The NSW Independent Commission Against Corruption [ICAC] released a report in February 2018 on employment screening practices in the NSW public sector. The Commission recommended that agencies adopt an integrated approach to address employment application fraud. These measures include designing and implementing a risk-based employment screening framework, assigning roles and responsibilities for employment screening, improving the quality of employment screening checks and screening non-permanent workers such as contingent hires.

This report has useful information for recruiters, managers, HR professionals and applicants.

The report points out that: ‘Employment application fraud is both costly and common. Typically, between 20% and 30% of job applications contain some form of false information, ranging from minor omissions to serious falsehoods.’

‘Employment application fraud can involve acts of commission (for example, falsely claiming to have a particular degree) and acts of omission (for example, failing to mention being dismissed from a previous job for disciplinary breaches). Specific examples uncovered by the Commission include candidates claiming degrees and qualifications that had never been awarded, falsifying work histories or work achievements, concealing a history of criminal or disciplinary activity and using false or misleading referees [p.7]

The report recommends that ‘agencies adopt a risk-based approach for preventing employment application fraud and ensure that any screening checks are standardised and justifiable. A risk-based approach involves tailoring the screening to the characteristics of specific roles. However, the roles that require the most screening are not necessarily the most senior or well-paid roles, as a number of relatively junior roles can have considerable risks attached to them.’ [p. 5] Plus, non-permanent workers should be subject to employment screening checks in the same way as those undertaken on permanent employees.

An employment screening framework comprises a series of policies, procedures and practices that guides an organisation’s approach to screening employees and non-permanent workers (for example, temporary employees and contingent workers).

‘Employment screening typically consists of checks on a candidate’s identity, integrity and credentials. Identity checks aim to verify that a person is who they claim to be. Verifying the name, address and personal details of candidates can protect an agency from identity fraud. Integrity checks are used to assess the soundness of a person’s character, and involve criminal record checks and reference checks. Credential checks are used to verify that a candidate has relevant skills and experience such as educational qualifications, professional qualifications, licences or employment experience to perform a role.’ [p.9]

The report provides agencies with advice on employment screening arrangements. More specifically:

• chapter 2 addresses how to design a risk-based employment screening framework
• chapter 3 discusses how to assign employment screening roles and responsibilities and manage third-party providers of employment screening
• chapter 4 provides guidance on performing specific types of employment screening checks
• chapter 5 addresses the challenges associated with screening non-permanent workers.

Of particular interest is the report’s advice that the roles requiring the most thorough screening process are not necessarily just the most senior or well paid. There are many less-senior roles that entail significant risk, such as:

• executive assistants, who often have access to confidential documents, electronic signatures and personal information;
• accounts payable officers, who can potentially amend the vendor master file and cause payments to be made;
• system administrators, who can change passwords, create new user profiles and change system permissions;
• payroll officers, who can change rates of pay, add new payees to the employee master file and amend overtime payments;
• accounting staff, who can write off bad debt, allocate expenditure to different cost codes and control budgets;
• stores or logistics staff, who control large volumes of inventory and verify the delivery of goods;
• security staff, who have unsupervised and/or after-hours access to assets and files. [p.13]

Some of the risk categories to consider regarding roles are:

• Decision-making
• Financial delegation
• Financial functions
• Job requirements
• System access
• Vulnerable client groups. [p.14]

This information is useful for both selection panels and applicants. It can form the basis for interview questions and for evidence of integrity.

As well as discussing good practice, the report explores how checking is poorly performed. Specifically, checks that are frequently used and have common weaknesses are discussed, namely:

• verifying identity
• verifying employment history
• checking criminal history
• performing reference checks.

In the section on roles and responsibilities of employment screening, some key elements of good practice are listed. They include that:

• there is a single point of accountability for ensuring that each role has a risk rating or similar classification that determines the employment screening checks to be performed (usually HR or the risk unit);
• other parties, including the relevant frontline or hiring manager(s), should have input into the risk rating;
• there is no ambiguity about the specific checks that are to be applied for each role;
• when a new role is created or an existing role is substantially modified, a new risk rating or classification should be assigned as a matter of course, and checks associated with the risk rating automatically applied. [p.20]

As the report points out: ‘Undetected employment application fraud can undermine merit-based selection and result in hiring an employee who lacks integrity or requisite expertise for the role. This can have a range of detrimental effects for an agency, including health and safety risks, poorer provision of public services, and impairment of public trust and confidence. Moreover, employees who engage in employment application fraud sometimes commit other acts of corrupt conduct once afforded access to an agency’s assets.’ [p. 5]