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Just Checking

Should you conduct ongoing background checks on your employees?

Finding out about an employee's Saturday night DUI or personal financial woes is now just a click and a fee away. Emerging subscription software packages, such as Assure from Verified Person, will scan public databases and send employers frequent reports regarding employees' off-the-clock behavior. Advocates cite employer liability as one reason for running regular background checks on current employees.

Privacy advocates, however, wonder if employees will be able to refuse these checks and how they will dispute errors. They also question the need for round-the-clock intrusiveness. "It is reasonable to conduct a background check prior to employment. But a continual background check?" says Pam Dixon, executive director of the San Diego based World Privacy Forum. "Is this the kind of society we want to live in?"

If you decide to use them, handle continuous background checks the same way you handle ordinary background checks. This means telling employees about the scope and frequency of the checks you'll be doing, getting their written consent beforehand and providing time for them to dispute disciplinary actions. Employers will also need to find secure ways to store the sensitive information they're gathering, says Phil Gordon, chair of law firm Littler Mendelson's Privacy and Data Protection Group in Denver.

It's unknown how many employees might quit as a result of frequent monitoring. If background checking software systems take off, however, off-the-clock privacy will become a valuable recruiting and retention tool.

This story appears in the December 2006 issue of Entrepreneur. Subscribe »