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What is Negligent Hiring? Definition and Meaning Explained
Negligent hiring refers to a legal situation where an employer fails to vet a candidate’s background thoroughly and hires someone unfit for a role. This can lead to workplace incidents that the employer could have prevented, making the employer liable. This often occurs when employers fail to properly vet candidates and hire someone into a role they knew (or should’ve known) the candidate was unfit for. Here’s what we mean:
The Business Risk of Hiring Someone Without the Right Qualifications
Hiring someone without verifying their qualifications—like licenses, certifications, or relevant experience—can expose your business to significant risks. For example, hiring a contractor without a valid license could result in subpar work that damages your reputation or even leads to legal consequences if regulatory standards are violated. In industries like healthcare, hiring an unqualified employee could endanger lives and result in costly malpractice lawsuits.
Beyond legal liabilities, your company may face financial losses, compliance penalties, and harm to your brand’s credibility. This underscores the importance of thorough screening processes to ensure every hire meets the necessary qualifications and standards.
Make the connection
Negligent Hiring Examples
There are two main scenarios when negligent hiring can be alleged. Both stem from inadequate research into the candidate’s history and qualifications.
Hiring Someone With a History of Past Misconduct
We all want to be open-minded and give people second chances, but overlooking past conduct can create a liability for businesses. This is particularly relevant when hiring for roles where the employee would be working with kids, driving as part of their role, or will have access to customers’ property or sensitive information.
An example could be theft. If someone with previous theft convictions steals something of value from a customer or coworker, that could be considered a negligent hire. It will likely be decided that the employer could’ve reasonably foreseen this issue if they’d conducted a criminal background check.
Hiring Someone Without The Right Qualifications
Some job positions require specific qualifications or credentials. For example, a delivery driver will need a valid driver’s license while a nurse will need a valid nursing license. If you hire someone and fail to check that their credentials are valid and active, you may be responsible if something goes wrong.
This one is fairly easy to commit if you’re busy and need to fill a role quickly. Licenses and credentials generally need to be renewed regularly and can lapse or be suspended.
You may find a candidate with confirmed work experience in your field and great references whose license isn’t currently active. Since licensing verifications aren’t always included in basic background checks, employers need to be extra diligent to avoid negligent hiring in licensed fields.
The Impact of Negligent Hiring on Businesses
Negligent hiring can lead to civil cases or investigations from regulatory bodies, potentially resulting in legal costs and fines for businesses. Negligent hiring can lead to several different legal claims such as personal injury claims, worker’s compensation, and more.
Of course, it can also bring harm to your valued employees and customers. We all want to provide a great work environment and deliver exceptional service to clients, so making a negligent hire can harm your team and customer’s trust in your business.
Negligent Hiring Laws
Specific negligent hiring laws vary by state, but these laws generally have common elements:
A duty of care was violated
Negligence cases hinge on whether a duty of care, the duty to act reasonably, was violated. In general, employers satisfy this duty of care by properly vetting candidates.
A third party was harmed
The hire itself will generally not be enough for a negligent hiring claim. There needs to be some injury or harm done to a third party due to negligence.
The issue could’ve reasonably been foreseen
Employers are only responsible for issues they could have reasonably foreseen if they took the proper precautions to screen candidates. If a background check would’ve raised a red flag and allowed them to foresee a potential issue, the employer may be liable for negligent hiring.
Disclaimer: Check your local laws or talk to a lawyer to learn about specific negligent hiring laws governing your business.
How to Avoid Negligent Hiring Claims
The potential threat of negligent hiring claims sounds scary, but the good news is there are steps you can take to avoid them.
- Thorough background checks
- Check references
- Document your efforts
By taking proactive steps like these, employers can reduce their risks of negligent hiring significantly. Below are a few actionable strategies to help you protect your business and make informed hiring decisions.
Conduct Thorough Background Checks
Running pre-employment background checks on new hires is one of the best ways to avoid negligent hiring. Background checks can uncover past conduct issues or whether the candidate misrepresented their qualifications or credentials during the application process.
Consider the job requirements of each role when requesting background checks. Basic background check service packages often focus on checking an applicant’s criminal record, but some roles would benefit from add-ons like driving records or credit checks. Civil records can also uncover past problematic behaviors.
Check References
Reference checks are another great resource for vetting candidates. By asking the right reference check questions, you can learn more about a potential hire’s past conduct, experience, and qualifications.
Document Your Efforts
Documentation can be your best friend when defending against negligent hiring claims. Sometimes hiring managers do everything right, but key information just isn’t available at the time of hire. Having documented efforts to verify the candidate’s suitability for the role will help you prove that you met your professional duty.
Keeping a record of background checks is a good first step. Using an applicant tracking system and inputting dated documentation of reference checks, pre-employment assessments, and any license or education verification will also help you build a good paper trail.
Negligent Hiring vs. Negligent Retention
Negligent hiring occurs during the recruitment and pre-employment background check phase, but negligent retention can occur at any time. Negligent retention occurs when an employer knew or should have known that an employee was unfit for duty or posed a hazard but didn’t take steps to address this issue.
For example, if an employer receives complaints of an employee driving their work vehicle erratically and fails to take action, they may be liable for negligent retention if that employee causes an accident later on while driving for the employer. In contrast, it could be negligent hiring if the employee had a prior recent conviction for reckless driving, was hired in a role requiring driving, and caused an accident on the clock.
Wize Words
Negligent hiring is often not done intentionally and occurs due to an oversight or a rushed hiring process. By slowing down and doing your due diligence before finalizing an employment offer, you can protect your customers, employees, and business from the negative effects of negligent hiring.
Tools like background checks can help you build a safe, positive environment for all of your amazing employees and customers.
Protect your business from negligent hiring
Frequently Asked Questions
Negligent hiring claims are brought on by third parties who’ve been impacted by the negligently hired employee’s actions. Often the plaintiff is another employee or a client of the business. However, it can be any third party as long as the harm or injury incurred is tied to the negligently hired employee’s employment with the business.
The specific background checks needed to avoid a claim of negligent hiring will vary based on the role. For example, a driving record check may be required for a delivery driver but not a cashier. Employers should review each role and decide what individual checks or verifications are needed to thoroughly vet candidates for the role.
Negligent hiring is handled as a civil case, so it can result in financial penalties rather than criminal penalties for the employer. The fines will vary based on factors such as jurisdiction and damages incurred by the plaintiff. These fines can total thousands or even millions of dollars. The business also suffers damage to its reputation.
Negligent hiring can lead to serious consequences, including workplace accidents, financial losses, and legal liabilities. Employers may face lawsuits if an employee’s actions harm others and it’s proven the employer failed to conduct due diligence, like background checks. Beyond legal penalties, negligent hiring can damage a company’s reputation, lower team morale, and increase turnover. Protecting your business with thorough screening processes is essential to avoid these risks.
Negligent hiring occurs when an employer fails to exercise reasonable care during the hiring process, resulting in the selection of an employee who poses a foreseeable risk to others. Legally, this means the employer may be held liable if they didn’t properly vet the candidate through background checks, reference checks, or verifying qualifications, and the employee’s actions cause harm to coworkers, customers, or the public.
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