serviced leases.” In this type of lease, the landlord takes on all the extra costs and hassles, and the tenant just pays their rent, which includes the costs and management fees, often called a “load factor.”
Insuring Your Investment
One of the biggest factors in commercial leasing is ensuring that your long-term property investment is secure, and that’s why insurance is such an important part of this type of lease.
This is one of the reasons why commercial landlords need to think so hard about what the acceptable use of your property will be, and how insurance will be handled. Aside from regular insurance, you will also need to ensure that your tenants carry adequate public liability insurance too, because that helps to prevent third party injury and damage claims.
Choosing a Good Commercial Tenant
Commercial property leasing is a much more complex process than its little residential cousin. While your tenant selection for a residential property is all about character, track record and employment checks, there are several other factors to consider when choosing a tenant for your commercial rental:
- The nature of the business. Is it high risk or dangerous? Seasonal? Is it in a high-risk industry?
- The length that the company has been in business. Brand new companies might not have access to credit or any credit rating at all. Are the business owners prepared to take personal responsibility?
- If the business is new, have they offered to provide you with a business plan? This can be a good indicator of how their business will fare.
- Do they have all the certifications and licenses necessary to operate in the city and in their industry? Get written verification and copies of all these.
- Do they have all the insurances needed to protect their business and your property? Again, everything in writing.
- Are they willing to agree to a specific use provision? Just because their business is in one area now, does not mean it will stay in that industry, and you want to be able to cancel the lease if they switch to an undesirable sector or business model.
These are just a few of the things you will need to discuss with prospective business tenants for your commercial rental property. Most importantly, verify as much as possible, and get everything in writing. If it’s not in the lease, signed and sealed, it cannot be enforced.
You’ve probably heard the old saying that there are only two things in life that are certain: death and taxes. A Federal tax lien is the literal documentation for the latter. The Federal government issues these liens to recover unpaid taxes, and they are proof that when it comes to their money, the IRS is a well-oiled and ruthless machine.
In fact, once a Federal lien has been issued, the government has the power to seize assets, attach property and more. It can prevent the person who is subject to the lien from getting loans, and may bar them from certain jobs in your organization.
In short, if you’re hiring, tax lien searches should be part of your employee background screening process, and here’s what you need to know about the process.
It’s Not Top Secret… But Close
Tax liens are what is commonly known as “secret” liens, in that the Federal government is prohibited, by law, from disclosing anything at all about them with anyone other than the tax payer in question. So, if you thought you could just call up the IRS and ask about a particular candidate, think again.
What the government does do, however, is issue a notice of Federal tax lien (or NFTL) that is lodged with the deeds office in county in which they reside. If you know how to search those records, you can establish that there is a lien against a particular person.
Credit bureau also record tax liens on individual reports, so if credit checks are part of your hiring process, you should find out during that search.
But You Might Not Be Able to Ask..
The challenge with employee screening in the U.S. is that it’s not only a Federal matter. Different legislation in each state could impact your ability to even request a credit report from a prospective employee, with a few exceptions.
Generally, even in strict states like California, which typically doesn’t allow employers to request credit reports, if you can show that the report is relevant to the position (for instance, a direct financial position), you can still request the information.
As with everything, your tax lien search request needs to be justified, relevant, and non-discriminatory, and if you’re not sure whether your process fits into those criteria, you should definitely seek professional or legal advice.
How Tax Liens Affect Employees, and You
While you can’t always find out if current or prospective employees have tax liens, you can be sure that if they do, there will be an impact.
Employees who are in financial distress are always a risky gamble, depending on the severity of the problem. Owing taxes to the Federal government is usually a pretty severe one! Employees who have tax liens may also be barred on working for projects for state or federal government too, which may impact your company’s chances when bidding on projects.
Finally, the IRS also has the power to garnish wages, so you may find that you have more administrative tasks when paying employees who do have tax liens, which can make the process of managing your payroll more complex.
If you’re not doing everything possible to perform identity verification on all your employees, you are leaving yourself open for unimaginable financial, organizational, and even legal damage.
Consider, for one moment, that the average teenager in America probably knows someone who can get them a fake ID that could get them into a club. Now consider that there are people out there who make a living out of identity theft, and have considerably more resources at their disposal.
Even the most convincing looking documentation could easily be fake, and identity theft and fraud are far, far more pervasive in the U.S. than you probably realize. If you are taking any credentials or documents at face value, you might already be at risk.
The Figures Don’t Lie
Of the nearly two million complaints that the Federal Trade Commission received and investigated in 2014, approximately 14% were identity theft related. Of those, 6% were employment related. That works out to about 16,800 cases in that year alone. That’s a little over 46 cases, on average, every single day.
That’s just the cases that were discovered, reported, and investigated too. If the alarming trends in identity theft around the world are anything to go on, the true figure might well be considerably higher than that.
People are lying their way into jobs, and to keep them, and it’s happening all the time.
Why Do People Commit Employment Related Identity Fraud?
The reasons why people commit this type of fraud vary significantly from case to case. Sometimes, they’re simply trying to hide a checkered past. Sometimes, they’re deliberately hiding who they are, with the intent to cause chaos within your organization. In those cases, some of their reasons may be:
- They are employees of your competitors, engaging in industrial espionage.
- They have falsified education and other credentials, with the goal of being hired for jobs they are not qualified to hold.
- Insinuating themselves in positions of financial authority, to siphon or embezzle funds.
- They are hoping to gain access to your network, to copy or share customer’s digital records from inside your company.
When employees do deliberately engage in identity theft during the hiring process, it’s often with the intention of achieving their goals, and then simply disappearing.
The more sophisticated the fraud and the higher the position, the more damage and cost there is likely to be, and it’s significantly harder for the authorities to catch someone if they have no idea who they are chasing.
Protecting Yourself from Employment Related Identity Fraud
These scenarios may sound far-fetched. Like something out of a Hollywood movie, that could never happen to you.
But they can, and in many well-documented cases, they have. Those are just the cases that have made main stream media, too. There are plenty more tied up in court, or in the hands of the authorities, never to be solved.
The simple fact is that had the employers in all these cases (reported and not), conducted a thorough identity verification process before hiring the individuals in question, they could have avoided many of these situations. You can too, and you should.
If the position in question is high powered, and the credentials are complex and hard to confirm yourself, then hiring a company that specializes in professional due diligence services can cut through the Gordian knot of information for you. It may delay the hiring process slightly, or cost a little more than your in-house checks, but it could save you time, money, and even legal trouble later.
They say we decide whether we like someone or not within seconds of meeting them. Often, without even realizing it, and before we’ve even shook their hand, we know whether we are going to get along or not.
First impressions can be surprisingly accurate, and if you’re a landlord, you’ve probably experienced an instant like or dislike of a potential tenant more than once. But while gut feel can go a long way towards choosing the right tenants for your property, it’s not the only thing you should be relying on. At the very least, you should be asking these five questions as part of a tenant credit check before you short list anyone.
1. Why Are You Moving?
Most people work for work, school, or family reasons. If a tenant doesn’t have a good reason, or avoids the question (or eye contact for that matter) that’s a big warning sign that something might not be right. Question them a little more if you don’t get an answer you can believe. The last thing you want is someone who’s running from criminal activity or something worse taking up residence in your property!
2. How Many People Will Live with You?
Most normal people assume that if you’re renting a three-bedroom condominium to a family, there will be two parents in the master bedroom, and a child in each room. Maybe one extra child sharing with another, if one room is bigger. However, not everyone sees it that way. Some people will cram two kids into each room, and then a few family members in the basement, with one on the couch for good measure!
Not only do you not want your rental property to be overcrowded because it will increase wear and tear, but that might well be against fire codes and other bylaws in the area. Make sure you state how many people are allowed in the property!
3. When Are You Moving?
You might be willing to be flexible on moving dates for the right tenant, but if they’re moving months after you need to fill your property, or far too early, then it’s probably not a good fit. Keep their tenant credit check information on file if they seem like great tenants though. You never know what might happen in future!
4. What Do You Earn?
This can be an uncomfortable question for new landlords, but it’s not an unreasonable one. If someone earns too little, they probably can’t afford to rent your property and pay their bills, and at some point, they’re going to be late with one of those.
Don’t write them off immediately though. Sometimes, a single tenant may earn too little, but they may share the rent with a romantic partner or a roommate. Find out what their arrangement will be, and what their collective earnings will be before you make a decision.
If anyone refuses to share information for a tenant credit check, however, take them off the list. This is not an unreasonable question in this situation, and if they won’t answer it, they probably don’t make enough to afford the rent.
5. Do You Have References… and Can I Call Them?
This is another big question, and an important one in deciding who you rent to. You want to rent to someone who has at least one previous rental relationship, and who was a good tenant. Track record is a very good indicator of behavior going forward.
If a tenant says no to reference checks, find out why. They might still have a compelling reason why you can’t. In that case, decide whether you will accept personal character references or references from employers instead.
You wouldn’t take your kid to an unqualified dentist, would you?
A professional background screening company offers accurate results, applicant privacy, fewer mistakes, improved outcomes, compliance knowledge, well-developed solutions, use of best practices
Chances are, you’ve considered doing your own screening, your own due diligence, and your own reference checks. If you own or manage a company of a certain size, you probably have competent people who could probably manage the process adequately, and you sure would like to shave a little off the budget.
However, while saving money in business is usually a good idea, foregoing a professional background screening company might not be the best way to do it. In fact, using a professional company might save you more time and money than you think, now and in future.
1. Lower Cost
You might not realize it, but unless you have a highly skilled HR team already on the payroll, DIY screening can cost you more right off the bat. If you use an employee or employees who don’t know how to conduct screening to do the checks, you’re still paying them their hourly rate while they figure out what to do and how, and go through the process. Those hours add up quickly, and the result may well cost more in wages to staff members than hiring the pros.
2. Improved Accuracy
There are plenty of ways that data can be corrupted when running background screening, from a subtle misspelling to missing one crucial organization when conducting your screening. Professionals double and triple check information before they present it to you, and they already know who to contact and what to request.
3. Less Legal Risk
A professional background screening company team knows what they can ask and how, but they also know what you absolutely cannot ask an employment candidate, potential tenant, or someone else. Asking the wrong questions can get you in legal trouble, and that gets expensive fast. If you’re not absolutely sure, trust a professional.
4. Improved Privacy
We’ve all seen the chaos that happens when an online company gets hacked, and private information is leaked. Screening results are the same thing, on a smaller scale. If you are not absolutely sure that you can protect every shred of personal information you gather on a candidate, then you should absolutely hire professionals to do your screening. Because they will only share information that you need and are entitled to, and because they will store and or destroy screening results correctly, you’re protected from breach of privacy claims.
5. Knowledge of Requirements
A professional background screening company won’t need to research what you can and should know about any candidate. They already know. They have a list of items that need to be checked off, and how to go about getting the information needed to do just that. They won’t skip crucial steps, and they also won’t waste time and money on unnecessary or illegal screening processes.
In fact, most companies will work with you to determine your own best practices, based on the application of the screening results, your industry and needs, and various other factors.
6. Peace of Mind
There’s a reason you take your car to a licensed mechanic rather than the guy down the street, or trust the best orthodontist with your kid’s braces. You know they’re going to get the job done right, and if they don’t, you know that they will go out of their way to fix the problem.
That peace of mind may be last on this list, but it’s probably the most important item. Because no one needs any more worries when you’re trying to run a company.